Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following: (a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule; (b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan; (c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent); (d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices. (e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price); (f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k)); (g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries); (h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance; (i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent); (j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement; (k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice; (l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures; (m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000; (n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder; (o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice; (p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices; (q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice; (r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter; (s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business; (t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business; (u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000; (v) Make any tax election not required by law or settle or compromise any material tax liability; (w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement); (x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998; (y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or (z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) above.
Appears in 3 contracts
Samples: Merger Agreement (Networks Associates Inc/), Merger Agreement (Cybermedia Inc), Merger Agreement (Networks Associates Inc/)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of Pending the Closing. The Company Schedulecovenants and agrees that, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its termsor the Closing, unless the Effective Time, or such time as Parent's designees shall constitute a majority of the Company BoardInvestors otherwise agree in writing, the Company shall, and shall cause each of its subsidiaries shallSignificant Subsidiaries to, except to the extent that Parent shall otherwise consent in writing, carry on (i) conduct its business, in all material respects, business only in the usual, regular ordinary course and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, practice; (ii) keep available the services of use reasonable best efforts to preserve and maintain its present officers assets and employees, properties and (iii) preserve its relationships with its customers, suppliers, advertisers, distributors, licensorsagents, licensees, officers and others employees and other Persons with which it has significant business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stockrelationships; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired use reasonable best efforts to maintain all of the material assets it owns or uses in the ordinary course of business consistent with past practice;
; (liv) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement use reasonable best efforts to preserve the goodwill and ongoing operations of its business; (other than offer letters v) maintain its books and letter agreements entered into records in the usual, regular and ordinary course of business consistent with past practice with employees who are terminable "at will")manner, pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, a basis consistent with past practice; and (vi) comply in all material respects with applicable Laws; provided, however, that during such period the Company and its Significant Subsidiaries shall be permitted to take all actions as set forth in Section 2.06 of the Governance Agreement which would not require the approval of a majority of the directors appointed by the Investors to the Board; provided, however, that the Company shall not issue any shares of Common Stock unless the Investors consent in writing to the offering price for such shares of Common Stock. Except as expressly contemplated by this Agreement or change as set forth on Schedule 4.1, between the date of this Agreement and the Closing, the Company shall not, and shall cause each of its Significant Subsidiaries not to, do any of the following without the prior written consent of the Investors, which consent shall not be unreasonably withheld or delayed:
(a) amend the Company's certificate of incorporation or bylaws or other organizational documents except pursuant to Section 4.2 of this Agreement;
(b) take any action that is reasonably likely to result in (i) any of the representations and warranties set forth in Article II becoming false or inaccurate in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date Closing Date or (ii) any of this Agreement);
(x) Increase the aggregate dollar value conditions to the obligations of inventory owned by distributors the Investors set forth in the first and second tiers of its distribution channel (which has Section 5.2 not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesbeing satisfied; or
(zc) Agree in writing or otherwise agree to take any of the actions described in restricted by this Section 5.1(a) through (y) above4.1.
Appears in 3 contracts
Samples: Investment Agreement (Hexcel Corp /De/), Agreement (Goldman Sachs Group Inc), Investment Agreement (Ciba Specialty Chemicals Holding Inc /Fi/)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 5.01 of the Company ScheduleDisclosure Letter, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, Article VII and the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Boardcovenants and agrees that, unless TCM shall otherwise agree in writing and unless otherwise expressly permitted hereunder, the Company and each of its subsidiaries shallshall use their commercially reasonable efforts to conduct their respective businesses, except to and the extent that Parent Company and its subsidiaries shall otherwise consent in writing, carry on its business, in all material respectsnot take any action except, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted course of business and in compliance in all material respects a manner consistent with all applicable laws past practice; and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and the Company shall use its commercially reasonable efforts consistent with past practices to preserve substantially intact the business organization of the Company and policies its subsidiaries, to (i) preserve intact its present business organization, (ii) keep available the services of the present officers, employees and consultants of the Company and its present officers subsidiaries and employees, to preserve satisfactory relationships of the Company and (iii) preserve its relationships subsidiaries with customers, suppliers, distributors, licensors, licensees, suppliers and others other persons with which it the Company or any of its subsidiaries has significant business dealingsrelations. In additionBy way of amplification and not limitation, except as permitted set forth in Section 5.01 of the Company Disclosure Letter or except as shall be mutually agreed in writing by the terms parties, during the period from the date of this AgreementAgreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article VII and the Effective Time, and except as provided in the Company Scheduleshall not and shall cause its subsidiaries not to, directly or indirectly, do or propose to do any of the following without the prior written consent of Parent, during such period, the Company TCM (which consent shall not do any of the following and shall not permit its subsidiaries to do any of the followingbe unreasonably withheld or delayed), unless otherwise expressly permitted under this Agreement:
(a) Waive amend or otherwise change the Company Articles of Incorporation or Company By-Laws or any of the Company's subsidiaries' equivalent organizational documents;
(b) issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock repurchase rightsof any class, accelerateor any options (including, without limitation, any Options), warrants, convertible or exchangeable securities, or other rights of any kind to acquire any shares of Company Capital Stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any of its subsidiaries or affiliates except (A) pursuant to the terms of Options that are outstanding as of the date of this Agreement, (B) upon conversion of the Company Preferred Stock outstanding as of the date of this Agreement and (C) new Options for the exercise of up to an aggregate of 150,000 shares of Company Common Stock;
(c) sell, lease, license, pledge, dispose of or encumber any assets of the Company or any of its subsidiaries (except (i) dispositions in the ordinary course of business and in a manner consistent with past practice and that, in the aggregate, are not material in amount and (ii) dispositions of obsolete or worthless assets);
(i) amend or change the period (or permit any acceleration, amendment or change) of exercisability of options any Options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or (ii) authorize cash payments in exchange for any options granted under any of such plans Options (except pursuant for Options that are subject to written agreements outstanding, or policies existing, existing on the date hereof and disclosed in that provide for mandatory acceleration of vesting as a result of the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business Merger and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consenthave not been waived);
(di) Declaredeclare, set aside aside, make or pay any dividends on dividend or make any other distributions distribution (whether in cash, stock, equity securities stock or propertyproperty or any combination thereof) in respect of any of its capital stock or 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 of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any shares of its capital stockstock or (iii) amend the terms of, repurchase, redeem or otherwise acquire any of its securities, or propose to do any of the foregoing;
(f) sell, transfer, license, sublicense or otherwise dispose of, or allow any rights to lapse with respect to, any intellectual property other than in the ordinary course of business or amend or modify any existing agreements with respect to any intellectual property, other than in the ordinary course of business, in each case so long as such action does not involve material intellectual property;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; provided (ii) incur any Indebtedness for Borrowed Money or other obligation or liability of any kind (other than accounts payable incurred in the ordinary course of business), or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances to any person, that exceed an aggregate of $5,000,000; (iii) enter into or amend any contract or agreement other than in the ordinary course of business; (iv) authorize or make any capital expenditures or purchase of fixed assets that, quarterly, exceed, $150,000 or, in the aggregate, exceed $250,000; (v) terminate any Material Contract or amend any of its material terms (other than amendments designed to remedy defaults thereunder); or (vi) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 5.01(g);
(h) except as required by applicable Law or the terms of an agreement existing on the date hereof, increase the compensation, bonus or other benefits payable or to become payable to any of the Company's whollyor its subsidiaries' officers, directors or employees, grant any severance or termination pay or rights to, or enter into any employment or severance agreement with, any of the Company's or its subsidiaries' officers, directors or employees, increase any benefits payable under existing severance or termination pay policies or employment agreements or establish, adopt, enter into or, except as required by law, terminate or amend, any Company Plan, except, in each case, for general increases, grants or agreements for non-owned subsidiaries may declareexecutive employees in the ordinary course of business and in a manner consistent with past practice;
(i) take any action, set aside other than in the ordinary course of business and in a manner consistent with past practice as required by changes in GAAP, to change accounting policies, principles, methods or pay dividends or make other distributions practices (including, without limitation, procedures with respect to their capital stock reserves, revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable);
(j) make any Tax election inconsistent with past practice or settle or compromise any Tax liability, in excess of the amount accrued in the most recent financial statements contained in the Company SEC Reports;
(i) commence, pay, discharge, settle or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem practice of liabilities reflected or otherwise acquire, directly or indirectly, any shares of capital stock of reserved against in the most recent financial statements contained in the Company SEC Reports or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves incurred in the ordinary course of business and consistent with past practicespractice or (ii) orwaive any material benefits of any confidentiality, except as required by standstill or similar agreements to which the Company or any of its subsidiaries is a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practicesparty;
(ql) Make permit any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary material increase in the number of the Company and employees employed by the Company or another wholly-owned subsidiary any of its subsidiaries on the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practicedate hereof;
(rm) Authorize terminate or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in fail to renew any calendar quartermaterial Company Permit;
(sn) Materially accelerate enter into any collective bargaining agreement or delay collection of union contract with any notes labor organization or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected union;
(o) except in the ordinary course of business;
(t) Materially delay business and in a manner consistent with past practice, accelerate or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise defer any material tax liability;
(w) Cancel obligation or terminate any material insurance policy naming it as a beneficiary payment by or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesCompany; or
(zp) Agree take or fail to take, or agree in writing or otherwise to take or fail to take, any of the actions described in Section 5.1(a5.01(a) through (yo) above, or that would result in any of the conditions to the Merger set forth in this Agreement not being satisfied.
Appears in 3 contracts
Samples: Merger Agreement (Bull Run Corp), Merger Agreement (Triple Crown Media, Inc.), Merger Agreement (Gray Television Inc)
Conduct of Business by the Company. Except as contemplated by The Company agrees that between the date of this Agreement or and the earlier of the Effective Time and the termination of this Agreement in accordance with Section 8.1, except (1) as set forth in Section 5.1 of the Company ScheduleDisclosure Letter, during the period from the date of (2) as specifically permitted or required by this Agreement and continuing until the earlier of the termination of this Agreement pursuant Agreement, (3) as required by Law or (4) as consented to its termsin writing by Parent (which consent shall not be unreasonably withheld, the Effective Timedelayed or conditioned), or such time as Parent's designees shall constitute a majority of (a) the Company Board, the shall and shall cause each Company and each of Subsidiary to conduct its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance business in all material respects with all applicable laws and regulationsin the ordinary course of business, pay its debts and taxes when due, subject including by using reasonable best efforts to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its and their present business organizationorganizations, (ii) keep available insurance coverage, relationships with Governmental Entities and with customers, suppliers and other Persons with whom it and they have material business relations, and retain the services of its present officers and employees, directors and key employees and (iiib) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by without limiting the terms generality of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such periodforegoing, the Company shall not do any of the following not, and shall not permit its subsidiaries to do any of the followingCompany Subsidiary to:
(ai) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions distribution with respect to its outstanding shares of capital stock (whether in cash, stockassets, equity shares or other securities of the Company or propertyany Company Subsidiary), except dividends and distributions paid or made by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary, distributions under the Company ESPP and distributions resulting from the vesting or exercise of Company Stock Options or the vesting and settlement of Company RSU Award;
(ii) in respect of any capital stock or split, combine combine, reduce or reclassify any of its capital stock stock, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any for, shares of its capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(eiii) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock in each case except as required by the provisions of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements Benefit Plans as in effect on the date hereof or the provisions of this Agreement: (which repurchases A) establish, adopt, amend or terminate any Company Benefit Plan (other than offer letters that contemplate “at will” employment with severance, change in control or retention benefits consistent with current arrangements with similarly situated employees) or amend the Company shall be obligated terms of any outstanding equity-based awards, (B) grant or provide any severance or termination payments or benefits to effectuate if the repurchase price is less than the Offer Price);
(f) Issueany director, deliverofficer, sell, authorize, pledge employee or otherwise encumber any shares of the capital stock other service provider of the Company or any of the Company Subsidiaries, (C) increase the compensation, bonus or pension, welfare, severance or other benefits of or pay any bonus to any director, officer, employee or other service provider of the Company or any of the Company Subsidiaries, (D) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan (including any equity-based awards), (E) forgive any loans to directors, officers or employees of the Company or any of the Company Subsidiaries, or (F) hire or terminate the employment or services of (other than for cause) any officer, employee, independent contractor, or consultant who has target annual compensation (i.e., base salary and target annual bonus opportunity) greater than $200,000; provided, that nothing contained herein shall prohibit the Company from (x) increasing or otherwise modifying or supplementing salaries, wages, benefits or other compensation in the ordinary course of business; (y) granting any rights to equity or equity-related compensation to those individuals or with respect to those positions, and up to the amounts, set forth in Section 5.1(a)(iii) of the Company Disclosure Letter or (z) hiring an employee or entering into a contract for services to be provided by a consultant to replace an employee or consultant of the Company or any of the Company Subsidiaries whose employment or consulting relationship is terminated for any reason on or after the date hereof, so long as the terms of the salary, target annual bonus opportunity and other benefits offered to such replacement employee or consultant are substantially similar, or not materially different than, those of the employee or consultant of the Company or the Company Subsidiary whose employment or consulting relationship has been terminated;
(iv) make any change in financial accounting policies, principles, practices or procedures or any of its subsidiariesmethods of reporting income, deductions or other material items for financial accounting purposes, except as required by GAAP, applicable Law or SEC policy;
(v) acquire, including by merger, consolidation or acquisition of stock or assets or any other business combination or by any other manner, any corporation, partnership, other business organization or any business, division or equity interest thereof;
(vi) amend or propose to amend the Company Governing Documents or any of the equivalent organizational documents of any Company Subsidiary;
(vii) issue, deliver, grant, sell, pledge, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares in its capital stock, voting securities or other equity interest in the Company or any Company Subsidiary or any securities convertible into shares of or exchangeable for any such capital stockshares, voting securities or equity interest, or subscriptions, any rights, warrants or options to acquire any such shares of such capital stock or any securities convertible into shares of in its capital stock, voting securities or enter into other agreements equity interest or commitments any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable any otherwise unexercisable Company Equity Award under any existing Company Equity Plan (except as otherwise required by the express terms of any character obligating it to issue any such shares or convertible securitiesCompany Equity Award outstanding on the date hereof), other than (i) the issuance, delivery and/or sale issuances of shares of Company Common Stock pursuant to in respect of the Company ESPP or any exercise of Company Stock Options therefor or the vesting or settlement of Company Equity Awards outstanding as of on the date of this Agreement, hereof and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k))their respective present terms;
(gviii) Causedirectly or indirectly, permit purchase, redeem or propose otherwise acquire any amendments shares in its capital or any rights, warrants or options to acquire any such shares in its Certificate capital, except for (A) acquisitions of Incorporationshares of Company Common Stock tendered by holders of Company Equity Awards in order to satisfy obligations to pay the exercise price and/or Tax withholding obligations with respect thereto and (B) the acquisition by the Company of Company Equity Awards in connection with the forfeiture of such awards;
(ix) redeem, Bylaws repurchase, prepay, defease, incur, assume, endorse, guarantee or otherwise become liable for or modify in any material respect the terms of any Indebtedness for borrowed money or issue or sell any debt securities or calls, options, warrants or other charter documents rights to acquire any debt securities (directly, contingently or similar governing instruments otherwise), except for transactions at the stated maturity of such Indebtedness and required amortization or mandatory prepayments;
(x) make any loans to any other Person, except for loans among the Company and its wholly owned Company Subsidiaries or among the Company’s wholly owned Company Subsidiaries;
(xi) (A) sell, lease, license, transfer, exchange, swap or otherwise dispose of, or subject to any Lien (other than Company Permitted Liens), any of its subsidiariesmaterial properties or assets (including shares of capital stock or other equity interests of the Company or any of the Company Subsidiaries), except for sales of inventory, or dispositions of obsolete or worthless equipment, in each case, in the ordinary course of business or (B) waive or assign any claims or rights of material value;
(hxii) Acquire (A) compromise or agree settle any claim, litigation, investigation or proceeding, in each case made or pending by or against the Company or any of the Company Subsidiaries (for the avoidance of doubt, including any compromise or settlement with respect to acquire by merging or consolidating withmatters in which any of them is a plaintiff), or by purchasing any equity interest of their employees, officers or directors in their capacities as such, other than the compromise or a material portion settlement of the assets ofclaims, litigation, investigations or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)proceedings that: (1) or ((r)), otherwise acquire or agree are for an amount not to acquire any assets which are materialexceed $500,000, individually or in the aggregate, to the business (2) do not involve an admission of guilt or impose any injunctive relief or a material restriction on the Company and the Company Subsidiaries and (3) do not provide for the license of any material Intellectual Property Right or enter into (B) commence any joint venturematerial claim, strategic partnership litigation, investigation or allianceproceeding, other than in the ordinary course of business;
(ixiii) Sellmake, leaserevoke or change any material Tax election, licensechange any Tax accounting period or method for purposes of a material Tax or material method of Tax accounting, encumber file any material amended Tax Return, settle or otherwise dispose compromise any audit or proceeding relating to a material amount of any properties or assets which are material, individually or in the aggregate, to the business of the CompanyTaxes, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent agree to an extension or waiver of the statute of limitations with past practice (it being agreed that Parent shall not unreasonably withhold consent respect to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days a material amount of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securitiesTaxes, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having “closing agreement” within the economic effect meaning of any Section 7121 of the foregoing other than Code (ior any similar provision of state, local, or non-U.S. Law) with respect to any material Tax, or surrender any right to claim a material Tax refund;
(xiv) except for $100,000 in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities capital expenditures incurred in the ordinary course of business, make any new capital expenditure or (iii) as contemplated by this Agreementexpenditures, or commit to do so;
(kxv) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent or in connection with past practice;
any transaction to the extent specifically permitted by any other subclause of this Section 5.1(b), (lA) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements Contract that would, if entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration prior to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parenthereof, be a Material Contract, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnificationB) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, materially modify, materially amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party Material Contract or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(zxvi) Agree agree, in writing or otherwise otherwise, to take any of the actions described in Section 5.1(a) through (y) aboveforegoing actions.
Appears in 3 contracts
Samples: Agreement and Plan of Merger (Allergan PLC), Merger Agreement (Kythera Biopharmaceuticals Inc), Merger Agreement (Allergan PLC)
Conduct of Business by the Company. Except as set forth in Section 7.01(a) of the Company Disclosure Letter or as expressly contemplated by this Agreement or as set forth in Section 5.1 required by applicable Law or with the prior written consent of the Company ScheduleParent (such consent not to be unreasonably withheld, during the period conditioned or delayed), from the date of this Agreement and continuing until to the earlier of Exchange Effective Time, or, if earlier, the termination of this Agreement pursuant to in accordance with its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent and shall otherwise consent in writingcause each Company Subsidiary to, carry on (i) conduct its business, in all material respects, business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance course in all material respects consistent with all applicable laws past practice and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and (ii) use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organizationorganization and advantageous business relationships, (ii) keep including by maintaining its relations and goodwill with all material suppliers, material customers, material licensors, material licensees, material distributors and Governmental Entities, maintaining its credit ratings and keeping available the services of its present current officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, and without limiting the generality of the foregoing, except as permitted by the terms set forth in Section 7.01(a) of this Agreement, and except as provided in the Company Schedule, without Disclosure Letter or as expressly contemplated by this Agreement or required by applicable Law or with the prior written consent of ParentParent (such consent not to be unreasonably withheld, during such periodconditioned or delayed), from the date of this Agreement to the Exchange Effective Time, or, if earlier, the termination of this Agreement in accordance with its terms, the Company shall not do any of the following not, and shall not permit its subsidiaries to any Company Subsidiary to, do any of the following:
(ai) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(bA) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declaredeclare, set aside or pay any dividends on on, or make any other distributions (whether in cash, stock, equity securities stock or propertyproperty or any combination thereof) in respect of, any of its capital stock, other equity interests or voting securities, other than (1) regular quarterly cash dividends of no more than $0.2014 per share of Company Common Stock payable by the Company in respect of shares of Company Common Stock with declaration, record and payment dates consistent with past practice and in accordance with the Company’s current dividend policy, (2) dividends and distributions by any Company Subsidiary to its applicable parent, and (3) the issuance of Company Common Stock in settlement of Company RSUs granted pursuant to the Company Stock Plan, (B) split, combine, subdivide or reclassify any of its capital stock, other equity interests or voting securities, or securities convertible into or exchangeable or exercisable for capital stock or splitother equity interests or voting securities or issue, combine or reclassify any capital stock or issue propose or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any its capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside other equity interests or pay dividends voting securities or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(eC) Purchaserepurchase, redeem or otherwise acquire, directly or indirectlyoffer to repurchase, redeem or otherwise acquire, from any third party, any shares of capital stock of the Company or its subsidiariesvoting securities of, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employeeor equity interests in, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiariesCompany Subsidiary or any securities thereof convertible into or exchangeable or exercisable for capital stock or voting securities of, or equity interests in, the Company or any Company Subsidiary, or any securities convertible into shares of warrants, calls, options or other rights to acquire any such capital stock, securities or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securitiesinterests, other than (ix) the issuance, delivery and/or sale withholding of shares of Company Common Stock to satisfy Tax obligations with respect to Company RSUs granted pursuant to the exercise Company Stock Plan and (y) the acquisition by the Company of Options therefor outstanding as a Company RSU granted pursuant to the Company Stock Plan in connection with the forfeiture of the date of this Agreement, and such Company RSU;
(ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are materialassets, property or securities if, individually or in the aggregate, such acquisition or acquisitions would reasonably be expected to prevent, materially delay or materially impede the business consummation of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice Transactions (it being understood and agreed that Parent a ROFO Asset (as defined in the Relationship Agreement) shall not unreasonably withhold consent be deemed to any non-exclusive license agreement related be such an asset, property or security for purposes of this Section 7.01(a)(ii), and no acquisition by or offer to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days Company of any request for consent ROFO Assets shall constitute such consentbe permitted or required notwithstanding anything in the Relationship Agreement to the contrary);
(jiii) Incur(A) amend the Company Charter, assume the Company Bylaws, the New York Company Charter or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, New York Company Bylaws or (iiiB) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies the charter or procedures;
(m) Make any payments outside organizational documents of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesSubsidiary; or
(ziv) Agree in writing authorize any of, or otherwise commit, resolve or agree to take any of of, the actions described in Section 5.1(a) through (y) aboveforegoing actions.
Appears in 3 contracts
Samples: Agreement and Plan of Reorganization (Brookfield Renewable Partners L.P.), Agreement and Plan of Reorganization (TerraForm Power, Inc.), Agreement and Plan of Reorganization (TerraForm Power, Inc.)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the The Company Schedulecovenants and agrees that, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, or the Effective Time, or such time unless Parent and Merger Sub shall otherwise agree in writing, and except as Parent's designees set forth in Schedule 7.2, the Company shall constitute conduct its business and 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 majority manner consistent with past practice; and the Company shall use reasonable commercial efforts to preserve substantially intact the business organization of the Company Boardand its subsidiaries, to keep available the services of the present officers, employees and consultants of the Company and each its subsidiaries and to preserve the present relationships of the Company and its subsidiaries with customers, suppliers and other persons with which the Company or any of its subsidiaries has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement (including Schedule 7.2), neither the Company nor any of its subsidiaries shall, except to during the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in period from the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms date of this AgreementAgreement and continuing until the earlier of the termination of this Agreement or the Effective Time, and except as provided in directly or indirectly do, or propose to do, any of the Company Schedule, following without the prior written consent of Parent, during such periodwhich, in the Company shall case of clauses (c), (d)(iv), (e)(iv), (f), (h), (i) or (j) will not do any of the following and shall not permit its subsidiaries to do any of the followingbe unreasonably withheld or delayed:
(a) Waive any stock repurchase rights, accelerate, amend or otherwise change the period of exercisability of options Company Charter Documents or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company ScheduleSubsidiary Documents;
(b) Grant issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any severance shares of capital stock of any class, or termination pay any options, warrants, convertible securities or other rights of any kind to acquire any officer shares of capital stock, or employee any other ownership interest (including, without limitation, any phantom interest) in the Company, any of its subsidiaries or affiliates (except for the issuance of shares of Common Stock pursuant to written agreements outstanding, or policies existing, the exercise of Options and Warrants outstanding on the date hereof and disclosed in the Company Schedule, or adopt any new severance planaccordance with their terms on such date);
(c) Transfer sell, pledge, dispose of or license to encumber any person or entity or otherwise extend, amend or modify in any material respect any rights to assets of the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted any of its subsidiaries (except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practice practice, (it being agreed that Parent shall ii) dispositions of obsolete or worthless assets, and (iii) sales of immaterial assets not unreasonably withhold consent to any non-exclusive license agreement related to in excess of $1 million in the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consentaggregate);
(d) DeclareExcept as set forth in Schedule 7.2, (i) declare, set aside aside, make or pay any dividends on dividend or make any other distributions distribution (whether in cash, stock, equity securities stock or propertyproperty or any combination thereof) in respect of any of its capital stock or stock, except that a wholly-owned subsidiary of the Company) may declare and pay a dividend to its parent that is not a cross-border dividend, (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for any shares of its capital stock, (iii) except (A) as required by the terms of any security or agreement as in effect on the date hereof and set forth in Schedule 7.2 and (B) to the extent necessary to effect withholding to meet minimum tax withholding obligations in connection with the exercise of any Option, 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 Common Stock, or any option, warrant or right, directly or indirectly, to acquire any such securities, or propose to do any of the foregoing, (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 stockholder equity interest in the Company, or (v) make any cross-border capital contributions to a subsidiary;
(i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; provided that (ii) incur any indebtedness for borrowed money, except for, after providing Parent and Merger Sub with prior notice of any such borrowing or reborrowing, borrowings and reborrowings under the Company's or any of its subsidiaries' existing committed or uncommitted credit facilities listed in the Company SEC Documents or on Schedule 7.2 in an amount not to exceed the maximum amount available under such credit facilities on the date hereof; (iii) issue any debt securities or assume, guarantee (other than guarantees of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock entered into in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, except as required by any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements agreement in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(fand identified in Schedule 7.2) Issueor endorse, deliver, sell, authorize, pledge or otherwise encumber as an accommodation become responsible for, the obligations of any shares of the capital stock of the Company or any of its subsidiariesperson, or make any securities convertible into shares of such capital stock, loans or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof oradvances, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall but not unreasonably withhold consent loans or advances to employees of the Company to fund the exercise price of Options or otherwise to purchase shares of the Common Stock); (iv) authorize any noncapital expenditures or purchases of fixed assets which are, in the aggregate, in excess of $5 million over the next 12-exclusive license agreement related month period; or (v) enter into or materially amend any contract, agreement, commitment or arrangement to effect any of the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consentmatters prohibited by this SECTION 7.2(E);
(jf) Incurexcept as set forth in Schedule 7.2, assume as required by law or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or as provided in an existing obligation of another personthe Company, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries compensation or wage rates severance payable or fringe benefits (including rights to severance or indemnification) of any of become payable to its directors, officers, employees or consultants other than normal periodic salary consultants, except for increases in salary, wages or bonuses of employees of the Company or its subsidiaries, including in connection with promotions, in accordance with past practices; (ii) grant any severance or termination pay (except to make payments required to be made under obligations existing on the date hereof in accordance with the terms of such obligations or in accordance with past practice) to, or enter into or amend any employment or severance agreement with, any current or prospective employee of the Company or any of its subsidiaries, except for non-officer new hire employees made and promotions in the ordinary course of businessbusiness whose annual salary does not exceed $100,000 and whose severance benefits do not exceed one times annual salary; or (iii) establish, consistent adopt, enter into or amend any collective bargaining agreement, Company Employee Plan, including, without limitation, any plan that provides for the payment of bonuses or incentive compensation, trust, fund, policy or arrangement for the benefit of any current or former directors, officers, employees or consultants or any of their beneficiaries, except, in each case, as may be required by law or existing agreement 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; PROVIDED, HOWEVER, that, prior to, and effective upon, the Closing of the Sales Transaction, the Company may amend the severance provisions of the employment agreements of the individuals whose names appear on Schedule 7.2(f), in accordance with past practice, or change the terms and conditions set forth in any material respect any management policies or proceduressuch Schedule;
(mg) Make take any action to change accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments outside of accounts payable and collection of accounts receivable), except as required by a change in GAAP occurring after the ordinary course of business date hereof;
(h) make any Tax election or settle or compromise any United States federal, state, local or non-U.S. Tax liability;
(i) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) in an aggregate excess of $250,000;
(n) Except 1 million in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Companyaggregate, other than agreementsthe payment, extensions discharge or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves satisfaction in the ordinary course of business and consistent with past practices) or, except as required by a change practice of liabilities reflected or reserved against in law or the financial statements contained in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company SEC Documents or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected incurred in the ordinary course of businessbusiness and consistent with past practice or incurred in connection with this Agreement and the transactions contemplated hereby;
(tj) Materially delay enter into, modify, terminate, allow to expire or accelerate payment renew any contract, agreement or arrangement, whether or not in writing, for the licensing of any account payable beyond Company Intellectual Property Assets or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesThird Party Intellectual Property Assets; or
(zk) Agree take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(aSECTIONS 7.2(A) through THROUGH (yJ) above, or any action which would reasonably be expected to make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder. Additionally, the Company shall use its commercially reasonable efforts to obtain any and all written consents of customers which, pursuant to the terms of any contracts, agreements or arrangements with such customers, are required to prevent the termination of such contracts, agreements or arrangements in connection with, or as a result of, the transactions contemplated by this Agreement, except if and insofar as the failure to obtain such consents would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
Appears in 3 contracts
Samples: Stock Purchase Agreement (Paragon Trade Brands Inc), Stock Purchase Agreement (Paragon Trade Brands Inc), Stock Purchase Agreement (Ontario Teachers Pension Plan Board)
Conduct of Business by the Company. Except (a) During the period from the date of this Agreement to the Effective Time, except as set forth in Section 4.01(a) of the Company Disclosure Schedule or as expressly contemplated by this Agreement or as set forth consented to in Section 5.1 writing in advance by Parent (which consent shall not unreasonably be withheld or delayed), the Company shall, and shall cause each of its Subsidiaries to, carry on its business in all material respects in the ordinary course consistent with past practice prior to the Effective Time and, to the extent consistent therewith, use all commercially reasonable efforts to preserve intact its current business organizations, keep available the services of its current officers, key employees and consultants and preserve its relationships with customers, suppliers, licensors, licensees, distributors and others having business dealings with it. In addition to and without limiting the generality of the Company Scheduleforegoing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time except as Parent's designees shall constitute a majority otherwise set forth in Section 4.01(a) of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner Disclosure Schedule or as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted expressly contemplated by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following not, and shall not permit its subsidiaries to do any of the followingits Subsidiaries to, without Parent’s prior written consent:
(ai) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(bA) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declaredeclare, set aside or pay any dividends on on, or make any other distributions (whether in cash, stock, equity securities stock or property) in respect of, any of any its capital stock stock, other than (1) the $0.11 cash dividend declared by the Board of Directors of the Company on June 22, 2006 and payable on August 4, 2006 to record holders of Company Common Stock on July 28, 2006 (it being understood that no further dividends or distributions shall be declared or paid by the Company to its stockholders while this Agreement is in effect), (2) dividends and distributions in accordance with the terms of the Rights Agreement and (3) dividends or distributions by a direct or indirect Subsidiary wholly owned by the Company to the Company or another directly or indirectly wholly owned Subsidiary of the Company, (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 any capital stock; provided that any shares of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their its capital stock in the ordinary course of business and consistent with past practices.
or (eC) Purchasepurchase, redeem or otherwise acquire, directly or indirectly, acquire any shares of its capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, other securities thereof or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any such shares or other securities, except for purchases, redemptions or other acquisitions of capital stock or other securities (1) required by the terms of the Company Stock Plans in effect as of the date hereof or (2) required by the terms of any plans, arrangements or Contracts existing on the date hereof between the Company or any of its Subsidiaries and any director or employee of the Company or any of its Subsidiaries (to the extent complete and accurate copies of which have been heretofore delivered to Parent);
(ii) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien any shares of such its capital stock stock, any other voting securities or any securities convertible into shares of capital stockinto, or enter into other agreements any rights, warrants or commitments of any character obligating it options to issue acquire, any such shares shares, voting securities or convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, including pursuant to Contracts as in effect on the date hereof (other than (iA) the issuance, delivery and/or sale issuance of shares of Company Common Stock upon the exercise of Company Stock Options or in connection with Company Stock Based Awards, in each case in accordance with their terms on the date hereof; (B) the issuance of Company Rights and shares of the Company’s capital stock pursuant to the exercise Company Rights or the Rights Agreement; or (C) grants required by the terms of Options therefor outstanding as any plans, arrangements or Contracts existing on the date hereof between the Company or any of its Subsidiaries and any director or employee of the date Company or any of this Agreement, its Subsidiaries (to the extent complete and (ii) the grant accurate copies of employee stock options, consistent with the Company's established past practice for similarly situated employees, which have been heretofore delivered to non-officer employees who are hired in accordance with Section 5.1((kParent));
(giii) Cause, permit amend (A) the Company Certificate or propose any amendments to its Certificate of Incorporation, Bylaws the Company By-Laws or other comparable charter or organizational documents (or similar governing instruments of any of its subsidiaries)the Company’s Subsidiaries or (B) the Notes, in each case except as may be required by applicable Law or the rules and regulations of the SEC or the NYSE;
(hiv) Acquire directly or agree to indirectly acquire (A) by merging or consolidating with, or by purchasing any equity interest in or a material substantial portion of the assets of, by making an investment in or capital contribution to, or by any other manner, any person or division, business or equity interest of any corporationperson or (B) other than in the ordinary course of business, partnership, association any material asset or other business organization or division thereof orassets, except as permitted by Section 5.1((m)) or ((r))for capital expenditures, otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, shall be subject to the business limitations of the Company or enter into any joint venture, strategic partnership or allianceSection 4.01(a)(vii) below;
(iv) Sell(A) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or subject to any Lien or otherwise dispose of any of its material properties or other material assets which are material, individually or in the aggregate, to the business of the Companyany interests therein (including securitizations), except for sales of inventory and used equipment, or the license of the Company's products equipment in the ordinary course of business consistent with past practice practice, or (it being agreed that Parent shall not unreasonably withhold consent to B) enter into, modify or amend in a material respect any non-exclusive license agreement related to lease of material property, other than in the Company's enterprise ordinary course of business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)consistent with past practice;
(jvi) Incur, assume or pre-pay (A) incur any indebtedness for borrowed money, money or guarantee any such indebtedness or obligation of another person, issue or sell any debt securities or calls, options, warrants, calls warrants or other rights to acquire any debt securitiessecurities of the Company or any of its Subsidiaries, guarantee any debt securities of another person, enter into any "“keep well" ” or other agreement Contract to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing (other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former nonshort-officer employees, hired term borrowings in the ordinary course of business consistent under the Company’s Credit Agreement dated December 4, 2003 with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course a syndicate of business consistent with past practice with employees who are terminable "at will"banks led by XX Xxxxxx Xxxxx Bank as Administrative Agent), except that the Company and its Subsidiaries may incur, assume or pre-pay indebtedness for borrowed money under existing credit agreements and lines of credit described in Section 4.01 of the Company Disclosure Schedule; or (B) make any special bonus loans or special remuneration advances to any directorother person, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary Subsidiary of the Company and the Company or another wholly-owned subsidiary Subsidiary of the Company, which would result in the aggregate principal amount of all of the outstanding foregoing loans and advances of the Company and advances its Subsidiaries not exceeding $100,000;
(vii) make any new capital expenditure or expenditures exceeding the amounts set forth in Section 4.01(a)(vii) of business related expenses the Company Disclosure Schedule;
(including expenses related viii) except as required by Law or any judgment by a court of competent jurisdiction, (A) pay, discharge, settle or satisfy any material claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise) where the uninsured amount to business travel) to employees be paid is greater than $250,000, other than the payment, discharge, settlement or satisfaction in the ordinary course and consistent of business or in accordance with past practice;
(r) Authorize their terms, of liabilities disclosed, reflected or make capital expenditures beyond those provided reserved against in the Company's existing capital expenditure budget, most recent audited financial statements (or that are individually the notes thereto) of the Company included in the Filed Company SEC Documents (for amounts not in excess of $100,000 such reserves) or in incurred since the aggregate in excess date of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected such financial statements in the ordinary course of business;
, (tB) Materially delay or accelerate payment of cancel any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount material indebtedness in excess of $500,000100,000, (C) waive or assign any claims or rights of material value, or (D) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, knowingly fail to enforce, or consent to any material matter with respect to which consent is required under any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(vix) Make enter into any tax election not required by law or settle or compromise any material tax liabilityContract that would be of a type referred to in Section 3.01(j)(ii);
(wx) Cancel enter into, modify, amend or terminate any Contract or waive, release or assign or delegate any material insurance policy naming it as rights or claims thereunder, which if so entered into, modified, amended, terminated, waived, released, assigned or delegated would reasonably be expected to (A) have a beneficiary or a loss payable payee or permit Material Adverse Effect, (B) impair in any such policy to lapse (it being understood that material respect the ability of the Company may renew to (or to cause its Subsidiaries to) perform its obligations under this Agreement or (C) prevent or materially impede, interfere with, hinder or delay the consummation of the transactions contemplated by this Agreement;
(xi) enter into any insurance policy material Contract to the extent consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement could reasonably be expected to conflict with, or result in a violation or breach of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to the loss of a benefit under, or result in the creation of any Lien in or upon any of the properties or other assets of the Company or any of its Subsidiaries under, or require Parent or any of its Affiliates to transfer any of its material assets under, or give rise to any increased, additional, accelerated, or guaranteed right or entitlements of any third party under, or result in any material alteration of, any provision of such Contract;
(xii) except as required to ensure that any Benefit Plan or Company Benefit Agreement (in each case, as in effect as of the date hereof and to the extent true, complete and accurate copies of which have been heretofore delivered to Parent as of the date of this Agreement) is not then out of compliance with applicable Law or to comply with any Benefit Plan, Company Benefit Agreement or other Contract entered into prior to the date hereof (in each case, as in effect as of the date hereof and to the extent true, complete and accurate copies of which have been heretofore delivered to Parent as of the date of this Agreement), (A) adopt, enter into, terminate or amend (1) any collective bargaining Contract or Benefit Plan or (2) any Company Benefit Agreement or other Contract, plan or policy involving the Company or any of its Subsidiaries and Key Personnel, (B) increase in any manner the compensation, bonus or fringe or other benefits of, or pay any discretionary bonus of any kind or amount whatsoever to, any current or former director, officer, employee or consultant, except in the ordinary course of business consistent with past practice to employees of the Company or its Subsidiaries other than Key Personnel, (C) grant or pay any severance or termination pay, except for severance or termination pay granted or paid in the ordinary course of business consistent with past practice, to, or increase in any material manner the severance or termination pay of, any current or former director, officer, employee or consultant of the Company or any of its Subsidiaries other than Key Personnel, (D) remove any existing restrictions in any Company Benefit Agreements, Benefit Plans or awards made thereunder, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or Company Benefit Agreement, (F) take any action to accelerate the vesting or payment of any compensation or benefit under any Benefit Plan or Company Benefit Agreement or awards made thereunder or (G) except as may be reasonably necessary to comply with GAAP, change any actuarial or other assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(xxiii) Increase except as required by GAAP, revalue any material assets of the aggregate dollar value of inventory owned by distributors in the first and second tiers Company or any of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30Subsidiaries or make any material change in financial accounting methods, 1998principles or practices;
(yxiv) Begin shipment of except as required by Law, (i) make or change any new products tax election, (ii) settle any tax audit or (iii) file any amended tax return, in each case, that is reasonably likely to customersresult in an increase to a tax liability, except for alpha versions which increase is material to the Company and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesits Subsidiaries, taken as a whole; or
(zxv) Agree in writing authorize any of, or otherwise commit, resolve, propose or agree to take any of of, the actions described in Section 5.1(a) through (y) aboveforegoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Valassis Communications Inc), Merger Agreement (Advo Inc)
Conduct of Business by the Company. Except as contemplated by During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or as set forth in Section 5.1 the Effective Time, each of the Company Scheduleand its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld), carry on its business in the usual, regular and ordinary course of business, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable Legal Requirements, pay its debts and Taxes in the ordinary course of business consistent with past practice, subject to good faith disputes over such debts or Taxes, and pay or perform other material obligations in the ordinary course of business consistent with past practice, and use its commercially reasonable efforts consistent with past practice to (i) preserve intact its present business organization and (ii) continue to manage in the ordinary course of business its business relationships with third parties. In addition, except as permitted by the terms of this Agreement, without the prior written consent of Parent (which consent shall not be unreasonably withheld), during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, terms or the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or repurchase of restricted stock, or reprice options granted under to any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under or take any of such plans except pursuant action with regard to written agreements outstanding, any warrant or policies existing, on the date hereof and disclosed in the Company Scheduleother right to acquire capital stock;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously made available or disclosed in the Company Schedulewriting to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rightsProperty Rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)business;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiariesstock, except repurchases of unvested shares at cost in connection with the termination of the employment or service relationship with any employee, director employee or consultant service provider pursuant to stock option agreements or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of Company Options therefor outstanding and Company Warrants, or (ii) granting to employees or other service providers (other than directors or officers of the Company) Company Options to acquire no more than the number of shares set forth in Part 4.1(f) of the Company Disclosure Schedule under the Company Option Plans that are existing as of the date hereof in the ordinary course of business consistent with past practice in connection with periodic compensation reviews, ordinary course promotions or to new hires; provided that no Company Options permitted to be granted under this Agreement, and clause (ii) may provide for any acceleration of any benefit, directly or indirectly, as a result of the grant transactions contemplated by this Agreement or any termination of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k))employment or service thereafter;
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws the Company Charter Documents or other to the charter documents (or similar governing instruments of any subsidiary of its subsidiaries)the Company;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other association, business organization or other person or division thereof or, except as permitted by Section 5.1((m)) thereof; or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any material joint ventureventures, strategic partnership relationships or alliancealliances or make any material loan or advance to, or investment in, any person, except for loans or capital contributions to a subsidiary or advances of routine business or travel expenses to employees, officers or directors in the ordinary course of business consistent with past practice;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay Incur any indebtedness for borrowed money, money or guarantee any such indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securitiessecurities of the Company, enter into any "“keep well" ” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, in the ordinary course of business or (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employeeAdopt or, except replacements for former non-officer employeesas required by applicable Legal Requirements, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase Company Employee Plan, Employee Agreement or employee stock option plan, or adopt or amend any material other employee benefit plan or equity plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "“at will"”), pay any special bonus or special remuneration to any director, employee director or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentemployee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practiceconsultants, or change in any material respect any management policies or procedures, other than salary increases for employees (other than officers and directors) in the ordinary course of business consistent with past practice;
(l) Make any capital expenditures in excess of $250,000 in the aggregate;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modifyModify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party Contract or waive, release or assign any material rights or claims thereunder, except in the ordinary course of business consistent with past practice;
(n) Enter into, modify, amend or cancel any material development services, licensing, distribution, purchase, sales, sales representation or other similar agreement or obligation with respect to any material Company Intellectual Property Rights or enter into any contract of a character required to be disclosed by Section 2.16 (except for contracts of a character required to be disclosed by subsections (g) and (l) of Section 2.16 and, to the extent addressed by (g) or (l), subsection (o) of Section 2.16, and entered into in the ordinary course of business);
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets or, except as required by GAAP, make any change in tax or accounting methods, principles or practices;
(p) Discharge, settle or satisfy any disputed claim, litigation, arbitration, disputed liability or other controversy (absolute, accrued, asserted or unasserted, contingent or otherwise), including any liability for Taxes, other than the booking of reserves discharge or satisfaction in the ordinary course of business and consistent with past practices) orpractice, except as required by a change in law or in GAAP accordance with their terms, of liabilities reflected or reserved against in the rules Company Balance Sheet or incurred since March 31, 2007 in the ordinary course of business consistent with past practice, or waive any material benefits of, or agree to modify in any material respect, any confidentiality, standstill or similar agreements to which the SECCompany or any of its subsidiaries is a party; provided, make however, that the discharge or settlement of any change disputed claim, liability or other controversy in accounting methods, principles or practices, including inventory accounting practicesthe amount of less than $250,000 shall not be deemed to be prohibited by the foregoing;
(q) Make Take any loansaction that is intended or would reasonably be expected to prevent or materially impede the consummation of any of the transactions contemplated by this Agreement, advances including with respect to any “poison pill” or capital contributions tosimilar plan, agreement or investments inarrangement, any other person anti-takeover measure, or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practiceTakeover Statute;
(r) Authorize Take any action that is intended or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 would reasonably be expected to result in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors conditions set forth in the first and second tiers of its distribution channel (which has Article 6 not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesbeing satisfied; or
(zs) Agree in writing or otherwise to take any of the actions described in Section 5.1(a4.1(a) through (y4.1(r) above.
Appears in 2 contracts
Samples: Agreement and Plan of Reorganization (Inverness Medical Innovations Inc), Agreement and Plan of Reorganization (Hemosense Inc)
Conduct of Business by the Company. (a) Except as expressly contemplated or permitted by this Agreement or consented to in writing by Parent during the period from the date of this Agreement to the earlier of the termination of this Agreement or the Partnership Merger Effective Time, the Company (i) shall, and shall cause each of the Company Operating Partnership and each of the Student Housing Subsidiaries to, carry on its businesses in the usual, regular and ordinary course consistent with past practice and, to the extent consistent with the foregoing, use its commercially reasonable efforts to preserve intact their respective current business organizations, ongoing businesses and relationships with customers, suppliers, lessors and others having business dealings with it and to keep available the services of their present officers and employees, (ii) shall continue to completion the special capital projects described in Section 6.01 of the Company Disclosure Schedule in accordance with the description set forth therein and Section 6.01(b)(v), (iii) shall maintain the status of the Company as a REIT and the status of the Company Operating Partnership as a partnership (and not an association or publicly traded partnership) within the meaning of the Code, (iv) shall use commercially reasonable efforts to, and shall cause the Company Operating Partnership and each of the Student Housing Subsidiaries to use commercially reasonable efforts to comply with, all applicable Laws wherever their respective businesses are conducted, including the timely filing of reports, forms or other documents with the SEC required pursuant to the Securities Act or the Exchange Act and (v) shall not knowingly take any other action that would reasonably be anticipated to prevent or delay the consummation of the Mergers or the Contemplated Transactions.
(b) Without limiting the foregoing, except as set forth in Section 5.1 6.01 of the Company ScheduleDisclosure Schedule or with respect to any actions contemplated by, or necessary under, Exhibit G and/or Exhibit I, expressly contemplated or permitted by this Agreement, or consented to in writing by Parent, during the period from the date of this Agreement and continuing until to the earlier of the termination of this Agreement pursuant to its terms, or the Partnership Merger Effective Time, or such time as Parent's designees the Company Parties shall constitute a majority not and shall cause the other Subsidiaries of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to not to:
(i) preserve intact (A) declare, set aside for payment or pay any dividends on, or make any other distributions (whether in cash, shares or property) in respect of, any of the Company’s equity securities or the partnership interests, shares, stock or other equity interests in any Subsidiary of the Company, other than (i) regular, cash distributions at a rate not in excess of $0.165 per share of Company Common Shares, declared and paid quarterly in accordance with the historic practice of the Company, provided that the Company shall not declare, set aside or pay its present business organizationregular, cash distribution in respect of any fiscal quarter after the first fiscal quarter of 2008, it being agreed that the Company may pay in the second fiscal quarter of 2008 the cash distribution in respect of the first fiscal quarter of 2008, (ii) keep available the services corresponding distributions payable to each holder of its present officers LP Units and employeesGP Units, and (iii) preserve its relationships with customersthe CPM TRS Distribution, suppliers(v) a distribution to the holders of LP Units and GP Units of the entire amount of the net proceeds (including the interest, distributorsif any, licensorsearned thereon) resulting from the Interest Sale, licenseesthe Asset Sales, if any (as set forth on Exhibit G), and others with which it has business dealings. In additiona corresponding distribution to the holders of Company Common Shares (the amount per Company Common Share and per LP Unit of such distributions, except as permitted the “Distribution Amount”) and (iv) dividends or distributions, declared, set aside or paid by any wholly owned Subsidiary of the Company to the Company or any of its Subsidiaries that is, directly or indirectly, wholly owned by the terms Company and provided, that the Company may make dividend payments it is required to make by the Code required to maintain REIT status and those that are sufficient to eliminate any U.S. federal income tax liability otherwise payable, (B) split, combine or reclassify any shares, stock, partnership interests or other equity interests or issue or authorize the issuance of this any securities in substitution for such shares, stock, partnership interests or other equity interests or (C) purchase, redeem (except for the redemption of LP Units for Company Common Shares in accordance with the Company Operating Partnership Agreement) or otherwise acquire any Company Common Shares, stock, other equity interests or securities of the Company or the partnership interests, stock, other equity interests or securities of any Subsidiary of the Company or any options, warrants or rights to acquire, or security convertible into, Company Common Shares, stock, other equity interest or securities of the Company or the partnership interests, stock or other equity interests in any Subsidiary of the Company;
(ii) other than issuances in respect of the redemption of LP Units for Company Common Shares in accordance with the Company Operating Partnership Agreement, and authorize for issuance, issue, deliver, sell, grant or agree to issue, deliver, sell or grant, any Company Common Shares, shares of stock, units, interests, any other voting or redeemable or convertible securities (including LP Units or other partnership interests), options, warrants or stock based performance units of the Company or its Subsidiaries, or pledge or otherwise encumber shares of capital stock or securities in the Company or any of its Subsidiaries;
(iii) amend any term of any outstanding security of the Company or its Subsidiaries, the Company Charter or the Company Bylaws, or any other comparable charter or organizational documents, or limited partnership or limited liability company agreements or similar documents, of the Company Operating Partnership or any Student Housing Subsidiary;
(iv) (A) merge or consolidate with any Person, except as provided in Section 7.04, (B) acquire (by merger, consolidation or acquisition) any corporation, partnership or other entity or (C) purchase any equity interest in or assets of, any Person or any division or business thereof;
(v) make, undertake or enter into commitments obligating the Company Schedule, without the prior written consent of Parent, during such periodCompany, the Company shall not do Operating Partnership or any Student Housing Subsidiary to make, any capital expenditures in excess of 105% of the following and shall not permit its subsidiaries to do any total amounts set forth as capital expenditures or development costs in the Company’s 2007 capital budget included in Section 6.01(b)(v) of the following:
Company Disclosure Schedule (a) Waive any stock repurchase rightsthe “Budget”), accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted capital expenditures in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent necessary to any non-exclusive license agreement related repair and/or prevent damage to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock properties of the Company or any of its subsidiariesSubsidiaries as is necessary in the event of an emergency situation, or in which event the Company shall provide written notice thereof to Parent within two (2) Business Days thereafter;
(vi) incur any securities convertible into shares indebtedness, except for purposes of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (iA) the issuance, delivery and/or sale of shares of Company Common Stock funding expenditures pursuant to the exercise of Options therefor outstanding as of the date of this AgreementBudget, and (iiB) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or funding other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as transactions permitted by this Section 5.1((m)6.01, (C) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products working capital purposes in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related including to the Company's enterprise business and that Parent's failure extent necessary to reasonably object pay dividends permitted pursuant to any such agreement within five business days Section 6.01(b)(i)), (D) for purposes of making payments to holders of any request for consent shall constitute such consent);
indebtedness existing as of the date of this Agreement and (jE) Incur, assume or pre-to pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) transaction expenses incurred in connection with the financing Contemplated Transactions;
(vii) mortgage, pledge or otherwise encumber any assets or securities of ordinary course trade payables consistent with past practicethe Company, the Company Operating Partnership or any Student Housing Subsidiary, or create or suffer any Lien thereon;
(iiviii) pursuant to prepay, refinance or amend any existing credit facilities indebtedness;
(ix) sell, lease (other than leases as landlord in the ordinary course of business) or otherwise dispose of any of the Company Properties, including by the disposition or (iii) as contemplated by this Agreementissuance of equity securities in an entity that owns a Company Property, except the Contemplated Transactions;
(kx) Hire sell, lease, or otherwise dispose of any employeeof its personal property or assets, except replacements for former non-officer employeesdispositions of obsolete personal property or in connection with sales of any Company Properties as permitted under Section 6.01(b)(ix);
(xi) make any loans, hired capital contributions or investments in any other Person, other than in the ordinary course of business consistent with past practice;
(lxii) Adopt make or amend rescind any employee stock purchase election relating to Taxes (except (i) any such election required by Law, (ii) any such election expressly provided for in this Agreement, (iii) an election for or employee stock option plan, on behalf of the Company Operating Partnership or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directorsSubsidiaries under Section 754 of the Code, officers, employees or consultants (iv) any other than normal periodic salary increases for non-officer employees election regarding Taxes made in the ordinary course of businessthe Company’s business that could not reasonably be expected to have a material adverse effect on the Company and any Subsidiary of the Company or any Parent Party upon or following the REIT Merger Effective Time or (v) necessary to preserve the Company’s status as a REIT or the partnership status of the Company Operating Partnership or the status of any other Subsidiary of the Company which files Tax Returns as a partnership for U.S. federal income tax purposes or as a qualified REIT subsidiary or a taxable REIT subsidiary under the applicable provisions of Section 856 of the Code, consistent provided that in such events, the Company shall promptly notify Parent of such election and shall not fail to make such election in a timely manner); provided that nothing in this Agreement shall preclude the Company from designating dividends paid by it as “capital gain dividends” within the meaning of Section 857 of the Code;
(xiii) (A) fail to maintain its books and records in all material respects in accordance with past practiceGAAP consistently applied, (B) make a change with respect to any of its methods, principles or practices of financial accounting in effect, other than as required by GAAP, (C) settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, other than settlements or compromises (I) relating to an increase in the payment of real property Taxes or sales Taxes in an amount not to exceed $1,000,000, individually or in the aggregate, or change (II) that do not result in a Tax liability of the Company, the Company Operating Partnership or any Student Housing Subsidiary that materially exceeds the amount reserved, in accordance with GAAP, with respect to such claim, action, or other proceeding, or (III) revalue in any material respect any management policies of its assets, including writing-off accounts receivable, except, in each of the foregoing cases, as may be required by the SEC, applicable Law or proceduresGAAP (in which case, the Company shall promptly inform Parent of such changes);
(mxiv) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law applicable Law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy Employee Benefit Plan in effect as of the date of this Agreement, (A) amend, modify, alter or terminate any such Company Employee Benefit Plan (other than immaterial amendments, modifications, alterations or terminations that have no economic effect), (B) adopt any new employee benefit plan, incentive plan, severance plan or agreement, bonus plan, compensation, special remuneration, retirement, health, life, disability, stock option or other plan, program, agreement or arrangement that would be a Company Employee Benefit Plan if it had been in existence on the date hereof (other than the renewal or continuation of any existing Company Employee Benefit Plan that is expiring in accordance with its terms on terms that are substantially similar to such existing Company Employee Benefit Plan), (C) except as set forth in Section 4.12 of the Company Disclosure Schedule, increase the compensation, bonus or fringe or other benefits of, or pay any discretionary bonus of any kind or amount whatsoever to, any current or former trustee, director, officer, employee or consultant, (D) grant or pay any severance, change of control or termination pay or termination benefits to, or increase in any manner the severance, change of control or termination pay or termination benefits of, any current or former trustee, director, officer, employee or consultant of the Company or any of its Subsidiaries, except the retention bonuses in the amounts set forth in Section 4.12 of the Company Disclosure Schedule, (E) grant any increase in, or otherwise alter or amend, any right to receive any severance, change of control or termination pay or termination benefits or enter into or otherwise amend or alter any employment, loan, retention, consulting, indemnification, termination, change of control, severance, incentive plan, equity award or similar agreement or arrangement with any employee, (F) establish, pay, agree to grant or increase any stay bonus, retention bonus or any similar benefit under any plan, agreement, award or arrangement or (G) hire new employees, except for replacement hires below the level of vice president, or enter into any new employment agreement with any permitted new hire, or grant any severance, change of control or termination pay or termination benefits to any permitted new hire other than severance and retention arrangements in an aggregate amount not to exceed $100,000;
(xv) waive, release, assign, settle or compromise any pending or threatened litigation, action or claim, including any shareholder derivative or class action claims, other than settlements or compromises for litigation providing solely for the payment of money damages where the amount paid, in settlement or compromise, does not exceed $500,000 in the aggregate, which settlement or compromise provides for a complete release of the Company and each of its applicable Subsidiaries for all claims and which do not provide for any admission of liability by the Company or any of its Subsidiaries or impose any obligation or restriction on the Parent Parties, the Surviving Entity, the Surviving Partnership or any of their Subsidiaries after the REIT Merger Effective Time;
(xvi) waive compliance in any material respect with, amend or terminate the terms of or breaches under, or assign any rights or claims under, any Material Contract;
(xvii) except with Parent’s prior written consent, which shall not be unreasonably withheld or delayed, enter into any Material Contract, terminate, or modify or amend in any material respect, any Material Contract to which the Company or any of the Student Housing Subsidiaries is a party; and
(xviii) modify, amend or change any existing Tax Protection Agreement in a manner that would adversely affect the Company, the Company Operating Partnership, any Student Housing Subsidiary, the Surviving Entity, the Surviving Partnership, Parent or any Subsidiary of Parent, or enter into any new Tax Protection Agreement;
(xix) deliver a response to any buy/sell or other similar notices in respect of the joint venture assets of the Student Housing Subsidiaries;
(xx) except as provided in Section 7.04, authorize, recommend, propose, adopt or announce an intention to adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Student Housing Subsidiaries (other than the Contemplated Transactions);
(xxxi) Increase the aggregate dollar value of inventory owned by distributors fail to pay all premiums due and payable for material insurance policies and/or fail to keep material insurance policies in the first full force and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998effect;
(yxxii) Begin shipment fail to perform its obligations under any agreement relating to any outstanding indebtedness of the Company, the Company Operating Partnership or any new products Student Housing Subsidiary such that any such failure would result in an event of default under any such agreement (in each case after giving effect to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesapplicable waivers); or
(zxxiii) Agree agree in writing or otherwise to take any action inconsistent with any of the actions described in Section 5.1(a) through (y) aboveforegoing.
Appears in 2 contracts
Samples: Merger Agreement (GMH Communities Trust), Merger Agreement (GMH Communities Trust)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of Pending the Merger. The ----------------------------------------------------- Company Schedulecovenants and agrees that, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its termsor the Offer Completion Date, the Effective Timeunless Parent shall otherwise agree in writing, or such time and except as Parent's designees shall constitute a majority set forth in Section 5.1 of the Company BoardDisclosure Letter or as contemplated hereby, the Company shall conduct its business and each shall cause the businesses of its subsidiaries shallSubsidiaries to be conducted only in, and the Company and its Subsidiaries shall not take any action except to in, the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted course of business and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts a manner consistent with past practices practice; and policies the Company shall use reasonable commercial efforts to (i) preserve substantially intact the business organization of the Company and its present business organizationSubsidiaries, (ii) to keep available the services of the present officers, employees and consultants of the Company and its Subsidiaries and to preserve the present officers relationships of the Company and employees, and (iii) preserve its relationships Subsidiaries with customers, suppliers, distributors, licensors, licensees, suppliers and others other persons with which it the Company or any of its Subsidiaries has significant business dealingsrelations. In additionBy way of amplification and not limitation, except as permitted contemplated by this Agreement, or as required by applicable law or rule of any stock exchange or over-the-counter market, neither the terms Company nor any of its Subsidiaries shall, during the period from the date of this AgreementAgreement and continuing until the earlier of the termination of this Agreement or the Offer Completion Date, and except as provided set forth in Section 5.1 of the Company ScheduleDisclosure Letter, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend Amend or otherwise change the period its certificate of exercisability of options incorporation or restricted stockby- laws, or reprice options granted under any employee, consultant, director amend the Rights Agreement or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on reduce the date hereof and disclosed in the Company Schedulerights issued thereunder;
(b) Grant Issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any severance shares of capital stock of any class, or termination pay any options, warrants, convertible securities or other rights of any kind to acquire any officer shares of capital stock, or employee any other ownership interest (including, without limitation, any phantom interest) in the Company, any of its Subsidiaries or affiliates (except for the issuance of shares of Company Common Stock issuable pursuant to written agreements outstandingCompany Stock Options under the Company Stock Option Plans, or policies existing, which options are outstanding on the date hereof hereof; provided that the occurrence of a separation of the rights under the -------- Rights Agreement, and disclosed in the related issuance of shares of Company Common Stock to the Company's shareholders thereunder shall not be deemed a breach of this Agreement to the extent that (i) the occurrence of such separation occurred as a result of an unsolicited acquisition of Company Common Stock by a third party, and (ii) such acquisition did not occur as a result of the Company Schedule, or adopt any new severance planbreaching Section 5.2 hereof);
(c) Transfer Sell, pledge, dispose of or license to encumber any person or entity or otherwise extend, amend or modify in any material respect any rights to assets of the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted any of its Subsidiaries (except for (i) sales of inventory in the ordinary course of business and in a manner consistent with past practice and (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days ii) dispositions of any request for consent shall constitute such consentobsolete or worthless assets);
(di) Declare, set aside aside, make or pay any dividends on dividend or make any other distributions distribution (whether in cash, stock, equity securities stock or propertyproperty or any combination thereof) in respect of any of its capital stock or 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 of its capital stock 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, (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) commence any claim, suit or other action or settle, pay or discharge any claim, suit or other action brought or threatened against the Company other than any claim, suit or action with respect to or arising out of the ordinary course of business which is not material to the Company considered as a whole;
(i) Acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; (ii) incur any indebtedness for borrowed money, except in the ordinary course of business 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, make any loans or advances, except in the ordinary course of business consistent with past practice; (iii) commit to make any capital stockexpenditures or purchases of fixed assets; provided except in the ordinary course of business consistent with past practice; or (iv) enter into any lease agreement other than in the ordinary course of business consistent with past practices;
(f) 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 (who are not directors or executive officers of the Company) in accordance with past practices, or grant any severance or termination pay (except payments required to be made under obligations existing on the date hereof that are disclosed to Parent or Purchaser in accordance with the terms of such obligations) to, or enter into any employment or severance agreement with, any employee of the Company or any of its Subsidiaries, except for agreements with new employees 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, any of the Company's wholly-owned subsidiaries Benefit Plans (within the meaning of Section 3.2(a)), 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 declarebe required by law or as would not result in a material increase in the cost of maintaining such collective bargaining agreement, set aside Benefit Plan, trust, fund, policy or pay dividends arrangement;
(g) Take any action to change material accounting policies or make other distributions procedures (including, without limitation, procedures with respect to their capital stock 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) Except in the ordinary course of business, make any Tax election or settle or compromise any material 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), 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 Reports or incurred in the ordinary course of business and consistent with past practice;
(j) Enter into any contract or agreement which is material to the Company other than in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquireamend, directly modify or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with consent to the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securitiesMaterial Contract, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(zk) Agree Take, or agree in writing or otherwise to take take, any of the actions described in Section Sections 5.1(a) through (yi) above, or any action which would make any of the representations or warranties of the Company contained in this Agreement untrue or in correct or prevent the Company from performing or cause the Company not to perform its covenants hereunder.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Novartis Inc), Agreement and Plan of Merger (Wesley Jessen Visioncare Inc)
Conduct of Business by the Company. Except as contemplated by (a) From the date of this Agreement until the earlier of the First Effective Time or the time this Agreement is terminated in accordance with Article VII, except to the extent required by Law, as may be consented to in writing by Parent, as may be expressly required or permitted pursuant to this Agreement, or as set forth in Section 5.1 of the Company Schedule, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company BoardDisclosure Letter, the Company shall, and shall cause each of its subsidiaries shallSubsidiaries to, except use commercially reasonable efforts to the extent that Parent shall otherwise consent in writing, carry on (i) operate its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance business in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice, (ii) maintain all its assets in good repair and condition (except to the extent of reasonable wear and use or of damage by fire or other unavoidable casualty or by any reason outside of the Company’s or its Subsidiaries’ control) and (iii) take all commercially reasonable steps available to it to maintain the goodwill of its businesses. The impact of any loss of employees to the extent attributable to the announcement, pendency or consummation of this Agreement or the transactions contemplated by this Agreement will not be a breach of this Section 5.1(a). Without limiting the foregoing, from the date of this Agreement until the earlier of the First Effective Time or the time this Agreement is terminated in accordance with Article VII, except to the extent required by Law, as may be consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), as may be expressly required or permitted pursuant to this Agreement, or as set forth in Section 5.1 of the Company Disclosure Letter, the Company shall not, and shall not permit any of its Subsidiaries to, take any of the following actions:
(i) make any borrowings other than borrowings in the ordinary course of business under working capital lines which are disclosed in the notes to the financial statements included in the Company 10-K or the notes to the financial information included in the Company 10-Q;
(lii) Adopt enter into any material contractual commitments involving capital expenditures, loans or advances, and not voluntarily incur any contingent liabilities, except in each case (A) in the ordinary course of business or (B) with respect to any land development, land acquisition or construction contract in the form in which it exists at the date of this Agreement;
(iii) redeem or purchase any of its stock or declare or pay any dividends, or make any other distributions or repayments of debt to its stockholders (other than payments by Subsidiaries of the Company to the Company or to wholly owned Subsidiaries of the Company);
(iv) make any loans or advances (other than advances in the ordinary course for travel and other normal business expenses) to stockholders, directors, officers or employees;
(v) make any material change to its methods of accounting in effect as of the date hereof, except as required by a change in GAAP (or any interpretation thereof) or in applicable Law, or make any change with respect to accounting policies, unless required by GAAP or the SEC;
(vi) purchase, sell, dispose of or encumber any material property or assets, or engage in any material activities or transactions, except (i) purchases or sales in accordance with Contracts entered into before the date of this Agreement as they are in effect on the date of this Agreement, (ii) purchases of real property for use in their homebuilding business having a purchase price with regard to any single purchase or group of related purchases of less than $15 million or less than $75 million in the aggregate, (iii) bulk land sales having a sale price as to any single sale or group of related sales of less than $5 million, (iv) sales of homes or lots in the ordinary course of business, (v) the exercise of options to purchase real property in the ordinary course of business and (vi) grants of easements and other encumbrances in the ordinary course of business to the extent such easements and encumbrances would not reasonably be expected to materially interfere with the use of the properties for the purposes for which they were acquired or as the Company currently intends to use them;
(vii) become engaged in any lines of business in which it is not actively engaged on the date of this Agreement or discontinue any line of business in which it is actively engaged on the date of this Agreement;
(viii) (x) enter into or amend any employment, bonus, severance or similar agreements or arrangements that would have constituted a Material Employment Agreement if in place on the date hereof or (y) increase the salaries of any employees, other than through normal annual merit increases or otherwise in connection with any promotion to fill a bona fide vacancy in a position in the aggregate averaging not more than 5% (provided that any promotional increase to an amount not exceeding the salary of the prior employee stock purchase or employee stock option planwho vacated the applicable position will not count toward such 5%);
(ix) adopt, become a sponsoring employer with regard to, or amend, any defined benefit plan or post-employment health or welfare plan or arrangement (other than as required by Law);
(x) amend its Certificate of Incorporation or Bylaws;
(xi) (i) issue or sell any of its stock or any options, warrants or convertible or exchangeable securities that may entitle holders to acquire its stock, in each case, except in connection with the vesting or settlement of any equity incentive awards outstanding at the date of this Agreement under the Equity Plan, the LTI Plans or otherwise, or (ii) split, combine, or reclassify its outstanding stock;
(xii) enter into an agreement to modify in any material respect the nature or limits (including retention amounts) of insurance coverage that it or its Subsidiaries maintain;
(xiii) (i) make, change or revoke any material elections under the Code or any state, local or foreign Tax Laws, (ii) change any annual tax accounting period, (iii) materially amend any Tax Return relating to a material amount of Taxes, (iv) adopt or amend change an accounting method in respect of Taxes except as required by applicable Law, (v) consent to any extension or waiver of the limitation period applicable to a Tax Return relating to a material employee benefit planamount of Taxes, (vi) request a Tax ruling, (vii) engage in any transaction that will give rise to a material deferred gain or loss, (viii) enter into any employment contract a tax sharing, tax indemnity or collective bargaining tax allocation agreement (other than offer letters and letter agreements as part of arrangements entered into in the ordinary course of business consistent or in connection with past practice with employees who are terminable "at will"transactions not primarily related to Taxes), pay (ix) surrender any special bonus right to request a material refund of Taxes or special remuneration (x) settle or otherwise agree to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) a resolution of any of its directors, officers, employees material claim or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or proceduresassessment relating to Taxes;
(mxiv) Make take any payments outside of action, or fail to take any action, which action or failure to act prevents or impedes (whether as a direct or indirect consequence), or could reasonably be expected to prevent or impede, the ordinary course of business in an aggregate excess of $250,000transactions contemplated by this Agreement from qualifying for the Intended Tax Treatment;
(nxv) Except in take any action or fail to take any action that would reasonably be expected to prevent or materially delay the ordinary course consummation of business, modify, amend the Initial Merger or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;other transactions contemplated by this Agreement; and
(oxvi) Enter into, amend authorize or extend enter into any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise agreement to take any of the actions described referred to in Section 5.1(asubparagraphs (i) through (yxv) above.
(b) Nothing contained in this Agreement is intended to give Parent or Merger Subs, directly or indirectly, the right to control or direct the operations of the Company or any subsidiary of the Company prior to the First Effective Time. Prior to the First 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 businesses and operations.
Appears in 2 contracts
Samples: Merger Agreement (WCI Communities, Inc.), Merger Agreement (Lennar Corp /New/)
Conduct of Business by the Company. Except During the period from the date of this Agreement to the earlier to occur of (i) the date of the termination of this Agreement and (ii) the Effective Time, except as set forth in this Section 4.01(a) of the Company Disclosure Letter or as consented to in writing by Parent (such consent not to be unreasonably withheld or delayed) or as otherwise permitted, contemplated or required by this Agreement or as set forth required by Law, the Company shall, and shall cause each of its Subsidiaries to, carry on its business in Section 5.1 the ordinary course consistent with past practice and in compliance with all material Laws and all material authorizations from Governmental Entities prior to the Closing and, to the extent consistent therewith, use commercially reasonable efforts to preserve intact its current business organization and goodwill, preserve its assets and properties in good repair and condition, maintain capital expenditure levels consistent with past practices, keep available the services of its current officers, employees and consultants and preserve its relationships with customers, suppliers, licensors, licensees, distributors, and others having significant business dealings with it. In addition to and without limiting the generality of the Company Scheduleforegoing, during the period from the date of this Agreement and continuing until to the earlier to occur of (i) the date of the termination of this Agreement pursuant to its terms, and (ii) the Effective Time, or such time except as Parent's designees shall constitute a majority otherwise set forth in Section 4.01(a) of the Company BoardDisclosure Letter or as otherwise permitted, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts contemplated or taxes, pay required by this Agreement or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted required by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such periodLaw, the Company shall not do any of the following not, and shall not permit its subsidiaries to do any of the following:its Subsidiaries to, without Parent’s prior written consent (such consent not to be unreasonably withheld or delayed):
(ai) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(bA) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declaredeclare, set aside or pay any dividends on on, or make any other distributions (whether in cash, stock, equity securities stock or property) in respect of, any of its capital stock, partnership interests or any capital stock other equity or voting interests, or otherwise make any payments to its stockholders in their capacity as such, other than dividends or distributions by a direct or indirect wholly owned Subsidiary of Holdings, (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 any shares of its capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(eC) Purchasepurchase, redeem or otherwise acquire, directly or indirectly, acquire any shares of its capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, other securities thereof or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any such shares or other securities, except for purchases, redemptions or other acquisitions of capital stock or other securities (1) required (or permitted in connection with any net share settlement or Tax withholding) by the terms of the Company Stock Plan, the Holdings Stock Plans or any award agreement thereunder, (2) required by the terms of any plans, arrangements or Contracts existing on the date hereof between the Company or any of its Subsidiaries and any director, employee or equity holder of the Company or any of its Subsidiaries or (3) acquisitions of limited partnership units in Holdings upon the exchange thereof for shares of such Company Common Stock in accordance with the Exchange Agreement and/or an Option Unit Exchange Agreement;
(ii) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien any shares of its capital stock stock, any other of its voting securities, any equity interests in any of its Subsidiaries, including partnership interests, or any securities convertible into shares of capital stockor exercisable for, or enter into other agreements any rights, warrants or commitments of any character obligating it options to issue acquire, any such shares shares, voting securities or convertible securities, other than or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, except for (i1) issuances or sales of any of the issuanceforegoing to Holdings or any wholly owned Subsidiary of Holdings, delivery and/or sale (2) issuance of shares of Company Common Stock pursuant to upon the exercise of Company Stock Options therefor outstanding as of on the date hereof (or issued in connection with the conversion of this AgreementHoldings Stock Options), (3) issuances of limited partnership units in Holdings upon the exercise of Holdings Stock Options outstanding on the date hereof, and (ii4) issuance of shares of Company Common Stock upon the grant exchange of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired a partnership unit in Holdings in accordance with Section 5.1((k))the Exchange Agreement and/or an Option Unit Exchange Agreement and a corresponding issuance of a partnership unit in Holdings to the Company in connection with any such exchange;
(giii) Cause, permit propose or propose adopt any amendments to its the Company Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries)the Company Bylaws;
(hiv) Acquire make any acquisition (whether by merger, consolidation, acquisition of stock or agree to acquire by merging acquisition of assets) of any assets, rights or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof orproperties, except as permitted by Section 5.1((m)for (1) or acquisitions which have a purchase price ((r)), otherwise acquire or agree to acquire including any assets which are material, individually or assumption of indebtedness) not in excess of $40 million in the aggregate, (2) capital expenditures, which shall be subject to the business limitations of clause (ix) below, and (3) purchases of assets in the Company ordinary course of business, including from suppliers or enter into any joint venture, strategic partnership or alliancevendors;
(i1) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products other than in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to practice, amend, renew, terminate or waive any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days material provision of any request for consent shall constitute Material Contract; provided that no such consent)renewal may be made if such renewal would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, or (2) enter into any new Contract containing (A) any material restriction on the ability of the Company and its Subsidiaries to conduct its business as it is presently being conducted or (B) any material restriction on the Company and its Subsidiaries engaging in any type or activity or business;
(jvi) Incursell, assume lease, transfer, license, subject to a lien, mortgage or pre-pay any indebtedness for borrowed moneypledge, guarantee any indebtedness allow to lapse or obligation of another personexpire, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect otherwise dispose of any rights, properties or assets of the foregoing other than Company or any of its Subsidiaries that are material to the Company and its Subsidiaries, taken as a whole, except (iA) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) as required to be effected pursuant to Contracts existing credit facilities as of the date hereof or entered into after the date hereof in the ordinary course of businesscompliance with this Agreement, or (iiiB) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(lvii) Adopt incur or amend any employee stock purchase or employee stock option planotherwise acquire, or adopt or amend modify in any material employee benefit planrespect materially adverse to the Company and its Subsidiaries, taken as a whole, the terms of, any indebtedness for borrowed money, or enter into assume, guarantee or endorse, or otherwise become responsible for, any employment contract or collective bargaining agreement such indebtedness of another person (other than offer letters Holdings and letter agreements entered into any wholly owned Subsidiary of Holdings), or issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, other than in the ordinary course of business, except for refinancing of existing indebtedness;
(viii) make any loans or advances to any person (other than loans or advances by Holdings or any wholly owned Subsidiary of Holdings to the Company, Holdings or any wholly owned Subsidiary of Holdings), other than (i) loans or advances made in the ordinary course of business, and (ii) as required by any Contract or other legal obligation of the Company or any of its Subsidiaries in existence as of the date of this Agreement;
(ix) make any new capital expenditure, other than capital expenditures in an aggregate amount not in excess of (A) 100% of the pro rata portion (between the date of this Agreement and the Closing Date) plus (B) 20%, in each case of the Company’s annual budget for capital expenditures provided to Parent prior to the date of this Agreement;
(x) waive, release, assign, settle or compromise any Action other than settlements or compromises of Actions where the amount paid by the Company or any of its Subsidiaries (less the amount reserved for such matters by the Company and less the amount of any insurance recoveries) in settlement or compromise does not exceed $5 million in the aggregate;
(xi) except as required by GAAP or as advised by the Company’s regular independent public accountant, make any change in financial accounting methods, principles or practices affecting the reported consolidated assets, liabilities or results of operations of the Company in any material respect;
(xii) other than in the ordinary course of business consistent with past practice or as required by applicable Law or any Contract in existence as of the date of this Agreement, (i) increase the amount of compensation or benefit paid to, or enter into or amend any employment, change-in-control or severance agreement with, any executive officer or director of the Company or other Company Personnel (except, with employees who are terminable "at will"respect to Company Personnel, as would not reasonably be expected to materially increase costs for the Company Personnel in the aggregate), pay (ii) grant any special bonus or special remuneration bonuses to any directorCompany Personnel, employee (iii) enter into or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentadopt any new Company Benefit Plan or amend or modify any existing Company Benefit Plan, or increase (iv) take any action to accelerate the salaries vesting or wage rates payment, or fringe fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan;
(including rights xiii) authorize or adopt, or publicly propose, (A) a plan of complete or partial liquidation or dissolution of the Company or (B) to severance merge or indemnificationconsolidate the Company with or into any other person;
(xiv) outside of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, the Company’s administration of its Tax matters: adopt or change in any material respect any management policies method of Tax accounting in respect of recognition of income for U.S. Federal income Tax purposes, make or procedureschange any material Tax election or file any amended material Tax Return;
(mxv) Make make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
to any Affiliate, other than (ni) Except payments under existing Contracts and renewals thereof in the ordinary course on arms’-length terms, (ii) payments under Contracts entered into with portfolio companies of business, modify, amend or terminate any material contract or agreement to which The Blackstone Group L.P. after the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties date of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves this Agreement in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those on arms’-length terms; provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 The Blackstone Group L.P. did not participate in any calendar quarter;
(s) Materially accelerate negotiations or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or discussions concerning the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value terms of such inventory at June 30Contracts, 1998;
and (yiii) Begin shipment of any new products compensation or benefits paid to customers, except for alpha versions and not more than 50 beta versions of any product delivered Company Personnel (subject to customers solely for evaluation purposesthe restrictions set forth in clause (xii) above); or
(zxvi) Agree except in writing the case of commitments to make new capital expenditures (subject to the limitations set forth in clause (ix) above), authorize any of, or otherwise commit or agree to take any of of, the actions described in Section 5.1(a) through (y) aboveforegoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Silgan Holdings Inc), Merger Agreement (Graham Packaging Co Inc.)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of Pending the Merger. The Company Schedulecovenants and agrees that, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, or the Effective Time, or such time as Parent's designees unless Parent shall constitute a majority of the Company Boardotherwise agree in writing, the Company shall conduct its business and each shall cause the businesses of its subsidiaries shallSubsidiaries to be conducted only in, and the Company shall not take any action except in, and shall cause its Subsidiaries not to take any action except in, the extent that Parent shall otherwise consent ordinary course of business and in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same a manner as heretofore conducted consistent with past practice and in compliance in all material respects with all applicable laws and regulations; and the Company shall use reasonable best efforts to preserve substantially intact the business organization of the Company and its Subsidiaries, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of the current officers, employees and consultants of the Company and its Subsidiaries and to preserve the present officers relationships of the Company and employees, and (iii) preserve its relationships Subsidiaries with customers, suppliers, distributors, licensors, licensees, suppliers and others other persons with which it the Company or any of its Subsidiaries has significant business dealingsrelations. In additionParent and the Company agree that the individuals identified in Section 5.1(a) of the Disclosure Schedule shall be authorized to provide the agreement of Parent to the various acts of the Company contemplated by this Section 5.1 during the period from the date of this Agreement until the earlier of the termination of this Agreement or the Effective Time. By way of amplification and not limitation, (a) except as permitted contemplated by this Agreement and (b) as set forth in Section 5.1(b) of the terms Disclosure Schedule, the Company shall not and shall not permit its Subsidiaries to, during the period from the date of this AgreementAgreement and continuing until the earlier of the termination of this Agreement or the Effective Time, and except as provided in directly or indirectly do, or propose to do, any of the Company Schedule, following without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or otherwise change the period of exercisability of options Company Charter or restricted stock, Company By-Laws or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company ScheduleSubsidiary Documents;
(b) Grant issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any severance shares of capital stock of any class, or termination pay any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including, without limitation, any phantom interest) in the Company, any of its Subsidiaries or affiliates, other than (i) the issuance of shares of Company Common Stock pursuant to the exercise of currently outstanding Company Stock Options or outstanding purchase rights under the ESPP, (ii) the grant of options under the 1995 Plan to purchase up to 5,000 additional shares of Company Common Stock to any officer individual or employee except pursuant up to written agreements outstanding100,000 additional shares of Company Common Stock in the aggregate; provided that such options (A) are issued in the ordinary course of business consistent with the Company’s past practice, or policies existing(B) are issued in connection with the hiring of new employees, (C) are issued at exercise prices at least equal to the fair market value per share of the Company Common Stock on the date hereof and disclosed of grant, (D) do not include any vesting acceleration provisions other than those set forth in the 1995 Plan, and (E) vest in accordance with the Company’s standard vesting schedule under the 1995 Plan or (iii) the issuance of shares of Company Schedule, or adopt any new severance planCommon Stock pursuant to such option grants;
(c) Transfer sell, pledge, dispose of or license to encumber any person or entity or otherwise extend, amend or modify in any material respect any rights to assets of the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, any of its Subsidiaries (other than non-exclusive licenses granted (i) sales of assets in the ordinary course of business and in a manner consistent with past practice practice, not to exceed $150,000.00 in the aggregate, (it being agreed ii) dispositions of obsolete or worthless assets or (iii) sales of immaterial assets not in excess of $75,000.00), provided that Parent for the avoidance of doubt the foregoing shall not unreasonably withhold consent apply to any non-exclusive license agreement related to sales of the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)’s products or services in the ordinary course;
(d) Declare(i) declare, set aside aside, make or pay any dividends on dividend or make any other distributions distribution (whether in cash, stock, equity securities stock or propertyproperty or any combination thereof) in respect of any of its capital stock stock, except that a direct or indirect wholly owned Subsidiary of the Company may declare and pay a dividend to its parent, (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for any shares of its capital stock; provided that , or (iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any Subsidiary to purchase, repurchase, redeem or otherwise acquire, any of its securities or any securities of its Subsidiaries, or any option, warrant or right, directly or indirectly, to acquire any such securities, or propose to do any of the foregoing, other than pursuant to (i) the exercise of currently outstanding Company Stock Options and purchase rights under the ESPP or (ii) the exercise of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions ’s repurchase rights with respect to their unvested shares held by individuals terminating employment or service with the Company or any Subsidiary;
(i) acquire (by merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances or capital stock contributions to or investments in any other person, except in the ordinary course of business and consistent with past practices.
practice; (eiii) Purchaseenter into, redeem amend (including without limitation with respect to any rights in or otherwise acquire, directly to any intellectual property of any person) in any material respect or indirectly, waive (including without limitation with respect to any shares rights in or to any intellectual property of capital stock any person) any material right under any contract or agreement of the Company or its subsidiaries, except repurchases of unvested shares at cost any type referred to in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date Section 3.6 hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) any agreement for the issuancepurchase, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, leasesale, license, encumber distribution, maintenance or otherwise dispose support of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, Company products or the license provision of the Company's products consulting services related thereto entered into in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to ’s business), any such joint venture or development or marketing agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of with any of the foregoing other than (ientities listed in Section 5.1(e)(iii) in connection with of the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of businessDisclosure Schedule, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements not entered into in the ordinary course of business consistent with past practice with employees who practices, or enter into, renew, amend or terminate any lease relating to real property, or open or close any facility, provided, however, that the Company shall be entitled to sublease existing leases and facilities; (iv) adopt or implement any stockholder rights plan; (v) authorize any capital expenditures or purchase of fixed assets which are terminable "at will"), pay in excess of $100,000.00 for any special bonus individual expenditure or special remuneration to purchase or in excess of $1.5 million in the aggregate for all such expenditures or purchases for the Company and its Subsidiaries taken as a whole; (vi) modify its standard warranty terms for its products or amend or modify any director, employee or consultant except pursuant to written agreements outstanding on product warranties in effect as of the date hereof and previously disclosed of this Agreement in writing any manner that is adverse to Parent, the Company or increase any Subsidiary; (vii) pledge or otherwise encumber shares of capital stock of the salaries Company or wage rates any Subsidiary; (viii) mortgage or fringe benefits (including rights to severance or indemnification) of pledge any of its assets, tangible or intangible, or create or suffer to exist any Lien thereupon; or (ix) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 5.1(e);
(f) increase the compensation payable or to become payable to its directors, officers, officers or employees or consultants (other than normal periodic salary increases for payable to non-officer employees made in the ordinary course of business, business consistent with past practice), make any loan, advance or capital contribution, or change in grant any material respect severance or termination pay to, or enter into or amend any management policies employment or procedures;
(m) Make severance agreement with, any payments outside director, officer or other employee of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets Subsidiaries (other than the booking granting of reserves severance pay in connection with the involuntary termination of any Company non-officer or non-director employee, other than any individual identified in Section 5.1(f) of the Disclosure Schedule, in an amount consistent with the Company’s written practices or in connection with agreements that were in effect prior to the date of this Agreement and are listed on Section 5.1(f) of the Disclosure Schedule), establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees of the Company or any of its Subsidiaries, pay any discretionary bonuses to any officer of the Company, materially change any actuarial assumption or other assumption used to calculate funding obligations with respect to any pension or retirement plan, or change the manner in which contributions to any such plan are made or the basis on which such contributions are determined, except, in each case, as may be required by law or contractual commitments which are existing as of the date of this Agreement and listed in Section 3.13 of the Disclosure Schedule;
(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 GAAP or, except as so required, change any assumption underlying, or method of calculating, any bad debt contingency or other reserve;
(h) make any material Tax election inconsistent with past practice or settle or compromise any material federal, state, local or foreign Tax liability or agree to an extension of a statute of limitations, fail to file any Tax Return when due (or, alternatively, fail to file for available extensions) or fail to cause such Tax Returns when filed to be complete and accurate; or fail to pay any Taxes when due;
(i) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), in an amount that does not exceed $50,000 for any single claim, liability or obligation, or $150,000 in the aggregate, other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practices) or, except as required by a change practice of liabilities reflected or reserved against in law the financial statements contained in the Filed Company SEC Documents or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees incurred in the ordinary course of business and consistent with past practice;
(rj) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or fail to pay accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected payable and other obligations in the ordinary course of business;
(tk) Materially delay accelerate the collection of receivables or accelerate modify the payment terms of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of businessreceivables;
(ul) Settle sell, securitize, factor or compromise otherwise transfer any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000accounts receivable;
(vm) Make any tax election not required by law adopt a plan of complete or settle partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that other reorganization of the Company may renew or any insurance policy in effect as of Subsidiary (other than the date of this AgreementMerger);
(xn) Increase revalue in any material respect any of its assets, including writing down the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998or writing off notes or accounts receivable;
(yo) Begin shipment of any new products to customerstake, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree or agree in writing or otherwise to take take, any of the actions described in Section 5.1(aSections 5.1 (a) through (yn) above, or any action which would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder, in each case, such that the conditions set forth in Sections 7.2(a) or 7.2(b), as the case may be, would not be satisfied.
Appears in 2 contracts
Samples: Merger Agreement (Emc Corp), Merger Agreement (Legato Systems Inc)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the The Company Schedulecovenants and agrees that, during the period from the date of this Agreement and continuing until prior to the earlier of the termination time of this Agreement pursuant the appointment or election to its terms, the Effective Time, or such time as Parent's designees shall constitute Board of Directors of persons designated by the Offeror who represent a majority of the directors of the Company Board(the “Effective Time”) and the termination of this Agreement, unless the Offeror shall otherwise agree in writing or as otherwise expressly contemplated or permitted by this Agreement, the Company will, and will cause each of its subsidiaries shall, except the Company’s Subsidiaries (as that term is defined in Section 5.2) to:
(a) continue to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance course consistent with past practice in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject use reasonable best efforts to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organizationorganization and goodwill, (ii) to keep available the services of its present officers and employees, employees as a group and (iii) preserve its to maintain satisfactory relationships with customers, suppliers, distributors, licensorscustomers, licensees, employees and others having business relationships with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedulethem;
(b) Grant not split, consolidate or reclassify any severance or termination pay to of its outstanding shares nor undertake any officer or employee other capital reorganization (except pursuant to written agreements outstandingas required by Section 1.7), or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declarenor declare, set aside or pay any dividends on on, reduce capital or make any other distributions (whether in cash, stock, equity securities on or property) in respect of its outstanding shares other than the declaration and payment of regular dividends (meaning current cash dividends at the levels required to be paid in accordance with the Company’s currently outstanding preferred and preference shares, and quarterly cash dividends on its Common Shares in accordance with the Company’s current dividend policy as established in July 2005, and not reduce its stated capital;
(c) not amend its articles or by-laws or the terms of any capital stock or splitof its outstanding securities, combine or reclassify including any capital stock or outstanding indebtedness and credit facilities;
(d) not issue or authorize any securities (other than the issuance of any other securities in respect ofCommon Shares upon the exercise of currently outstanding stock options and convertible debt instruments, in lieu of accordance with their terms), or in substitution for any capital stock; provided that redeem, offer to purchase or purchase any of its outstanding securities except for the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock redemption of such of its currently outstanding Junior Preference Shares from holders of such shares who have duly exercised the retraction rights provided for in the ordinary course terms of business and consistent with past practices.such shares upon the occurrence of a Change of Control Event (as defined in such terms) or as the Offeror may direct pursuant to Section 1.2(e);
(e) Purchasenot enter into, redeem adopt, amend, vary, modify or otherwise acquiretake any other action with respect to any bonus, directly profit sharing, incentive, salary or indirectlyother compensation, equity based award, pension, retirement, deferred compensation, severance, change in control, employment or other employee benefit plan, agreement, trust, fund, or arrangement for the benefit or welfare of any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employeeofficer, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiariesemployee, or any securities convertible into shares of such capital stock, similar rights or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securitiesbenefits except for changes in compensation for employees, other than (i) the issuanceofficers and directors, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(lf) Adopt not acquire any capital assets or amend any employee stock purchase group of related capital assets (through one or employee stock option plan, more related or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters unrelated acquisitions) having a value in excess of U.S. $50 million in the aggregate in the one year period following the date of this Agreement unless expressly contemplated in the Company’s operating budgets and letter agreements entered into conducted in the ordinary course of business consistent with past practice with employees who are terminable "at will")practice;
(g) not sell, pay lease, option, encumber or otherwise dispose of any special bonus capital assets or special remuneration to any director, employee group of related capital assets (through one or consultant except pursuant to written agreements outstanding on more related or unrelated transactions) having a value in excess of U.S. $50 million in the aggregate for all such transactions in the one year period following the date hereof of this Agreement unless expressly contemplated in the Company’s operating budgets and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made conducted in the ordinary course of business, business consistent with past practice, or change in any material respect any management policies or procedures;
(mh) Make not incur or commit to incur any payments outside indebtedness for borrowed money or issue any debt securities, except for the borrowing of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves working capital in the ordinary course of business and consistent with past practices) orpractice under existing credit facilities Disclosed to the Offeror or through an offering of commercial paper backed by existing credit facilities Disclosed to the Offeror, except as required by a change in law incur or in GAAP commit to incur, or guarantee, endorse or otherwise become responsible for any other material liability, obligation or indemnity or the rules obligations of the SECany other Person or other business organization, or make any change in accounting methods, principles loans or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any to wholly-owned subsidiary of the Company and the Company subsidiaries, or another wholly-owned subsidiary of the Company and except for liabilities, obligations, indemnities, loans or advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and of business consistent with past practice;
(ri) Authorize not authorize, agree to issue, issue or make capital expenditures beyond those provided in award any stock options under any existing plan of the Company's existing capital expenditure budget, Company or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarterotherwise;
(sj) Materially accelerate not pay, discharge or delay collection of satisfy any notes material claims, liabilities or accounts receivable in advance of obligations other than the payment, discharge or beyond their regular due dates or the dates when the same would have been collected satisfaction, in the ordinary course of business;
(t) Materially delay business consistent with past practice, of liabilities reflected or accelerate payment of any account payable beyond reserved against in the Company’s financial statements or in advance of its due date or the date such liability would have been paid incurred in the ordinary course of businessbusiness consistent with past practice;
(uk) Settle not, and not authorize, recommend or compromise propose to, waive, release, grant, transfer, exercise or amend any suits rights of value or claims modify or threatened suits change in any material respect (i) any existing contractual rights in respect of any material joint ventures or claims for payments material mineral properties or rights of any kind, or (ii) any other material licence, lease, contract or other document other than in an aggregate amount in excess the ordinary course of $500,000business consistent with past practice, and only if so doing would not materially adversely affect the Company;
(vl) Make not enter into any tax election not required by law interest rate, currency, equity or settle commodity swaps, hxxxxx, derivatives or compromise other similar financial instruments, except bona fide metal hxxxxx under Canadian GAAP entered into to eliminate any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy bona fide price risk to lapse (it being understood that the Company may renew any insurance policy associated with customers purchasing metals for future delivery and in effect the ordinary course of business as Disclosed to the Offeror (within the meaning of the date of that term as defined in Schedule C to this Agreement);
(xm) Increase use reasonable best efforts to cause its current insurance (or re-insurance) policies or any of the aggregate dollar value coverage thereunder not to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance and re-insurance companies of inventory owned by distributors nationally recognized standing providing coverage equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in the first full force and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998effect;
(yn) Begin shipment not incur, or commit to, capital expenditures in excess of Cdn. $50 million in the aggregate during the period between the date of this Agreement and December 31, 2005, and not in excess of Cdn. $50 million in the aggregate thereafter not otherwise included in the capital expenditures budgets of the Company covering its existing operations and projects Disclosed to the Offeror, and not make any formal or informal decision or take any other action, including, but not limited to, any transfer or assignment to any Person of any ownership interest in any company or other entity involved or otherwise participating in such project or any commitment associated with any such project, to advance or otherwise proceed with any project involving capital expenditures in excess of Cdn. $100 million (or, in the case of any of the foregoing dollar amounts, the equivalent in any other currency or currencies based upon the prevailing exchange rates), in each case other than as for those capital expenditures presently contemplated and Disclosed to the Offeror;
(o) not make any changes to existing accounting policies other than as required by applicable Law or by Canadian GAAP;
(p) not engage in any transaction with any related parties other than with wholly-owned Subsidiaries in the ordinary course;
(q) not commit to or enter into any new products arrangements, or modify any existing arrangements, between the Company and any shareholder or holder of Convertible Securities of the Company owning or controlling more than 5% of the outstanding securities of any class of the Company other than amendments or revocation to customersthe insurance program currently provided by the Brascan insurance facility;
(r) not acquire or agree to acquire (by merger, amalgamation, acquisition of stock or assets or otherwise) any Person or other business organization or division or make any investment either by purchase of shares or securities, contributions of capital (other than to wholly-owned Subsidiaries), property transfer or purchase of any property or assets of any other Person, except for alpha versions purchases of inventory or equipment in the ordinary course of business consistent with past practice, and except for capital expenditures permitted by Section 4.1(n);
(s) (i) duly and timely file all Tax returns required to be filed by it on or after the date hereof and all such Tax returns will be true, complete and correct; (ii) timely withhold, collect, remit and pay all Taxes which are to be withheld, collected, remitted or paid by it to the extent due and payable except for any Taxes contested in good faith pursuant to applicable Laws; (iii) not more than 50 beta versions make or rescind any material express or deemed election relating to Taxes; (iv) not make a request for a tax ruling or enter into a closing agreement with any taxing authorities; (v) not settle or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes and (iv) not change in any material respect any of its methods of reporting income, deductions or accounting for income tax purposes from those employed in the preparation of its income tax return for the tax year ending December 31, 2004, except as may required by applicable Laws;
(t) duly and timely file all material forms, reports, schedules, statements and other documents required to be filed pursuant to any applicable corporate Laws or Securities Laws;
(u) not adopt a plan of liquidation or resolutions providing for the liquidation or dissolution of the Company or any of its Subsidiaries;
(v) promptly notify the Offeror orally and in writing of (i) any material adverse change (within the meaning of the Securities Act (Ontario)), on a consolidated basis, in the operation of its businesses or in the operation of its properties and of any product delivered material governmental or third party complaints, investigations or hearings (or communications indicating that the same may be contemplated); and (ii) the occurrence, or failure to customers solely for evaluation purposes; or
occur, of any event or state of facts which occurrence or failure would or would be likely to (zx) Agree in writing or otherwise to take cause any of the actions described representations or warranties of the Company contained herein (including, for greater certainty, contained in Section 5.1(aSchedule C to this Agreement) through to be untrue or inaccurate; or (y) aboveresult in the failure in any material respect of the Company to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied prior to the Effective Time;
(w) not enter into any transaction or perform any act which might interfere with or be materially inconsistent with the successful completion of the acquisition of Common Shares by the Offeror or the Acquisition Company pursuant to the Offer or the successful completion of a Contemplated Transaction within 120 days of the Expiry Time or which would render, or which reasonably may be expected to render, inaccurate any of the Company’s representations and warranties set forth in Schedule C to this Agreement or interfere with the completion of the Offer, a Compulsory Acquisition or an amalgamation of the Company and the Offeror; and
(x) not announce an intention, enter into any formal or informal agreement, or otherwise make a commitment to do any of the things prohibited by any of the foregoing subparagraphs.
Appears in 2 contracts
Samples: Support Agreement (Falconbridge LTD), Support Agreement (Inco LTD)
Conduct of Business by the Company. Except as contemplated Pending the Closing 5.01. Conduct of Business by this Agreement or as set forth in Section 5.1 of the Company SchedulePending the Closing. The Company agrees that, during the period from between the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time except as Parent's designees shall constitute a majority set forth in Section 5.01 of the Company BoardDisclosure Schedule or as contemplated by any other provision of this Agreement, unless Fiat shall otherwise agree in writing, which agreement shall not be unreasonably withheld or delayed, (1) the businesses of the Company and each of its subsidiaries shall, except to the extent that Parent Company Subsidiaries shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore be conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligationsonly in, and use its commercially reasonable efforts the Company and the Company Subsidiaries shall not take any action except in, the ordinary course of business consistent with past practices practice and policies (2) the Company shall use its reasonable best efforts to (i) preserve intact its present business organization, (ii) keep available the services of its present officers such of the current officers, significant employees and employees, consultants of the Company and (iii) the Company Subsidiaries and to preserve its the current relationships of the Company and the Company Subsidiaries with such of the customers, suppliers, distributors, licensors, licensees, suppliers and others other persons with which it the Company or any Company Subsidiary has significant business dealingsrelations in order to preserve substantially intact its business organization. In additionBy way of amplification and not limitation, except as permitted set forth in
Section 5.01 of the Company Disclosure Schedule or as contemplated by the terms any other provision of this Agreement, and except as provided in the Company Scheduleshall not, and shall neither (unless required by applicable Laws or stock exchange regulations) cause nor permit any Company Subsidiaries or any of the Company's affiliates (over which it exercises control), or any of its or their officers, directors, employees and agents (in each case, in their capacities as such) to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following, without the prior written consent of ParentFiat, during such period, the Company which consent shall not do any of the following and shall not permit its subsidiaries to do any of the followingbe unreasonably withheld or delayed:
(a) Waive any stock repurchase rights, accelerate, amend or otherwise change the period its Certificate of exercisability of options Incorporation or restricted stock, By-laws or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Scheduleequivalent organizational documents;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstandingissue, or policies existingsell, on the date hereof and disclosed in the Company Schedulepledge, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extenddispose of, amend or modify in any material respect any rights to the Company Intellectual Propertygrant, or enter into grants to future patenttransfer, copyright or other intellectual property rightslease, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declarelicense, set aside or pay any dividends on or make any other distributions (whether in cashguarantee, stockencumber, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(ei) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases any Company Subsidiary of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiariesclass, or any securities convertible into or exchangeable or exercisable for any shares of such capital stock, or subscriptions, rightsany options, warrants or options other rights of any kind to acquire any shares of such capital stock stock, or any securities convertible into other ownership interest (including, without limitation, any phantom interest), of the Company or any Company Subsidiary (except for (A) the issuance of any shares of capital stock issuable pursuant to (I) the exercise of any Company Options or Company Stock Awards outstanding on the date of this Agreement, pursuant to the exercise of options under the Company Employee Stock Purchase Plan or that become outstanding in compliance with Section 5.01(f); (II) the conversion of any shares of the Company Series A Cumulative Preferred Stock or Cumulative Convertible Second Preferred Stock, or (B) subject to Section 5.01(f), any securities required by virtue of the Company Equity Incentive Plan); or (ii) any property or assets of the Company or any Company Subsidiary, except in all cases in the ordinary course of business and in a manner consistent with past practice;
(c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or enter into other agreements or commitments otherwise, with respect to any of any character obligating it to issue any such shares or convertible securitiesits capital stock, other than (i) any regular quarterly dividend declared and paid on Company Common Stock or Company Preferred Stock in accordance with past practice and in the issuance, delivery and/or sale of shares case of Company Common Stock pursuant to Stock, not in excess of $.05 per share, and in the exercise case of Options therefor outstanding as Company Preferred Stock, not in excess of the date of this Agreement, rates required by the terms thereof and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of dividends paid by any of its subsidiaries);
(h) Acquire or agree the wholly owned Company Subsidiaries to acquire the Company and dividends paid by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business wholly owned Company Subsidiaries of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(ld) Adopt reclassify, combine, split, subdivide or amend any employee stock redeem, purchase or employee stock option planotherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire (including, without limitation, by merger, consolidation, or adopt acquisition of stock or amend assets) any material employee benefit planinterest in any corporation, partnership, other business organization, person or enter into any employment contract division thereof or collective bargaining agreement (any assets, other than offer letters and letter agreements entered into acquisitions of assets in the ordinary course of business consistent with past practice and any other acquisitions for consideration that are not, in the aggregate, in excess of $25,000,000; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person for borrowed money, except for indebtedness for borrowed money incurred in the ordinary course of business and consistent with employees who are terminable "at will"), pay any special bonus past practice or special remuneration incurred to any director, employee or consultant except pursuant to written agreements refinance outstanding indebtedness for borrowed money existing on the date hereof of this Agreement (which refinancing shall not increase the aggregate amount of indebtedness permitted to be outstanding thereunder and previously disclosed shall not include any covenants that shall be materially more burdensome to the Company in writing any material respect or increase costs to Parentthe Surviving Corporation after the Effective Time in any material respect); or other indebtedness for borrowed money with a maturity of not more than one year in a principal amount not, in the aggregate, in excess of $20,000,000; (iii) terminate, cancel or request any material change in, or increase agree to any material change in any Material Contract or enter into any contract or agreement material to the salaries business, results of operations or wage rates or fringe benefits (including rights to severance or indemnification) financial condition of any of its directorsthe Company and the Company Subsidiaries taken as a whole, officers, employees or consultants in either case other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice; (iv) make or authorize any capital expenditure, other than capital expenditures that are not, in the aggregate, in excess of $10,000,000 for the Company and the Company Subsidiaries taken as a whole; or change in (v) enter into or amend any material respect any management policies contract, agreement, commitment or proceduresarrangement that, if fully performed, would not be permitted under this Section 6.01(e);
(mf) Make increase the compensation payable or to become payable to its officers or employees, except for increases in accordance with past practices in salaries or wages of employees of the Company or any payments outside Company Subsidiary who are not officers of the Company, or grant any rights to severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or any Company Subsidiary, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee, except as contemplated by this Agreement or to the extent required by applicable Law or the terms of a collective bargaining agreement or a contractual obligation existing on the date hereof; provided, however, that the Company may grant options, restricted shares, performance units or other long-term incentive awards to new hires in the ordinary course of business in an aggregate excess of $250,000consistent with past practice;
(ng) Except in the ordinary course of business, modify, amend take any action with respect to modifying accounting policies or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Companyprocedures, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves actions in the ordinary course of business and consistent with past practices) or, except practice and as required advised by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practicesCompany's regular independent accountants;
(qh) Make waive, release, assign, settle or compromise any loans, advances material claims or capital contributions to, or investments in, any other person or entitylitigation involving money damages in excess of $2,500,000, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and claims asserted by the Company or another wholly-owned subsidiary of the applicable Company and advances of business related expenses Subsidiary;
(including expenses related to business traveli) to employees make any material Tax election or settle or compromise any material federal, state, local or foreign income Tax liability, other than such actions in the ordinary course of business and consistent with past practice, provided however that the Company shall inform New Holland in advance of such election or settlement or compromise if such election or settlement or compromise could have any ongoing material adverse tax consequence to the Surviving Corporation;
(j) authorize or enter into any formal or informal agreement or otherwise make any commitment to do any of the foregoing;
(k) amend or modify, or propose to amend or modify, the Rights Agreement, as amended as of the date hereof, except as contemplated in this Agreement;
(l) except as contemplated by Section 6.03, enter into any confidentiality agreements or arrangements other than in the ordinary course of business consistent with past practice;
(rm) Authorize except as contemplated by Section 6.03, take any action to exempt or make capital expenditures beyond those provided in not subject to any other state takeover law or state law that purports to limit or restrict business combinations or the Company's existing capital expenditure budgetability to acquire or vote shares, any person or that are individually in excess entity (other than Fiat or New Holland or any of $100,000 their subsidiaries) or in any action taken thereby, which person, entity or action would have otherwise been subject to the aggregate in excess of $500,000 in any calendar quarterrestrictive provisions thereof and not exempt therefrom;
(sn) Materially accelerate or delay collection of take any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected action that will likely result in the ordinary course of business;
(t) Materially delay representations and warranties set forth in Article IV becoming false or accelerate payment of any account payable beyond or inaccurate in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liabilityrespect;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) above.
Appears in 2 contracts
Samples: Merger Agreement (Case Corp), Merger Agreement (Case Credit Corp)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of Pending the Closing. The Company Scheduleagrees that, during the period from between the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time except as Parent's designees shall constitute a majority set forth in Section 5.01 of the Company BoardDisclosure Schedule or as contemplated by any other provision of this Agreement, the Company and each of its subsidiaries shall, except to the extent that unless Parent shall otherwise consent in writing, carry on its businesswhich consent shall not be unreasonably withheld or delayed, in all material respects, in (1) the usual, regular businesses of the Company and ordinary course, in substantially the same manner as heretofore Company Subsidiaries shall be conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligationsonly in, and use its commercially reasonable efforts the Company and the Company Subsidiaries shall not take any action except in, the ordinary course of business consistent with past practices practice and policies (2) the Company shall use its reasonable best efforts to (i) preserve intact its present business organization, (ii) keep available the services of its present officers such of the current officers, significant employees and employees, consultants of the Company and (iii) the Company Subsidiaries and to preserve its the current relationships of the Company and the Company Subsidiaries with such of the customers, suppliers, distributors, licensors, licensees, suppliers and others other persons with which it the Company or any Company Subsidiary has significant business dealingsrelations in order to preserve substantially intact its business organization. In additionBy way of amplification and not limitation, except as permitted set forth in Section 5.01 of the Disclosure Schedule or as contemplated by the terms any other provision of this Agreement, and except as provided in the Company Scheduleshall not, and shall neither cause nor permit any Company Subsidiaries or any of the Company's affiliates (over which it exercises control), or any of its or their officers, directors, employees and agents (in each case, in their capacities as such) to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following, without the prior written consent of Parent, during such period, the Company which consent shall not do any of the following and shall not permit its subsidiaries to do any of the followingbe unreasonably withheld or delayed:
(a) Waive any stock repurchase rights, accelerate, amend or otherwise change the period of exercisability of options its charter or restricted stock, bylaws or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Scheduleequivalent organizational documents;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstandingissue, or policies existingsell, on the date hereof and disclosed in the Company Schedulepledge, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extenddispose of, amend or modify in any material respect any rights to the Company Intellectual Propertygrant, or enter into grants to future patenttransfer, copyright or other intellectual property rightslease, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declarelicense, set aside or pay any dividends on or make any other distributions (whether in cashguarantee, stockencumber, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(ei) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases any Company Subsidiary of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiariesclass, or any securities convertible into or exchangeable or exercisable for any shares of such capital stock, or subscriptions, rightsany options, warrants or options other rights of any kind to acquire any shares of such capital stock stock, or any securities convertible into other ownership interest (including, without limitation, any phantom interest), of the Company or any Company Subsidiary (except for the issuance of any shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock stock issuable pursuant to the exercise of any Company Options therefor outstanding as of on the date of this Agreement, and ); or (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit any property or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint ventureCompany Subsidiary, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose except in all cases in the ordinary course of business and in a manner consistent with past practice; provided that the aggregate amount of any properties such sale or assets which are material, individually disposition (other than a sale or in the aggregate, to the business disposition of the Company, except sales of petroleum products or other inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent practice, as to which there shall be no restriction on the aggregate amount), or pledge, grant, transfer, lease, license, guarantee or encumbrance of such property or assets of the Company or any Company Subsidiary shall not unreasonably withhold consent to any non-exclusive license agreement related to exceed (x) $500,000 or (y) in the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days case of any request for consent shall constitute such consent)sale or disposition of retail gasoline sites, $1,000,000, provided that not more than four retail gasoline sites may be disposed of under this subsection (y) between the date of this Agreement and the Effective Time;
(jc) Incurdeclare, assume set aside, make or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls dividend or other rights distribution, payable in cash, stock, property or otherwise, with respect to acquire any debt securitiesof its capital stock, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of than dividends paid by any of the foregoing other than (i) in connection with wholly owned Company Subsidiaries to the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired Company in the ordinary course of business consistent with past practice;
(ld) Adopt reclassify, combine, split, subdivide or amend any employee stock redeem, purchase or employee stock option planotherwise acquire, directly or indirectly, any of its capital stock;
(i) acquire (including, without limitation, by merger, consolidation, or adopt acquisition of stock or amend assets) any material employee benefit planinterest in any corporation, partnership, other business organization, person or enter into any employment contract division thereof or collective bargaining agreement (any assets, other than offer letters and letter agreements entered into (x) acquisitions of any assets in the ordinary course of business consistent with past practice with employees who that are terminable "at will")not, pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of businessaggregate, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 300,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products purchases (whether for cash or pursuant to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) above.an
Appears in 2 contracts
Samples: Merger Agreement (Rosemore Inc), Merger Agreement (Rosemore Inc)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during During the period from the date of this Agreement and continuing until to the earlier of the termination of Acceptance Time, except as may be required by Law, as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), as expressly provided for in this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority set forth on Section 5.1 of the Company BoardDisclosure Letter, the Company shall, and shall cause each of the Company Subsidiaries (including, without limitation, the Company Partnership) to conduct its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, business only in the usual, regular and ordinary course, course and in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligationsconducted, and irrespective of whether or not in the ordinary course of business, the Company shall and shall cause each of the Company Subsidiaries to:
(a) use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) organizations and goodwill and keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant confer on a regular basis with one or more Representatives of Parent to report operational matters of materiality and any severance or termination pay proposals to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed engage in the Company Schedule, or adopt any new severance planmaterial transactions;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in promptly notify Parent of any material respect any rights to emergency or other material change in the Company Intellectual Propertycondition (financial or otherwise), business, properties, assets, liabilities or the normal course of its businesses or in the operation of its properties, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consentmaterial governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect promptly deliver to Parent true and correct copies of any capital stock report, statement or splitschedule filed with the SEC subsequent to the date of this Agreement, combine except for those that are promptly available to the public via the XXXXX database on the SEC’s website;
(e) maintain its books and records in accordance with GAAP consistently applied and not change in any material manner any of its methods, principles or reclassify any capital stock or issue or authorize practices of accounting in effect at the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any date of the Company's wholly-owned subsidiaries ’s most recent audited consolidated financial statements, except as may declarebe required by the SEC, set aside applicable Law or pay dividends GAAP;
(f) duly and timely file all Tax Returns required to be filed;
(g) not make or make rescind any election related to Taxes unless required by Law or necessary to preserve the Company’s status as a REIT or the status of any Company Subsidiary as a partnership for federal income tax purposes or as a qualified REIT subsidiary under Section 856(i) of the Code, as the case may be;
(h) not (A) acquire, enter into any option to acquire, or exercise an option or other distributions with respect right or election or enter into any other commitment or contractual obligation (each, a “Commitment”) for the acquisition of any real property or, except as permitted in a budget approved in writing by Parent, other transaction (other than Commitments referred to their capital stock in Section 5.1(h) of the Company Disclosure Letter) involving in excess of $250,000, or commence construction of, or enter into any Commitment to develop or construct other real estate projects, except in the ordinary course of business its business, including leasing activities, (B) incur or enter into any Commitment to incur additional Indebtedness (secured or unsecured) except for working capital under its credit facility and consistent with past practices.floor plan facility and Commitments for Indebtedness described in Section 5.1(h) of the Company Disclosure Letter or (C) modify or amend or terminate, or enter into any Commitment to modify or amend or terminate, any Indebtedness (secured or unsecured) in existence as of the date hereof;
(ei) Purchasenot amend the Company’s Constituent Documents or grant any waiver of the ownership limitations contained therein, redeem or otherwise acquirethe declaration of trust, directly articles or indirectlycertificate of incorporation, bylaws, code of regulations, partnership agreement, operating agreement or joint venture agreement or comparable charter or organizational document of any Company Subsidiary;
(j) issue no and make no change in the number of shares of capital stock or units of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securitieslimited partnership interest issued and outstanding, other than pursuant to (i) the issuanceredemption of OP Units under existing contracts, delivery and/or sale (ii) the redemption of shares of OP Units under the Company Partnership Agreement solely for Company Common Stock pursuant to or (iii) the exercise of Company Stock Options therefor outstanding as of the date of this Agreement;
(k) grant no options or other right or commitment relating to its shares of stock or units of limited partnership interest or any security convertible into its shares of stock or units of limited partnership interest, or any security the value of which is measured by shares of stock, or any security subordinated to the claim of its general creditors and not amend, waive or accelerate any rights under any of the Company Stock Option or Company Restricted Stock (ii) other than any acceleration that is required by the grant terms of employee stock options, consistent with any Company Stock Option or Company Restricted Stock as of the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k)date hereof);
(gl) Causeexcept for the payment of dividends on the Series A Preferred Stock in accordance with the terms of the Series A Preferred Stock, permit not (i) authorize, declare, set aside or propose pay any amendments dividend or make any distribution or payment with respect to its Certificate any Company Common Stock, OP Units or Series A Preferred Stock or (ii) directly or indirectly redeem, purchase or otherwise acquire any shares of Incorporationstock or units of partnership interest or any option, Bylaws warrant or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree right to acquire by merging or consolidating withacquire, or by purchasing any equity security convertible into, shares of stock or units of partnership interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into the Company Partnership, as the case may be, except for (A) deemed transfers of the Company excess shares required under the Company’s Constituent Documents in order to preserve the status of the Company as a REIT under the Code or the Company’s Constituent Documents, (B) redemptions of OP Units, whether or not outstanding on the date of this Agreement, under the Company Partnership Agreement in which solely shares of Company Common Stock are utilized, and (C) in connection with any joint venture, strategic partnership or alliancenet exercise of outstanding Company Stock Options;
(im) Sellnot sell, leaselease (other than leases to tenants at market rates in the ordinary course of business consistent with past practice), licensemortgage, encumber subject to Lien or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the CompanyCompany Properties;
(n) not sell, lease, mortgage, subject to Lien or otherwise dispose of any of its personal property or intangible property, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incuris not material, assume individually or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunderaggregate;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entityPerson, except for other than loans, advances, advances and capital contributions to Company Subsidiaries in existence on the date hereof and ordinary course expense advances to employees, and not enter into any new, or investments between amend or supplement any wholly-owned subsidiary of existing, contract, lease or other agreement with any Company Subsidiary;
(p) not pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the Company and the Company payment, discharge or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees satisfaction, in the ordinary course and of business consistent with past practice, or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) furnished to Parent or incurred in the ordinary course of business consistent with past practice;
(q) not enter into or amend any commitment with any officer, trust manager, trustee, director, consultant or Affiliate of the Company or any of the Company Subsidiaries;
(r) Authorize not guarantee the Indebtedness of another Person, enter into any “keep well” or make capital expenditures beyond those provided in other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the Company's existing capital expenditure budget, or that are individually in excess economic effect of $100,000 or in any of the aggregate in excess of $500,000 in any calendar quarterforegoing;
(s) Materially accelerate not (i) increase any compensation or delay collection enter into or amend any employment agreement with any of its officers, trust managers, trustees, directors or employees, (ii) enter into any notes employment agreement or accounts receivable in advance arrangement with any other Person not currently an employee of the Company or beyond their regular due dates a Company Subsidiary, other than to replace recently departed employees, or the dates when the same would have been collected (iii) take any action which could result in the ordinary course creation of businessa right of the type required to be disclosed in Section 3.20, or alter in any manner a payment or right disclosed on Section 3.20 of the Company Disclosure Letter;
(t) Materially delay not adopt any new Employee Plan, terminate any existing Employee Plan without the prior written consent of Parent or accelerate payment of amend any account payable beyond Employee Plan to (i) increase benefits, (ii) change the funding method with respect to such Employee Plan or in advance of its due date (iii) restrict the ability to amend or the date terminate such liability would have been paid in the ordinary course of businessEmployee Plan;
(u) Settle not settle any stockholder or compromise limited partner derivative or class action claims arising out of or in connection with any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000the transactions contemplated by this Agreement;
(v) Make not change the ownership of any tax election of the Company Subsidiaries;
(w) not required by law or settle or compromise any material tax liability for federal, state, local or foreign Tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase not accept a promissory note in payment of the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998exercise price payable under any Company Stock Option;
(y) Begin shipment not enter into or amend or otherwise modify or waive any rights under any agreement or arrangement for the benefit of Persons that are affiliates, or as of the date hereof, officers, trust managers, trustees or directors, of the Company or any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; orCompany Subsidiary;
(z) Agree not directly or indirectly or through a subsidiary, merge or consolidate with, acquire all or substantially all of the assets of, or acquire the beneficial ownership of a majority of the outstanding capital stock or other equity interest in writing any Person or otherwise entity;
(aa) continue to take qualify as a REIT prior to the Acceptance Time, and not enter into any transaction that would be considered a prohibited transaction within the meaning of Section 857(b)(6) of the Code; and
(bb) not authorize, recommend, propose or announce an intention to do any of the actions described in Section 5.1(a) through (y) aboveforegoing prohibited actions, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing prohibited actions.
Appears in 2 contracts
Samples: Merger Agreement (GCP Sunshine Acquisition, Inc. A Delaware Corp), Agreement and Plan of Merger (American Land Lease Inc)
Conduct of Business by the Company. Except as contemplated by During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, each of the Company and its subsidiaries shall, except to the extent that Parent shall otherwise previously consent in writing (which consent shall not be unreasonably withheld), carry on its business in the usual, regular and ordinary course of business, in substantially the same manner as heretofore conducted and in compliance in all material respects with all Applicable Laws, pay its debts and Taxes in the ordinary course of business consistent with past practice, subject to good faith disputes over such debts or Taxes, and pay or perform other material obligations in the ordinary course of business consistent with past practice, and use its commercially reasonable efforts consistent with past practice to (i) preserve intact its present business organization, (ii) to keep available the services of its officers and employees and (iii) continue to manage in the ordinary course of business its business relationships with third parties. In addition, except as permitted by the terms of this Agreement and except as set forth in Section 5.1 4.1 of the Company Disclosure Schedule, without the prior written consent of Parent (which consent shall not be unreasonably withheld), during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, terms or the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or repurchase of restricted stock, or reprice options granted under to any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under or take any of such plans except pursuant action with regard to written agreements outstanding, any warrant or policies existing, on the date hereof and disclosed in the Company Scheduleother right to acquire capital stock;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously made available or disclosed in the Company Schedulewriting to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, abandon, allow to be canceled, amend or modify in any material respect any rights to Company Intellectual Property (except for such issuances, registrations or applications that the Company Intellectual Property, has permitted to expire or enter into grants to future patent, copyright has cancelled or other intellectual property rightsabandoned in its reasonable business judgment), other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)practice;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiariesstock, except repurchases of unvested shares at cost in connection with the termination of the employment or service relationship with any employee, director employee or consultant service provider pursuant to stock option agreements or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of Company Options, (ii) granting to employees or other service providers (other than directors or officers of the Company) Company Options therefor outstanding to acquire no more than the number of shares set forth in Section 4.1(f) of the Company Disclosure Schedule under the Company Option Plans that are existing as of the date hereof in the ordinary course of business consistent with past practice in connection with periodic compensation reviews, ordinary course promotions or to new hires; provided, however, that no Company Options permitted to be granted under this Agreement, and clause (ii) may provide for any acceleration of any benefit, directly or indirectly, as a result of the grant transactions contemplated by this Agreement or any termination of employee stock options, consistent with employment or service thereafter or (iii) shares of Company Common Stock pursuant to the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k))terms and conditions of the Company ESPP;
(g) Cause, permit or propose any amendments to its the Certificate of Incorporation, Incorporation or Bylaws of the Company or other to the charter documents (or similar governing instruments of any subsidiary of its subsidiaries)the Company;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other association, business organization or other person or division thereof or, except as permitted by Section 5.1((m)) thereof; or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any material joint ventureventures, strategic partnership relationships or alliancealliances or make any material loan or advance to, or investment in, any person, except for loans or capital contributions to a subsidiary or advances of routine business or travel expenses to employees, officers or directors in the ordinary course of business consistent with past practice;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of other than inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)or immaterial assets;
(j) Incur, assume or pre-pay Incur any indebtedness for borrowed money, money or guarantee any such indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition securities of the Company or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, in the ordinary course of business or (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employeeExcept as expressly disclosed on Section 4.1(k) to the Company Disclosure Schedule, adopt or, except replacements as required by Applicable Laws or for former non-officer employeesamendments necessary to comply with the requirements of Section 409A of the Code, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any Company Employee Plan, employee stock purchase agreement or employee stock option plan, or adopt or amend any material other employee benefit plan or equity plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "“at will"”), pay any special bonus or special remuneration to any director, employee director or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentemployee, or increase the salaries or wage rates or fringe benefits (including rights to severance severance, change in control, termination or indemnificationindemnification payments) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practiceconsultants, or change in any material respect any management policies or procedures, other than salary increases and bonuses for employees (other than executive officers and directors) in the ordinary course of business consistent with past practice;
(l) Make any capital expenditures other than capital expenditures identified in the Company’s 2008 capital expenditure model, as provided to Parent, and such capital expenditures shall not exceed $7,000,000 in the aggregate;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modifyModify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party Material Contract or waive, release or assign any material rights or claims thereunder, except in the ordinary course of business consistent with past practice;
(n) Enter into any new agreement that, if entered into prior to the date hereof, would have been required to be listed in Section 2.16 of the Company Disclosure Schedule as a Material Contract;
(o) Enter into, modify, amend or extend cancel any contractsmaterial development services, agreementslicensing, distribution, purchase, sales, sales representation or obligations relating other similar agreement or obligation with respect to any Company Intellectual Property that is material to the distribution, sale, license or marketing by third parties operation of the Company's products business of the company as currently conducted or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights as currently contemplated to such third parties and provide for termination by the Company for convenience on not more than 60 days' noticebe conducted;
(p) Materially revalue any of its assets or, except as required by GAAP, make any change in tax or accounting methods, principles or practices;
(q) Discharge, settle or satisfy any disputed claim, litigation, arbitration, disputed liability or other controversy (absolute, accrued, asserted or unasserted, contingent or otherwise), including any liability for Taxes, other than the booking of reserves discharge or satisfaction in the ordinary course of business and consistent with past practices) orpractice, except as required by a change in law or in GAAP accordance with their terms, of liabilities reflected or the rules of the SEC, make any change reserved against in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company Balance Sheet or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees incurred since September 30, 2007 in the ordinary course and of business consistent with past practice, or waive any material benefits of, or agree to modify in any material respect, any confidentiality, standstill or similar agreements to which the Company or any of its subsidiaries is a party; provided, however, that the discharge or settlement of any disputed claim, liability or other controversy in the amount of less than $500,000 shall not be deemed to be prohibited by the foregoing; provided, however, that no pending or threatened claim brought by or on behalf of the Company’s shareholders may be settled without the prior written consent of Parent;
(r) Authorize Except as required by Applicable Law, make any material Tax election inconsistent with past practices or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess agree to an extension of $100,000 or in the aggregate in excess a statute of $500,000 in limitations for any calendar quarterassessment of any Tax;
(s) Materially accelerate Take any action that is intended or delay collection would reasonably be expected to prevent or materially impede the consummation of any notes of the transactions contemplated by this Agreement, including with respect to any “poison pill” or accounts receivable in advance of similar plan, agreement or beyond their regular due dates arrangement, any other anti-takeover measure, or the dates when the same would have been collected in the ordinary course of businessany Takeover Statute;
(t) Materially delay Take any action that is intended or accelerate payment of would reasonably be expected to result in any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors conditions set forth in the first and second tiers of its distribution channel (which has Article 6 not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesbeing satisfied; or
(zu) Agree in writing or otherwise to take any of the actions described in Section 5.1(a4.1(a) through (y4.1(t) above.
Appears in 2 contracts
Samples: Merger Agreement (Matria Healthcare Inc), Merger Agreement (Inverness Medical Innovations Inc)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, terms or the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and contemplated to be conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, due subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present executive officers and employees, key employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in Article 4 of the Company ScheduleSchedules, without the prior written consent of Parent, during such periodthe period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in the Company Schedulewriting or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the material Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property patent rights, other than non-exclusive licenses granted Ordinary Course Agreements and other than published privacy policies in the ordinary course of business and consistent with past standard industry practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)or consistent with applicable law affecting privacy rights;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service employment relationship with any employee, director or consultant employee pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber encumber, any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) stock options granted pursuant to Section 5.9(d) hereof, (ii) grants of stock options under the issuanceCompany's 1996 Equity Incentive Plan to newly hired employees, delivery and/or sale consistent with prior practice and Parent's option grant practices, (iii) issuance of shares of the Company Common Stock pursuant to the exercise of Options stock options therefor outstanding as of the date of this Agreement, Agreement or granted pursuant to the preceding clauses (i) and (ii) or pursuant to warrants outstanding on the grant date hereof and disclosed on the Company Schedules or upon the conversion of employee stock optionsconvertible debt outstanding on the date hereof and disclosed on the Company Schedules, consistent with and (iv) issuance of shares of the Company's established past practice for similarly situated employees, Company Common Stock to non-officer employees who are hired participants in accordance with Section 5.1((k))the Company Purchase Plan pursuant to the terms thereof;
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof orthereof, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any material joint ventureventures, strategic partnership partnerships or alliancealliances (it being understood that the Company acquires immaterial businesses without issuing any equity securities (other than the grant of stock options to new hires in the ordinary course of business consistent with past practice) and that the Company may continue to engage in such acquisitions following prior consultation with Parent's Chief Executive Officer, Chief Financial Officer or General Counsel, provided that the amount of such acquisitions shall not exceed $7,500,000 in any individual case or $50 million in the aggregate (it being further understood that no inference shall be drawn herefrom that any acquisition is immaterial by virtue of its amount being less than $7,500,000));
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)practice;
(j) Incur, assume or pre-pay Incur any indebtedness for borrowed money, money or guarantee any such indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securitiessecurities of the Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired equipment leasing arrangements in the ordinary course of business consistent with past practiceor (iii) increases of available borrowings under credit facilities on customary and commercially reasonable terms, provided that available borrowings under all credit facilities of the Company shall not be increased to an amount greater than $20 million in the aggregate prior to the date six months from the date hereof, or $30 million in the aggregate thereafter, without the prior written consent of Parent;
(lk) Adopt or amend any employee benefit plan or employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee director or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentemployee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(ml) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modifyModify, amend or terminate any Company Contract or other material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder, other than (i) the modification, amendment or termination of Ordinary Course Agreements in the ordinary course of business, consistent with past practice or (ii) immaterial oral modifications or amendments in the ordinary course of business, consistent with past practice;
(om) Enter intointo any licensing, amend distribution, sponsorship, advertising, merchant program or extend any similar contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' noticeOrdinary Course Agreements;
(pn) Materially revalue any of its material assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any material change in accounting methods, principles or practices, including inventory accounting practices;
(qo) Make take any loans, advances or capital contributions to, or investments in, action (including any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary action by its Board of Directors) to amend the terms of the Company and the Company Rights Plan or another wholly-owned subsidiary of the Company and advances of business related expenses otherwise to (including expenses related to business traveli) to employees cause any change, effect or result thereunder which would, in the ordinary course and consistent with past practice;
absence of such action, otherwise occur as a result of any Acquisition Proposal or Acquisition Transaction (ras defined below) Authorize or make capital expenditures beyond those provided in (ii) cause the Company's existing capital expenditure budget, or that are individually representation set forth in excess of $100,000 or in the aggregate in excess of $500,000 Section 2.21 hereof to be untrue in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesrespect; or
(zp) Agree in writing or otherwise to take any of the actions described in Section 5.1(a(a) through (yo) above.
Appears in 2 contracts
Samples: Merger Agreement (At Home Corp), Merger Agreement (Excite Inc)
Conduct of Business by the Company. Except as contemplated by (a) The Company covenants and agrees that, between the date of this Agreement and the earlier to occur of the Effective Time and the date, if any, on which this Agreement is terminated pursuant to Section 9.1 (the “Interim Period”), except to the extent required by Law, as may be agreed in writing by Parent, as may be expressly required or expressly permitted pursuant to this Agreement, or as set forth in Section 5.1 7.1(a) or Section 7.1(c) of the Company Schedule, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its termsDisclosure Letter, the Effective TimeCompany shall, or such time as Parent's designees and shall constitute a majority cause each of the Company BoardSubsidiaries to, the Company and each of (i) conduct its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance business in all material respects with all applicable laws in the ordinary course and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts in a manner consistent with past practices practice, and policies (ii) use its reasonable best efforts to maintain its material assets and properties in their current condition (i) normal wear and tear and damage caused by casualty or by any reason outside of the Company’s or the Company Subsidiaries’ control excepted), preserve intact in all material respects its present current business organization, (ii) goodwill, ongoing businesses and relationships with third parties, keep available the services of its present officers and employeesofficers, maintain all Company Insurance Policies, and maintain the status of the Company as a REIT. The consent of Parent shall be deemed to have been given for purposes of this Section 7.1(a) and Section 7.1(c) if Parent does not object in writing within five (iii5) preserve Business Days from the date on which the written request for such consent from the Company is received by Parent.
(b) The Company shall use its relationships with customerscommercially reasonable best efforts to obtain the Offer REIT Opinion and the Merger REIT Opinion.
(c) Without limiting the foregoing, suppliersthe Company covenants and agrees that, distributors, licensors, licensees, and others with which it has business dealings. In additionduring the Interim Period, except to the extent required by Law, as may be agreed in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), as may be expressly required or permitted by the terms of pursuant to this Agreement, and except or as provided set forth in Section 7.1(a) or 7.1(c) of the Company Schedule, without the prior written consent of Parent, during such periodDisclosure Letter, the Company shall not do any of the following not, and shall not cause or permit its subsidiaries to any Company Subsidiary to, do any of the following:
(ai) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant propose to written agreements outstanding, or policies existing, on the date hereof and disclosed in amend the Company Schedule;
Charter or Company Bylaws (bor such equivalent organizational or governing documents of any Company Subsidiary) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on waive the date hereof and disclosed in stock ownership limit under the Company Schedule, or adopt any new severance plan;
Charter (c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights other than the amendment to the Company Intellectual Property, Charter contemplated by Section 2.4(d) or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course grant of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consentOwnership Limit Waivers);
(dii) Declaresplit, combine, reclassify or subdivide any shares of stock or other equity securities or ownership interests of the Company or any Company Subsidiary;
(iii) declare, set aside or pay any dividends dividend on or make any other distributions (whether in cash, stock, property or otherwise) with respect to shares of stock of the Company or any Company Subsidiary or other equity securities or propertyownership interests in the Company or any Company Subsidiary, except for (A) the declaration and payment by the Company of the regular daily cash dividends, payable monthly, and not for any interim period (except as set forth in respect Section 7.10), in accordance with past practice, at an annual rate not to exceed $0.50 per share of Company Common Stock, (B) the declaration and payment of dividends or other distributions to the Company by any directly or indirectly wholly owned Company Subsidiary, and (C) distributions by any Company Subsidiary that is not wholly owned, directly or indirectly, by the Company, in accordance with the requirements of the organizational documents of such Company Subsidiary; provided, however, that, notwithstanding the restriction on dividends and other distributions in this Section 7.1(c)(iii), the Company and any Company Subsidiary shall be permitted to make distributions, including under Sections 858 or 860 of the Code, reasonably necessary for the Company to maintain its status as a REIT under the Code and avoid or reduce the imposition of any capital stock corporate level Tax or split, combine or reclassify any capital stock or issue or authorize excise Tax under the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.Code;
(eiv) Purchaseredeem, redeem repurchase or otherwise acquire, directly or indirectly, any shares of capital stock or other equity interests of the Company or its subsidiaries, except a Company Subsidiary (other than redemptions or repurchases of unvested shares at cost in connection with made pursuant to the termination restrictions on transfer and ownership of the service relationship with any employee, director or consultant pursuant to Company’s stock option or purchase agreements contained in effect on the date hereof (which repurchases Article VII of the Company shall be obligated to effectuate if the repurchase price is less than the Offer PriceCharter);
(fv) Issueexcept for transactions among the Company and one or more wholly owned Company Subsidiaries or among one or more wholly owned Company Subsidiaries, deliverissue, sell, authorizepledge, pledge dispose, encumber or otherwise encumber grant any shares of the capital stock Company’s or any of the Company or any of its subsidiaries, or any securities convertible into shares of such Subsidiaries’ capital stock, or subscriptionsany options, rightswarrants, warrants convertible securities or options other rights of any kind to acquire any shares of such the Company’s or any of the Company Subsidiaries’ stock or other equity interests;
(vi) grant, confer, award or modify the terms of any Company Options, convertible securities or other rights to acquire, or denominated in, any of the Company’s or any of the Company Subsidiaries’ capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible equity securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(gvii) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire (including by merger, consolidation or acquisition of stock or assets) any assets which are materialreal property, individually or personal property (other than personal property at a total cost of less than $50,000 in the aggregate), corporation, partnership, limited liability company, other business organization or any division or material amount of assets thereof, except acquisitions by the Company or any wholly owned Company Subsidiary of or from an existing wholly owned Company Subsidiary;
(viii) sell, pledge, lease, assign, transfer, dispose of or encumber, or effect a deed in lieu of foreclosure with respect to, any property or assets, except (A) pursuant to the business an obligation arising under any agreement referenced in Section 5.16(l) of the Company or enter into any joint ventureDisclosure Letter, strategic partnership or alliance;
and (iB) Sell, lease, license, encumber or otherwise dispose of any properties pledges and encumbrances on property or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed and that Parent shall would not unreasonably withhold consent be material to any non-exclusive license agreement related to Company Property or any assets of the Company's enterprise business and that Parent's failure to reasonably object to Company or any such agreement within five business days Company Subsidiary;
(ix) incur, create, assume, refinance, replace or prepay any Indebtedness for borrowed money or issue or amend the terms of any request debt securities of the Company or any Company Subsidiary or assume, guarantee or endorse, or otherwise become responsible (whether directly, contingently or otherwise) for consent shall constitute such consentthe Indebtedness of any other Person (other than a wholly owned Company Subsidiary);
(jx) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person Person (including to any of its officers, directors, employees, Affiliates, agents or consultants), make any change in its existing borrowing or lending arrangements for or on behalf of such Persons, or enter into any “keep well” or similar agreement to maintain the financial condition of another entity, except for loansother than (A) by the Company or a wholly owned Company Subsidiary to the Company or a wholly owned Company Subsidiary, advances, capital contributions and (B) loans or investments between advances required to be made under any wholly-owned subsidiary of the Company and Leases or ground leases affecting the Company Properties;
(xi) enter into, renew, modify, amend or terminate, or waive, release, compromise or assign any rights or claims under, any Company Material Contract (or any contract that, if existing as of the date hereof, would be a Company Material Contract), other than any termination or renewal in accordance with the terms of any existing Company Material Contract that occurs automatically without any action by the Company or another wholly-owned subsidiary any Company Subsidiary;
(xii) enter into, renew, modify, amend or terminate, or waive, release, compromise or assign any rights or claims under, any Company Lease (or any lease for real property that, if existing as of the date hereof, would be a Company Lease);
(xiii) waive, release, assign any material rights or claims or make any payment, direct or indirect, of any liability of the Company and advances of business related expenses (including expenses related to business travel) to employees or any Company Subsidiary before the same comes due in accordance with its terms, other than in the ordinary course and of business consistent with past practice;
(rxiv) Authorize settle or make capital expenditures beyond those provided compromise (A) any legal action, suit or arbitration proceeding, in each case made or pending against the Company's existing capital expenditure budgetCompany or any of the Company Subsidiaries, including relating to Taxes, and (B) any legal action, suit or that are individually proceeding involving any present, former or purported holder or group of holders of the Company Common Stock other than in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarteraccordance with Section 7.7;
(sxv) Materially accelerate (A) hire or delay collection terminate (other than for cause) any officer, director or employee of the Company or any Company Subsidiary or promote or appoint any Person to a position of officer or director of the Company or any Company Subsidiary, (B) increase in any manner the amount, rate or terms of compensation or benefits of any notes of its directors, officers or accounts receivable employees, (C) pay or agree to pay any pension, retirement allowance or other compensation or benefit to any director, officer, employee or consultant of the Company or any Company Subsidiary, whether past or present, (D) enter into, adopt, amend or terminate any employment, bonus, severance or retirement contract or Benefit Plan or other compensation or employee benefits arrangement, (E) accelerate the vesting or payment of any compensation or benefits, or (F) take any action to fund or in advance any other way secure the payment of compensation or beyond their regular due dates benefits under any employee plan, agreement, contract or the dates when the same would have been collected arrangement or Benefit Plan, in each case, other than as required by Law;
(xvi) fail to maintain all financial books and records in all material respects in accordance with GAAP (or any interpretation thereof) or make any material change to its methods of accounting in effect at January 1, 2014, except as required by a change in GAAP (or any interpretation thereof) or in applicable Law, or make any change, other than in the ordinary course of businessbusiness consistent with past practice, with respect to accounting policies, unless required by GAAP or the SEC;
(txvii) Materially delay or accelerate payment of enter into any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course new line of business;
(uxviii) Settle fail to duly and timely file all material reports and other material documents required to be filed with any Governmental Authority, subject to extensions permitted by Law or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000applicable rules and regulations;
(vxix) Make enter into, amend or modify any tax Company Tax Protection Agreement, or take any action that would violate any Company Tax Protection Agreement or otherwise give rise to any material liability of the Company or any Company Subsidiary with respect thereto, make, change or rescind any material election not required by law relating to Taxes, change a material method of Tax accounting, file or amend any material Tax Return, settle or compromise any material federal, state, local or foreign Tax liability, audit, claim or assessment, enter into any material closing agreement related to Taxes, or knowingly surrender any right to claim any material Tax refund, except in each case (A) if required by Law or (B) if necessary (x) to preserve the Company’s qualification as a REIT under the Code or (y) to qualify or preserve the status of any Company Subsidiary as a disregarded entity or partnership for United States federal income tax liabilitypurposes or as a Qualified REIT Subsidiary or a Taxable REIT Subsidiary under the applicable provisions of Section 856 of the Code, as the case may be;
(wxx) Cancel take any action, or terminate fail to take any material insurance policy naming it action, which action or failure would reasonably be expected to cause (A) the Company to fail to qualify as a beneficiary REIT or (B) any Company Subsidiary to cease to be treated as any of (1) a partnership or disregarded entity for United States federal income tax purposes or (2) a Qualified REIT Subsidiary or a loss payable payee or permit any such policy to lapse (it being understood that Taxable REIT Subsidiary under the Company may renew any insurance policy in effect as applicable provisions of Section 856 of the date of this Agreement)Code, as the case may be;
(xxxi) Increase adopt a plan of merger, complete or partial liquidation or resolutions providing for or authorizing such merger, liquidation or a dissolution, consolidation, recapitalization or bankruptcy reorganization, except by a Company Subsidiary in connection with any acquisitions permitted pursuant to Section 7.1(c)(vii) in a manner that would not reasonably be expected to be adverse to the aggregate dollar value Company or to prevent or impair the ability of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" Company to end-user customers and which such distributors have consummate the right to return) above the aggregate value of such inventory at June 30, 1998Merger;
(yxxii) Begin shipment initiate or consent to any zoning reclassification of any real property or any other material change to any approved site plan, special use permit, planned development approval or other land use entitlement materially affecting any Company Property, other than in connection with any eminent domain or condemnation proceedings regarding which the Company has provided prompt notice to Parent;
(xxiii) form any new products to customers, funds or joint ventures;
(xxiv) except for alpha versions and not more than 50 beta versions the expansion of a Company Property pursuant to expansion rights requested by the applicable tenant pursuant to the terms of the applicable Company Lease after prior notice to Parent, make or commit to make any product delivered capital expenditures;
(xxv) amend or modify the compensation terms or any other obligations of the Company contained in the engagement letter with the Company Financial Advisor in a manner adverse to customers solely for evaluation purposesthe Company, any Company Subsidiary or Parent or engage other financial advisers in connection with the transactions contemplated by this Agreement; or
(zxxvi) Agree in writing authorize, or otherwise enter into any contract, agreement, commitment or arrangement to take do any of the actions described foregoing.
(d) Notwithstanding anything to the contrary set forth in Section 5.1(a) through (y) abovethis Agreement, nothing in this Agreement shall prohibit the Company from taking any action, at any time or from time to time, that in the reasonable judgment of the Company Board, upon advice of counsel to the Company, is reasonably necessary for the Company to maintain its qualification as a REIT under the Code for any period or portion thereof ending on or prior to the Effective Time, including making dividend or other distribution payments to stockholders of the Company in accordance with this Agreement or otherwise.
Appears in 2 contracts
Samples: Merger Agreement (American Realty Capital Properties, Inc.), Merger Agreement (Cole Credit Property Trust Inc)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during the period from From and after the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its termsAgreement, the Effective Time, or such time as the date Parent's designees shall constitute a majority of the Company BoardBoard of Directors of the Company, the Company shall, and shall cause each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, Subsidiaries to:
(a) carry on its business, in all material respects, business in the usual, regular and ordinary course, course substantially in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedulecarried on;
(b) Grant any severance not (i) make payments or termination pay distributions (other than normal salaries) to any officer or employee Affiliate of the Company except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed for transactions in the Company Scheduleordinary course of business upon commercially reasonable terms and in accordance with past practice; (ii) sell, lease, transfer or adopt assign any new severance plan;
(c) Transfer of its assets, tangible or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rightsintangible, other than non-exclusive licenses granted the sale of products manufactured by the Company or any Subsidiary in the ordinary course of business and consistent with past practice other than the disposition of obsolete or unusable property; (it being agreed that Parent shall not unreasonably withhold consent to iii) enter into any non-exclusive license agreement related to Contract (x) involving more than $1.0 million individually or $5.0 million in the Company's enterprise business aggregate (other than purchase and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock sales orders in the ordinary course of business and consistent in accordance with past practices.
practice) or (ey) Purchaseoutside the ordinary course of business, redeem without the consent of the Parent (which consent shall not be unreasonably withheld, assuming for purposes of determining such reasonableness that the Offer and the Merger are consummated pursuant to the terms of this Agreement); (iv) accelerate, terminate, modify in any material respect, or otherwise acquirecancel any Contract (other than purchase and sales orders in the ordinary course of business in accordance with past practice) involving more than $1.0 million individually or $5.0 million in the aggregate to which the Company or any Subsidiary is a party without the consent of the Parent (which consent shall not be unreasonably withheld, directly assuming for purposes of determining such reasonableness that the Offer and the Merger are consummated pursuant to the terms of this Agreement); (v) make any capital expenditure (or indirectly, any shares series of related capital stock expenditures) other than expenditures identified in the current business plan of the Company or its subsidiariesSubsidiaries or (y) outside the ordinary course of business, except repurchases of unvested shares at cost in connection with without the termination consent of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof Parent (which repurchases the Company consent shall not be obligated to effectuate if the repurchase price is less than unreasonably withheld, assuming for purposes of determining such reasonableness that the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of and the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock Merger are consummated pursuant to the exercise of Options therefor outstanding as of the date terms of this Agreement); (vi) delay or postpone the payment of accounts payable and other liabilities outside the ordinary course of business; (vii) cancel, and (ii) the grant of employee stock optionscompromise, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit waive or propose release any amendments to its Certificate of Incorporation, Bylaws right or other charter documents claim (or similar governing instruments series of any of its subsidiaries);
related rights and claims) not covered by the reserves or accruals relating to such claim in the Company Financial Statements (hx) Acquire involving more than $1.0 million each or agree to acquire by merging or consolidating with, or by purchasing any equity interest $5.0 million in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) aggregate or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(iy) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in outside the ordinary course of business consistent with past practice without the consent of the Parent (it being agreed that Parent which consent shall not be unreasonably withhold consent to any non-exclusive license agreement related withheld, assuming for purposes of determining such reasonableness that the Offer and the Merger are consummated pursuant to the Company's enterprise business and that Parent's failure to reasonably object to terms of this Agreement); (viii) grant any such agreement within five business days license or sublicense of any request for consent shall constitute such consent);
rights under, or with respect to, any Intangible Assets; or (jix) Incurmake any loan to, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of other transaction with, any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practiceits Affiliates, (ii) pursuant to existing credit facilities in the ordinary course of businessdirectors, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in officers and employees outside the ordinary course of business consistent with past practice;
(lc) Adopt or amend any employee stock purchase or employee stock option planuse, or adopt or amend any material employee benefit planoperate, or enter into any employment contract or collective bargaining agreement maintain and repair all assets and properties of the Company necessary to conduct its business as currently conducted in a normal business manner consistent with its past practices;
(other than offer letters and letter agreements entered into d) use its reasonable best efforts to preserve its business organization intact, to retain the services of its employees, subject to changes in the ordinary course of course, and to conduct business consistent with past practice suppliers, customers, creditors and others having business relationships with employees who are terminable "at will"), pay any special bonus the Company or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made Subsidiaries in the ordinary course best interests of businessthe Company and its Subsidiaries, consistent with past practice, or change in any material respect any management policies or procedurestaken as a whole;
(me) Make any payments outside use its reasonable best efforts to maintain all of the ordinary course of business its Existing Insurance Policies (or policies substantially equivalent thereto) in an aggregate excess of $250,000full force and effect;
(nf) Except in the ordinary course of business, modify, amend or terminate not (i) except as required by any material contract or agreement Contract to which the Company or any subsidiary thereof is of its Subsidiaries are a party party, increase the rate of pay of or waiveother compensation to any of its directors, release officers or assign employees; (ii) institute or amend any material rights Employee Benefit Plan unless required by Law; (iii) enter into or claims thereundermodify any employment or severance agreement with any Person; or (iv) pay or accrue any bonus or incentive compensation to any Person;
(og) Enter intoexcept for Indebtedness for working capital not to exceed $6.0 million at any one time, not create, incur or assume any Indebtedness in excess of $5.0 million in the aggregate or make any Investment;
(h) not amend its Certificate of Incorporation, Bylaws or extend charter documents;
(i) not (i) issue any contractsadditional shares of stock of any class (except pursuant to its Existing Options) or grant any warrants, agreementsoptions or rights to subscribe for or acquire any additional shares of stock of any class; (ii) declare or pay any dividend or make any capital, surplus or other distributions (other than normal salaries) of any nature to the Stockholders; or (iii) directly or indirectly redeem, purchase or otherwise acquire, recapitalize or reclassify any of its capital stock or liquidate in whole or in part;
(j) timely and properly file, or obligations relating timely and properly file requests for extensions to file, all federal, state, local and foreign tax returns which are required to be filed, and pay or make provision for the distribution, sale, license payment of all taxes owed by it; and
(k) not do any act or marketing by third parties omit to do any act that would result in a breach of the Company's products or products licensed any representation by the CompanyCompany set forth in this Agreement.
(l) not make any tax elections, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and those consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle make any settlement or compromise any tax liability in either case that is material tax liability;to the Company or its Subsidiaries, without the prior written consent of the Parent (which consent shall not be unreasonably withheld).
(wm) Cancel enter into any agreement, arrangement or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy understanding with respect to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) aboveforegoing.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Walbro Corp), Agreement and Plan of Merger (Ti Group PLC)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during During the period from the date of this Agreement hereof and continuing until the earlier of the termination of this Agreement pursuant to its terms, terms or the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries Subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, use all reasonable efforts to carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes Taxes when due, due subject to good faith disputes over such debts or taxesTaxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially all reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, organization and (ii) keep available continue to manage in the services of ordinary course its present officers and employees, and (iii) preserve its business relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealingsthird parties. In addition, without limiting the generality of the foregoing, except as permitted by the terms of this Agreement, Agreement and except as provided in Section 4.1 of the Company ScheduleDisclosure Letter, without the prior written consent of Parent, during such periodthe period from the date hereof and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, the Company shall not do any of the following and shall not permit its subsidiaries Subsidiaries to do any of the following:
(a) Waive Except as required by Legal Requirements or pursuant to written agreements in effect or written policies existing on the date hereof,
(i) grant any severance or termination pay to any officer or employee,
(ii) waive any stock repurchase rights, accelerate, amend or change the period of vesting or exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock equity-related plans or agreements or authorize cash payments in exchange for any options granted under any of such plans except or agreements,
(iii) adopt any new severance retention or change in control plan, program, policy, agreement or arrangement,
(iv) adopt or amend any employee benefit plan, or employee stock purchase or employee stock option plan,
(v) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to written agreements outstandingany existing plan, agreement or arrangement to any officer, director or employee or pay or agree to pay or make any accrual or arrangement for payment to any officers, directors or employees of the Company or any of its Subsidiaries of any amount relating to unused vacation days, except payments, accruals or arrangement for payment made in the ordinary course of business consistent with past practice; adopt, amend or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, or policies existingother similar plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any Company or Company Subsidiary director, officer, employee, agent or consultant, whether past or present, other than in the ordinary course consistent with past practice,
(vi) enter into any employment contract, consulting agreement or collective bargaining agreement other than offer letters and letter agreements entered into in the ordinary course of business with employees who are terminable "at will" and foreign employees who would be terminable "at will" but for the Legal Requirements of such foreign jurisdictions,
(vii) pay any special bonus or special remuneration to any director, officer, consultant or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants other than increases to employees who are not directors in the ordinary course of business consistent with past practice; provided, however, that nothing herein shall prevent the Company from (A) granting Company Options to acquire no more than the number of shares of the Company Common Stock in the aggregate (including for this purpose options granted under Section 4.1(f) hereof) set forth on Schedule 4.1(a)(vii) under the Option Plans that are existing as of the date hereof in the ordinary course of business in connection with periodic compensation reviews or ordinary course promotions or to new hires, and which Company Options in each case (x) have a vesting schedule no more favorable than the Company's customary vesting schedule, (y) are granted at a per share exercise price no less than the per share fair market value of the Company Common Stock as of the date of grant of such Company Options and (z) do not accelerate, or become subject to acceleration, directly or indirectly, as a result of the approval or consummation of the Merger in accordance with the terms of this Agreement (other than pursuant to a change of control agreement to which the optionee is already a party on the date hereof and disclosed in the Company Schedule;
hereof), or (bB) Grant any granting severance or termination pay to any employee (other than an executive officer or employee except director) of the Company in the ordinary course of business in connection with the termination of such employee's employment in such reasonable amounts as the Company, following good faith consultation with Parent, deems advisable in its good faith judgment to avoid a material risk of litigation, or
(viii) (A) make any loans to, or make any change in its existing lending arrangements, or on behalf of any of its officers or directors, or (B) make any loans to any other employees or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such persons pursuant to written agreements outstandingany employee benefit plan or otherwise, or policies existing, on the date hereof other than travel and disclosed entertainment advances made in the Company Scheduleordinary course of business consistent with past practice;
(b) Adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or adopt any new severance planother reorganization (other than the Merger);
(c) Transfer Enter into any agreement or license assignment which has the effect of transferring or licensing to any person or entity or otherwise extendextending, amend amending or modify modifying in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)practice;
(d) Declare, set aside aside, or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or any of its subsidiariesSubsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service employment relationship with any employee, director or consultant employee pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases or entered into in the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)ordinary course of business;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of (i) shares of the Company Common Stock pursuant to the exercise of Options stock options or warrants therefor outstanding as of the date hereof, (ii) shares of this Agreementthe Company Common Stock issuable to participants in the ESPP consistent with the terms thereof, and (iiiii) Company Options to acquire no more than the grant number of employee stock options, shares of the Company Common Stock in the aggregate (including for this purpose Company Options granted under Section 4.1(a)(vii) hereof) set forth in Section 4.1(f) of the Company Disclosure Letter granted under the Option Plans that are existing as of the date hereof in the ordinary course of business consistent with past practice and in connection with periodic compensation reviews or ordinary course promotions or to new hires, and which Company Options in each case (x) have a vesting schedule no more favorable than the Company's established past practice for similarly situated employeescustomary vesting schedule, (y) are granted at a per share exercise price no less than the per share fair market value of the Company Common Stock as of the date of grant of such Company Options and (z) do not accelerate, or become subject to non-officer employees who are hired acceleration, directly or indirectly, as a result of the approval or consummation of the Merger in accordance with Section 5.1((k)the terms of this Agreement (other than pursuant to a change of control agreement to which the optionee is already a party on the date hereof);
(g) CauseSplit, permit combine or reclassify any class of capital stock;
(h) Authorize or propose any amendments to its Certificate of Incorporation, Incorporation or Bylaws or other charter documents (or similar governing instruments of any of its subsidiariesSubsidiaries);
(hi) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in all or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof orthereof; or except in the ordinary course of business consistent with past practice after good faith consultation with Parent, except as permitted by Section 5.1((m)(i) or ((r)), otherwise acquire or agree to acquire any assets which are materialsignificant, individually or in the aggregate, to the business of the Company Company; or (ii) enter into any joint venture, ventures or strategic partnership or alliancepartnerships (other than Commercial Affiliate Agreements);
(ij) SellExcept as previously disclosed in the Company SEC Reports and other than in the conduct of its business in the ordinary course consistent with past practice after good faith consultation with Parent, sell, transfer, lease, license, mortgage, pledge, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(jk) Incur, assume or pre-pay Incur any indebtedness for borrowed money, money or guarantee any such indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securitiessecurities of the Company, enter into any "keep well" or other agreement to maintain any financial statement condition condition, incur or modify any other material liability or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities as in effect on the date hereof in the ordinary course of business, or (iii) as contemplated loans, investments or guarantees by this Agreement;
the Company or any of its Subsidiaries to, in or of it or any of its Subsidiaries, or (kiv) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practiceany incurrences which are not, individually or in the aggregate, material to the Company and its Subsidiaries taken as a whole (provided that none of such transactions referred to in this clause (iv) presents a material risk of delaying the Merger or making it more difficult to obtain or otherwise reasonably cause a delay in obtaining any Necessary Consent);
(l) Adopt Modify or amend any employee stock purchase or employee stock option planin a manner adverse to the Company, or adopt or amend take any material employee benefit planaction to terminate, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary Subsidiary thereof is a party party, including any Top Commercial Affiliate Agreement, or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreementsany such modification, extensions amendment or amendments that grant non- exclusive rights to termination of any such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue material contract or any of its assets (other than the booking of reserves such waiver, release or assignment thereunder in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) above.
Appears in 2 contracts
Samples: Merger Agreement (Yahoo Inc), Merger Agreement (Overture Services Inc)
Conduct of Business by the Company. Except During the period from the date of this Agreement to the Effective Time, except as contemplated set forth in Section 4.01(a) of the Company Disclosure Schedule or as consented to in writing in advance by Parent (such consent not to be unreasonably withheld, delayed or conditioned) or as otherwise expressly permitted or required by this Agreement or as set forth otherwise required by applicable Law, the Company shall, and shall cause each of its Subsidiaries to, carry on its business in Section 5.1 all material respects in the ordinary course consistent with past practice prior to the Closing and, to the extent consistent therewith, use commercially reasonable efforts to preserve substantially intact its current business organizations, keep available the services of its current officers, employees and consultants and preserve its relationships with customers, suppliers, licensors, licensees, distributors and others having business dealings with it. In addition to and without limiting the generality of the Company Scheduleforegoing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time except as Parent's designees shall constitute a majority otherwise set forth in Section 4.01(a) of the Company Board, the Company and each of its subsidiaries shall, except Disclosure Schedule or as otherwise expressly permitted or required pursuant to the extent that Parent shall this Agreement or as otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all required by applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such periodLaw, the Company shall not do any of the following not, and shall not permit its subsidiaries to do any of the following:its Subsidiaries to, without Parent’s prior written consent (such consent not to be unreasonably withheld, delayed or conditioned):
(ai) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(bx) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declaredeclare, set aside or pay any dividends on on, or make any other distributions (whether in cash, stock, equity securities stock or property) in respect of, any of any its capital stock stock, other than (A) quarterly cash dividends with respect to Company Common Stock not in excess of $0.16 per share, with record and payment dates materially consistent with past practice and (B) dividends or distributions by a direct or indirect wholly owned Subsidiary of the Company to its stockholders, (y) 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 any capital stock; provided that any shares of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their its capital stock in the ordinary course of business and consistent with past practices.
or (ez) Purchasepurchase, redeem or otherwise acquire, directly or indirectly, acquire any shares of its capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, other securities thereof or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any such shares or other securities, except for purchases, redemptions or other acquisitions of capital stock or other securities (1) required by the terms of the Company Stock Plans or (2) required by the terms of any plans, arrangements or Contracts existing on the date hereof between the Company or any of its Subsidiaries and any director or employee of the Company or any of its Subsidiaries;
(ii) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien any shares of such its capital stock stock, any other voting securities or any securities convertible into shares of capital stockor exercisable for, or enter into other agreements any rights, warrants or commitments of any character obligating it options to issue acquire, any such shares shares, voting securities or convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units other than (i) the issuance, delivery and/or sale issuance of shares of Company Common Stock upon the exercise of Company Stock Options or Company Stock-Based Awards, in each case outstanding on the date hereof and in accordance with their terms on the date hereof;
(iii) amend the Company Certificate or the Company Bylaws or other comparable charter or organizational documents of any of the Company’s Subsidiaries, except to the extent such changes are required in order to change the name of any of the Company’s Subsidiaries pursuant to the exercise terms of Options therefor outstanding as of any Contract existing on the date hereof (to the extent complete and accurate copies of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, which have been heretofore delivered to non-officer employees who are hired in accordance with Section 5.1((k)Parent);
(giv) Cause, permit directly or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents indirectly acquire (or similar governing instruments of any of its subsidiaries);
(hx) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material substantial portion of the assets of, by making an investment in or capital contribution to, or by any other manner, any person or division, business or equity interest of any corporationperson or (y) any assets, partnership, association rights or other business organization or division thereof orproperties, except as permitted by Section 5.1((m)in the case of (x) or (y) for (r)), otherwise acquire or agree to acquire any assets which are material, individually or 1) capital expenditures consistent in all material respects with the aggregate, to the business amounts set forth on Section 4.01(a)(vii) of the Company Disclosure Schedule, (2) purchases of inventory, raw materials or enter into any joint venturesupplies, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or and other assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice and (it being agreed that Parent shall 3) other acquisitions, investments or capital contributions not unreasonably withhold consent to any non-exclusive license agreement related to exceeding $25 million in the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)aggregate;
(jv) Incursell, assume pledge, dispose of, transfer, abandon, lease, license, or pre-pay otherwise encumber or subject to any Lien any material properties, rights or assets, of the Company or any of its Subsidiaries, except (1) sales, pledges, dispositions, transfers, leases, licenses or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts, and (2) sales, pledges, dispositions, transfers, leases, licenses or encumbrances of (A) assets or properties of the Company or any of its Subsidiaries having a value not to exceed in the aggregate $25 million, or (B) inventory or finished goods or other assets in the ordinary course of business consistent with past practice;
(vi) (x) redeem, repurchase, prepay (other than prepayments of revolving loans under the Company Loan Agreements), defease, cancel, incur or otherwise acquire, or modify in any material respect the terms of, any indebtedness for borrowed moneymoney or assume, guarantee or endorse, or otherwise become responsible for, any such indebtedness or obligation of another person, issue or sell any debt securities or calls, options, warrants, calls warrants or other rights to acquire any debt securitiessecurities of the Company or any of its Subsidiaries, enter into any "“keep well" ” or other agreement Contract to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing (other than borrowings (iincluding issuances of letters of credit) under the Company Loan Agreements in connection with the financing of ordinary course trade payables of business consistent with past practice, in an aggregate amount such that the aggregate amount of borrowings thereunder do not exceed $50 million at any time outstanding) or (iiy) pursuant make any loans or advances to existing credit facilities any person, other than to the Company or any direct or indirect wholly owned Subsidiary of the Company, which would result in the aggregate principal amount of all loans and advances of the Company and its Subsidiaries exceeding $25 million at any time outstanding;
(vii) make any new capital expenditure or expenditures exceeding the amounts set forth in Section 4.01(a)(vii) of the Company Disclosure Schedule;
(viii) except as required by Law or any judgment by a court of competent jurisdiction, (x) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise) material to the Company and its Subsidiaries taken as a whole, other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms of liabilities disclosed, reflected or reserved against in the most recent audited financial statements (or the notes thereto) of the Company included in the Filed Company SEC Documents or incurred since the date of such financial statements in the ordinary course of business consistent with past practice, or (y) waive or assign any claims or rights material to the Company and its Subsidiaries taken as a whole;
(ix) except in the ordinary course of business consistent with past practice, enter into, modify, amend or terminate any Material Contract or waive, release or assign any material rights or claims thereunder, which if so entered into, modified, amended, terminated, waived, cancelled, failed to renew, released or assigned, in each case as applicable, would reasonably be expected to impair in any material respect the ability of the Company and its Subsidiaries to conduct their business as currently conducted;
(x) except (w) as required or permitted by this Agreement, (x) as required by applicable Law, (y) as required to comply with any Company Benefit Plan, Company Benefit Agreement or other Contract entered into prior to the date hereof or (z) as required or advisable to avoid adverse treatment under Section 409A of the Code, (A) adopt, enter into, terminate or amend (I) any Company Benefit Plan or (II) any Company Benefit Agreement or other Contract, plan or policy involving the Company or any of its Subsidiaries and Company Personnel, except in the ordinary course of business consistent with past practice with respect to employees of the Company or its Subsidiaries who are not Key Personnel, (B) grant any severance or termination pay or retention pay in excess of, with respect to retention, the amounts contemplated by the Retention Plan or, with respect to enhanced severance, as set forth in Section 3.01(m) of the Company Disclosure Schedule or increase the compensation or fringe benefits of any Company Personnel other than increases in the ordinary course of business, consistent with past practice, (C) loan or advance any money or other property to any Company Personnel, (D) establish, adopt, enter into, amend or terminate any Company Plan or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Benefit Plan if it were in existence as of the date of this Agreement, (E) allow for the commencement of any new offering periods under any employee stock purchase plans following January 2, 2008, (F) remove any existing restrictions in any Company Benefit Agreements, Company Benefit Plans or awards made thereunder, (G) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan or employment, severance or similar agreement (each, a “Company Benefit Agreement”), (H) take any action to accelerate the vesting or payment of any compensation or benefit under any Company Benefit Plan or Company Benefit Agreement or awards made thereunder, or (iiiI) as contemplated materially change any actuarial or other assumption used to calculate funding obligations with respect to any Company Pension Plan or change the manner in which contributions to any Company Pension Plan are made or the basis on which such contributions are determined; it being understood that it shall not be prohibited by this Section 4.01: (i) to make payments with respect to amounts of awards under the Company’s annual or long term incentive plans made prior to fiscal year 2008, provided that such awards are made in the ordinary course of business consistent with past practice and (ii) that awards in respect of fiscal year 2008 may be granted; provided, however, in no event will any bonus in respect of service performed or accrued in 2008 be paid or payable, except to the extent required to be paid or payable to an employee of the Company or its Subsidiaries under applicable Law, or as required by the terms of a Company Benefit Plan or Company Benefit Agreement, as such plan or agreement is in effect on the date hereof; and provided, further, payment or grant of such awards shall not include equity or equity-based awards;
(kxi) Hire enter into, modify, amend or terminate any employeecollective bargaining agreement with any labor union, except replacements for former non-officer employees, hired other than in the ordinary course of business consistent with past practice;
(lxii) Adopt except as required by GAAP or amend any employee stock purchase Law or employee stock option planpermitted by GAAP and deemed advisable by the Company’s regular independent public accountant, or adopt or amend revalue any material employee benefit plan, assets or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course liabilities of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law Subsidiaries or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
practices (q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew shall consult with Parent prior to any insurance policy revaluation or change in effect as of the date of this Agreementaccounting methods, principles or practices);
(xxiii) Increase effect or permit a “plant closing” or “mass layoff” as those terms are defined in WARN without complying with the aggregate dollar value notice requirements and all other provisions of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesWARN; or
(zxiv) Agree in writing authorize any of, or otherwise commit, resolve, propose or agree to take any of of, the actions described in Section 5.1(a) through (y) aboveforegoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Trane Inc.), Merger Agreement (Ingersoll Rand Co LTD)
Conduct of Business by the Company. Except (a) During the period from the date of this Agreement to the Effective Time, except as set forth in Section 5.01(a) of the Company Disclosure Schedule or as contemplated by this Agreement or as set forth consented to in Section 5.1 writing in advance by Parent (which consent shall not unreasonably be withheld or delayed), the Company shall, and shall cause each of its Subsidiaries to, carry on its business in all material respects in the ordinary course and, to the extent consistent therewith, use all commercially reasonable efforts to preserve intact its current business organizations, keep available the services of its current officers, key employees and consultants and preserve its relationships with customers, suppliers, licensors, licensees, distributors and others having business dealings with it. In particular, the Company shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to keep separated the ISS Business from the rest of the business of the Company Scheduleand its Subsidiaries in all organizational and personnel-related respects, including but not limited to ensuring under German law that (x) no “joint establishment” of the ISS Business exists with any other entity or part of the business of the Company or its Subsidiaries, and (y) any existing joint establishment of the ISS Business with any other part of the business of the Company or its Subsidiaries is terminated or otherwise separated; provided, however, that nothing in this sentence shall require the Company to take any action that would be effective prior to the Acceptance Time to the extent that it would, in the Company’s reasonable judgment, interfere unreasonably with the business or operations of the Company. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time except as Parent's designees shall constitute a majority otherwise set forth in Section 5.01(a) of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner Disclosure Schedule as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted contemplated by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following not, and shall not permit its subsidiaries to do any of the following:
its Subsidiaries to, without Parent’s prior written consent (a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent which consent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);be withheld or delayed):
(di) Declare(A) declare, set aside or pay any dividends on on, or make any other distributions (whether in cash, stock, equity securities stock or property) in respect of, any of any its capital stock stock, other than dividends or distributions by a direct or indirect Subsidiary wholly owned by the Company to the Company or another directly or indirectly wholly owned Subsidiary of the Company in the ordinary course of business consistent with past practice, (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 any capital stock; provided that any shares of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their its capital stock in the ordinary course of business and consistent with past practices.
or (eC) Purchasepurchase, redeem or otherwise acquire, directly or indirectly, acquire any shares of its capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, other securities thereof or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any such shares or other securities, except for purchases, redemptions or other acquisitions of capital stock or other securities (1) required by the terms of the Company Stock Plans in effect as of the date of this Agreement or (2) required by the terms of any plans, arrangements or Contracts existing on the date of this Agreement between the Company or any of its Subsidiaries and any director or employee of the Company or any of its Subsidiaries (to the extent complete and accurate copies of which have been heretofore delivered to Parent);
(ii) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien any shares of such its capital stock stock, any other voting securities or any securities convertible into shares of capital stockinto, or enter into other agreements any rights, warrants or commitments of any character obligating it options to issue acquire, any such shares shares, voting securities or convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, including pursuant to Contracts as in effect on the date of this Agreement (other than (iA) the issuance, delivery and/or sale issuance of shares of Company Common Stock pursuant to upon the exercise of Company Stock Options therefor outstanding as of or in connection with the ESPP or other Company Stock-Based Awards, in each case in accordance with their terms on the date of this Agreement; or (B) grants required by the terms of any plans, arrangements or Contracts existing on the date of this Agreement between the Company or any of its Subsidiaries and any director or employee of the Company or any of its Subsidiaries (ii) to the grant extent complete and accurate copies of employee stock options, consistent with the Company's established past practice for similarly situated employees, which have been heretofore delivered to non-officer employees who are hired in accordance with Section 5.1((kParent));
(giii) Cause, permit amend or propose waive any amendments to its material provision in the Company Certificate of Incorporation, or the Company Bylaws or other comparable charter or organizational documents (or similar governing instruments of any of the Company’s Subsidiaries, except as may be required by applicable Law or the rules and regulations of the SEC or the Nasdaq Global Market, or, in the case of the Company, enter into any agreement with any of its subsidiaries)stockholders in their capacity as such;
(hiv) Acquire directly or agree to acquire indirectly acquire, (A) by merging or consolidating with, or by purchasing any equity interest in or a material substantial portion of the assets of, by making an investment in or capital contribution to, or by any other manner, any person or division, business or equity interest of any corporation, partnership, association person or other business organization (B) any material asset or division thereof orassets, except as permitted by Section 5.1((m)) or ((r))for capital expenditures, otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, shall be subject to the business limitations of the Company or enter into any joint venture, strategic partnership or allianceSection 5.01(a)(vii);
(iv) Sell(A) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or subject to any Lien or allow the expiration, abandonment or lapse or otherwise dispose of any of its material rights, properties or other material assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipmentany interests therein (including securitizations), or the license (B) enter into, modify or amend in a material respect any lease of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)material property;
(jvi) Incur(A) incur, create, assume or pre-pay otherwise become liable for, any indebtedness for borrowed money, money or guarantee any such indebtedness or obligation of another person, issue or sell any debt securities or calls, options, warrants, calls warrants or other rights to acquire any debt securitiessecurities of the Company or any of its Subsidiaries, guarantee any debt securities of another person, enter into any "“keep well" ” or other agreement Contract to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing (other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities short-term borrowings in the ordinary course of business), or (iiiB) as contemplated by this Agreement;
(k) Hire make any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt loans or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration advances to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entityperson, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary Subsidiary of the Company and the Company or another wholly-owned subsidiary Subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and of business consistent with past practice;
(rvii) Authorize or make capital expenditures beyond those provided in the Company's existing any new capital expenditure budget, or that are individually in excess of exceeding $100,000 individually or in the aggregate in excess of $500,000 in any calendar quarterthe aggregate, excluding employee compensation expenses that are capitalized;
(sviii) Materially accelerate except as required by Law or delay collection any final, nonappealable judgment by a court of competent jurisdiction, (A) pay, discharge, settle or satisfy any notes material claims, liabilities, obligations or accounts receivable in advance of litigation (absolute, accrued, asserted or beyond their regular due dates unasserted, contingent or otherwise) where the dates when uninsured amount to be paid is greater than $500,000, other than the same would have been collected payment, discharge, settlement or satisfaction in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond business or in advance accordance with their terms, of its due date liabilities disclosed, reflected or the date such liability would have been paid reserved against in the ordinary course Most Recent Balance Sheet (for amounts not in excess of business;
such reserves), (uB) Settle or compromise cancel any suits or claims or threatened suits or claims for payments in an aggregate amount material indebtedness in excess of $500,000100,000, (C) waive or assign any claims or rights of material value or (D) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms of this Agreement, knowingly fail to enforce, or consent to any material matter with respect to which consent is required under, any standstill or similar Contract to which the Company or any of its Subsidiaries is a party;
(vix) Make enter into any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as Contract that would be of a beneficiary or a loss payable payee or permit any such policy type referred to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this AgreementSection 4.01(j)(B);
(x) Increase the aggregate dollar value of inventory owned by distributors except in the first ordinary course of business consistent with past practice and second tiers of on terms not materially adverse to the Company and its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30Subsidiaries, 1998taken as a whole, enter into, modify, renew, amend or terminate any Contract or waive, release or assign or delegate any material rights or claims thereunder;
(xi) except (x) as required to ensure that any Benefit Plan is not then out of compliance with applicable Law or (y) Begin shipment to comply with any Benefit Plan or other Contract entered into prior to the date of this Agreement, (A) adopt, enter into, terminate or amend (1) any collective bargaining Contract or Benefit Plan or (2) any other Contract, plan or policy involving the Company or any of its Subsidiaries as applied to directors and executive officers of the Company (“Key Persons”), (B) increase in any manner the compensation, bonus or fringe or other benefits of, or pay any discretionary bonus of any new products to customerskind or amount whatsoever to, any current or former director, officer, employee or consultant, except in the ordinary course of business consistent with past practice to employees of the Company or its Subsidiaries other than Key Persons, (C) grant or pay any severance or termination pay or increase in any material manner the severance or termination pay of, any current or former director, officer, employee or consultant of the Company or any of its Subsidiaries, except as disclosed in Section 5.01(a) of the Company Disclosure Schedule and for alpha versions and not more grants, payments or increases in severance or termination pay in the ordinary course of business consistent with past practice to current or former directors, officers, employees or consultants of the Company or any of its Subsidiaries, other than 50 beta versions Key Persons, (D) remove any existing restrictive covenants in any Benefit Plans or awards made thereunder, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan, (F) take any action to accelerate the vesting or payment of any product delivered compensation or benefit under any Benefit Plan or awards made thereunder other than as a result of the consummation of the transactions contemplated in this Agreement pursuant to customers solely the terms of any Benefit Plan or awards made thereunder as in effect prior to the date of this Agreement, or (G) grant any equity or equity-based awards;
(xii) except as required by GAAP, revalue any material assets of the Company or any of its Subsidiaries or make any material change in financial accounting methods, principles or practices;
(xiii) except as required by Law, the Company will not (A) make or change any material tax election, (B) settle or compromise any tax audit or any proceeding with respect to any material tax claim or assessment relating to the Company or any of its Subsidiaries, (C) file any amended tax return, (D) adopt or change any accounting method with respect to taxes (except as required to comply with GAAP), (E) enter into any closing agreement with respect to taxes, (F) file or surrender any claim for evaluation purposesa refund of taxes, or (G) consent to any extension or waiver of the limitation period applicable to any tax claim or assessment relating to the Company or any of its Subsidiaries, in each case, that is reasonably likely to result in an increase to a tax liability, which increase is material to the Company and its Subsidiaries, taken as a whole;
(xiv) enter into any line of business outside of its existing business;
(xv) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of such entity (other than among wholly-owned Subsidiaries); or
(zxvi) Agree in writing authorize any of, or otherwise commit, resolve, propose or agree to take any of of, the actions described in Section 5.1(a) through (y) aboveforegoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Greenfield Online Inc), Merger Agreement (Microsoft Corp)
Conduct of Business by the Company. Except as contemplated specifically provided ---------------------------------- by this Agreement or as set forth in Section 5.1 of (including without limitation the Company Scheduleactions contemplated by Schedule 4.1(i) hereto), during the period from the date of this Agreement and --------------- continuing until the earlier of the termination of this Agreement pursuant to its terms, terms or the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, due subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in Part 4 of the Company Disclosure Schedule, without the prior written consent of Parent, during such periodthe period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Scheduleplans;
(b) Grant any severance or termination pay (whether in cash, equity- based or otherwise) to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in the Company Schedulewriting or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property patent rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)practice;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service employment relationship with any employee, director or consultant employee pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber encumber, any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale issuance of shares of the Company Common Stock pursuant to the exercise of Options stock options therefor outstanding as of the date of this Agreement, Agreement and (ii) issuance of shares of the grant of employee stock options, consistent with Company Common Stock to participants in the Company's established past practice for similarly situated employees, Company Purchase Plan pursuant to non-officer employees who are hired in accordance with Section 5.1((k))the terms thereof;
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof orthereof, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any material joint ventureventures, strategic partnership partnerships or alliancealliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except (i) sales of inventory and used equipment, or the license of the Company's products equipment in the ordinary course of business consistent with past practice practice, (it being agreed that Parent shall not unreasonably withhold consent to any ii) disposition of assets and other actions as set forth on Schedule 4.1(i) hereto in the manner --------------- set forth therein, and (iii) the granting of non-exclusive license agreement related to licenses in the Company's enterprise ordinary course of business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)consistent with past practice;
(j) Incur, assume or pre-pay Incur any indebtedness for borrowed money, money or guarantee any such indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securitiessecurities of the Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, practice or (ii) pursuant to existing credit facilities or equipment leasing arrangements in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee benefit plan or employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee director or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentemployee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(l) Make or change any Tax election, settle or compromise any material Tax liability, or consent to any extension or waiver of any limitations period with respect to Taxes.
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modifyModify, amend or terminate any Company Contract or other material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(on) Enter into, amend or extend into any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, Company other than in the ordinary course of business consistent with past practice;
(o) Enter into any licensing, distribution, sponsorship, advertising, merchant program or similar contracts, agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by obligations other than in the Company for convenience on not more than 60 days' noticeordinary course of business consistent with past practice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SECGAAP, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make Take any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses action (including expenses related to business travelany action by its Board of Directors) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in cause the Company's existing capital expenditure budget, or that are individually representation set forth in excess of $100,000 or in the aggregate in excess of $500,000 Section 2.22 hereof to be untrue in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesrespect; or
(zr) Agree in writing or otherwise to take any of the actions described in Section 5.1(a(a) through (yq) above.
Appears in 2 contracts
Samples: Merger Agreement (Extended Systems Inc), Merger Agreement (Palm Inc)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the (a) The Company Schedule, during the period from the date of this Agreement hereby covenants and continuing until agrees with Parent that prior to the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or (1) such time as Parent's designees shall of Parent first constitute a majority of the Company BoardBoard pursuant to Section 1.04 and (2) the Effective Time, unless the prior written consent of Parent shall have been obtained (such consent not to be unreasonably withheld, delayed or conditioned) and except as expressly permitted by this Agreement, it will and it will cause each of the Company and each of Subsidiaries to (i) operate its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, business only in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts course consistent with past practices and policies to (iii) use reasonable best efforts to: (A) preserve intact its present business organizationorganization and assets, maintain its material rights and franchises, and maintain its relationships with material customers, suppliers contractors, distributors, licensees, licensors and others having material business dealings with it; (iiB) maintain and keep its material properties in as good repair and condition as at present, ordinary wear and tear excepted; (C) keep in full force and effect insurance and bonds comparable in amount and scope of coverage to that now maintained by it; (D) comply with and perform in all material respects all obligations and duties imposed upon it by all applicable Laws; and (E) keep available the services of its present officers current officers, employees and employeesconsultants.
(b) Without limiting the generality of the foregoing Section 5.01(a), prior to the earlier of (x) such time as designees of Parent first constitute a majority of the Company Board pursuant to Section 1.04 and (iiiy) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In additionthe Effective Time, except (1) as permitted by the terms of this Agreement, and except as provided set forth in the Company ScheduleDisclosure Schedule at Section 5.01(b), without (2) as required by applicable Law, (3) as expressly permitted by this Agreement and (4) with the prior written consent of ParentParent (such consent not to be unreasonably withheld, during such perioddelayed or conditioned), the Company shall not do do, or permit any of the following and shall not permit its subsidiaries Company Subsidiaries to do do, any of the following:
(ai) Waive any stock repurchase rights, accelerate, amend or change the period Organizational Documents of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Scheduleor any Company Subsidiary;
(bii) Grant transfer, lease, license, sell, exchange or swap, mortgage, pledge, dispose of, encumber, abandon or fail to maintain any severance part of the assets or termination pay to any officer capital stock, businesses or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in properties of the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in Subsidiary outside the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)business;
(diii) Declaredeclare, set aside for payment or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any of its capital stock, whether payable in cash, stock or property, except for cash dividends by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary;
(iv) split, combine, subdivide or reclassify any of its capital stock or split, combine or reclassify any capital stock other equity interests or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any shares of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their its capital stock in the ordinary course of business and consistent with past practices.or other equity interests;
(ev) Purchaserepurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)other equity interests;
(fvi) Issuedirectly or indirectly, issue, deliver, grant, sell, authorizetransfer, encumber, pledge or otherwise encumber dispose of, or authorize or propose the issuance, delivery, grant, sale, transfer, encumbrance, pledge or disposition of, any shares of the its capital stock of the Company or any of its subsidiaries, other equity interests or any securities convertible into into, exchangeable for or evidencing the right to subscribe for any such shares of such its capital stockstock or other equity interests, or subscriptions, any rights, warrants warrants, options or options any other agreements of any character to acquire any shares of such capital stock or any securities convertible into shares of capital stockshares, or enter into other agreements or commitments of any character obligating it to issue any such shares equity interests or convertible or exchangeable securities, other than (i) than, with respect to the issuanceCompany, delivery and/or sale the issuance of shares of Company Common Stock pursuant to upon the exercise of Options therefor Company Stock Rights outstanding as of the date of this Agreement, and (ii) Agreement under the grant of employee stock options, consistent with Company Stock Plans or pursuant to the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k))Current Offering under the ESPP;
(gvii) Causeadjust or otherwise modify any of the Company Stock Rights, permit the Company Stock Plans or propose any amendments the ESPP, other than as expressly contemplated by Section 2.14;
(viii) (A) change the compensation or benefits payable or to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of become payable to any of its subsidiaries);
(h) Acquire officers, directors, employees or agree consultants, other than annual salary increases to acquire by merging or consolidating withbe effective as of April 1, or by purchasing any equity interest in or a material portion of 2011 to employees below the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products executive officer level in the ordinary course of business consistent with past practice and not to exceed 3.5% of current base salaries; (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(jB) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" plan, program, arrangement or other agreement to maintain any financial statement condition that would otherwise constitute an Employee Benefit Plan or enter into any arrangement having the economic effect of collective bargaining agreement or extend or amend any, collective bargaining agreement or consulting agreement; (C) make any loans to any of the foregoing its officers, directors, employees, consultants or affiliates (other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant travel advances or other advances to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired employees made in the ordinary course of business consistent with past practice) or change its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise; or (D) take any action to terminate or amend any of the New Employment Agreements or waive any provision thereof;
(lA) Adopt pay or amend arrange for payment of any pension, retirement allowance or other employee stock purchase or employee stock option benefit pursuant to any existing plan, agreement or adopt arrangement to any officer, director, employee or amend affiliate or pay or make any material employee benefit planarrangement for payment to any officers, directors, employees or enter into affiliates of the Company of any employment contract or collective bargaining agreement (other than offer letters amount relating to unused vacation days, except payments and letter agreements entered into accruals made in the ordinary course of business consistent with past practice practice; (B) except as may be required pursuant to the terms of an Employee Benefit Plan as in effect as of the date of this Agreement, adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with employees who are terminable "at will"), pay any special bonus or special remuneration to for the benefit of any director, employee officer or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentemployee, whether past or increase the salaries present; or wage rates or fringe benefits (including rights to severance or indemnificationC) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change amend in any material respect any management policies or proceduresEmployee Benefit Plan in effect as of the date of this Agreement;
(mx) Make any payments outside adopt a plan of the ordinary course complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waiveof the Company Subsidiaries, release or assign any material rights or claims thereunderother than the Merger;
(oxi) Enter into(A) incur or assume any indebtedness or issue any debt securities; (B) assume, amend guarantee, endorse or extend otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
Person; (pC) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person Person (other than travel advances or entityother advances to employees made in the ordinary course of business consistent with past practice); or (D) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any equity interest therein, except in the case of clauses (A) and (C) for loansany such transactions between or among the Company and the Company Subsidiaries;
(xii) (A) modify, advancesextend, capital contributions amend, terminate, cancel, renew or investments between supplement any wholly-owned subsidiary Material Contract or any Change in Control Contract; (B) waive, release or assign any rights or Claims under any such Material Contracts or Change in Control Contracts; or (C) enter into any Material Contract or Change in Control Contract;
(xiii) except as necessary to operate in the ordinary course consistent with past practices, grant or acquire, agree to grant to or acquire from any Person, or dispose of or voluntarily permit to lapse any rights to, any material Intellectual Property, or disclose or agree to disclose to any Person, other than Representatives of Parent and MergerSub, any Trade Secret;
(xiv) (A) change any of the accounting methods used by it except for such changes required by GAAP or (B) make any material new Tax election or change any material Tax election already made, adopt any material new Tax accounting method, change any material Tax accounting method, amend any U.S. federal income or other material Tax Return, forgo any material Tax refund, enter into any closing agreement or private letter ruling or settle any material Claim or assessment relating to Taxes or consent to any material Claim or assessment relating to Taxes or any waiver of the statute of limitations for any such Claim or assessment;
(xv) pay, discharge or satisfy any material Liabilities (whether absolute, accrued, contingent or otherwise), other than the payment, discharge or satisfaction of any such Liabilities in the ordinary course of business consistent with past practice, or of Liabilities reflected or reserved against in the consolidated financial statements of the Company and the Company Subsidiaries included in the Filed Company SEC Documents for the period ended December 31, 2010 or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees incurred since December 31, 2010 in the ordinary course and of business consistent with past practice;
(rxvi) Authorize (A) settle or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, commence any Claim or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in litigation involving an aggregate amount in excess of $500,00050,000 or, in the aggregate, an amount in excess of $250,000 or (B) enter into any consent decree, injunction or other similar restraint or form of equitable relief in settlement of any Claim or litigation;
(vxvii) Make make any tax election capital expenditure or any commitment with respect to media or advertising (other than ordinary course payments or allowances to customers for co-op advertising) which is not required by law or settle or compromise any in all material tax liability;
respects in accordance with the annual budget for the fiscal year 2011 (w) Cancel or terminate any material insurance policy naming it as which expenditures shall not be accelerated inconsistent with past practice), a beneficiary or a loss payable payee or permit any such policy correct and complete copy of which is attached to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this AgreementDisclosure Schedule at Section 5.01(b)(xvii);
(xxviii) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30enter into any agreement, 1998;
(y) Begin shipment of Contract or arrangement or make any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise commitment to take any of the actions described in prohibited by this Section 5.1(a) through (y) above5.01.
Appears in 2 contracts
Samples: Merger Agreement (Galaxy Dream Corp), Merger Agreement (Rc2 Corp)
Conduct of Business by the Company. Except as contemplated by this Agreement or as (A) for matters set forth in Section 5.1 5.01(a) of the Company ScheduleDisclosure Letter or otherwise expressly contemplated or required by this Agreement, during (B) as required by a Governmental Entity or by applicable Law, (C) as contemplated by (i) with respect to 2024, the period 2024 annual operating budget set forth on Section 5.01(a)(C)(i) of the Company Disclosure Letter and (ii) with respect to 2025, the 2025 Company forecast set forth on Section 5.01(a)(C)(ii) of the Company Disclosure Letter (the foregoing clauses (i) and (ii), collectively, the “Budget”) or (D) with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent and shall otherwise consent in writingcause each Company Subsidiary to, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organizationto, (iiu) keep available the services of conduct its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business in all material respects (which shall be deemed to include taking or refraining to take actions as and to the extent the Company or the Company Subsidiaries reasonably believe necessary or appropriate in response to any epidemic, pandemic or disease outbreak (including the COVID-19 virus)); provided that prior to taking any such action in response to the foregoing, to the extent reasonably practicable, the Company reasonably consults with Parent and considers in good faith any recommendations of Parent in respect thereto, (v) operate the Company in accordance with the Budget in all material respects, (w) preserve intact, in all material respects and consistent with past practice practice, its business organization, goodwill and existing relationships with employees (it being agreed that Parent shall not unreasonably withhold consent to including the Specified Employees), customers, suppliers (including any non-exclusive license agreement related to the Company's enterprise business power providers), joint venture partners, lenders, landlords and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of Person having a business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant Subsidiaries that is material to the exercise Company, and Governmental Entities, (x) maintain in effect all material existing Permits necessary for the conduct of Options therefor outstanding its business and to timely submit renewal applications (as of the date of this Agreementapplicable), and (iiy) the grant of employee stock optionssatisfy obligations as necessary to maintain in good standing material development projects and opportunities (such as paying deposits, consistent with the Company's established past practice for similarly situated employeestimely submitting required information, and otherwise continuing to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)pursue generation and transmission development opportunities), otherwise acquire or agree subject to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consentSection 5.01(b);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) above.
Appears in 2 contracts
Samples: Merger Agreement (Allete Inc), Merger Agreement (Allete Inc)
Conduct of Business by the Company. Except as otherwise expressly contemplated by this Agreement or Agreement, as required by applicable Legal Requirements, as set forth in Section 5.1 4.1 of the Company ScheduleDisclosure Letter or as consented to in writing by the Parent (which consent or denial of such request for consent shall not be unreasonably delayed), during the period from the date of this Agreement and continuing until to the earlier to occur of the Effective Time or termination of this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company BoardArticle 7, the Company and each of its subsidiaries shall, except to the extent that Parent and shall otherwise consent in writingcause its Subsidiaries to, carry on its business, their respective businesses in all material respects, respects in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted course consistent with past practice and in compliance in all material respects with all applicable laws and regulationsLegal Requirements, pay its material debts and taxes Taxes when due, due (subject to good faith disputes over such debts or taxesTaxes), pay or perform other material obligations when due, subject and, to good faith disputes over such obligationsthe extent consistent therewith, and use its commercially reasonable efforts consistent with past practices and policies to (ix) preserve intact its present their current business organizationorganizations, (iiy) keep available the services of its present their current officers and employees, key employees and (iiiz) preserve its their relationships with customersthose Persons having business dealings with them, suppliersin each case to the end that their goodwill and ongoing businesses shall not be impaired in any material respect. Without limiting the generality of the foregoing, distributors, licensors, licensees, and others with which it has business dealings. In additionduring the period from the date of this Agreement to the earlier to occur of the Effective Time or termination of this Agreement pursuant to Article 7, except as permitted otherwise expressly contemplated by the terms of this Agreement, and except as provided in set forth on Section 4.1 of the Company ScheduleDisclosure Letter, without as required by applicable Legal Requirements, or as consented to in writing by the prior written Parent (which consent or denial of Parent, during such periodrequest for consent shall not be unreasonably delayed), the Company shall not do any of the following not, and shall not permit its subsidiaries to do any of the followingits Subsidiaries to:
(a) Waive any stock repurchase rights, accelerate, (other than in accordance with written agreements outstanding on the date hereof and disclosed on Section 2.3 or 2.11(b) of the Company Disclosure Letter), amend or change the period of exercisability of options or restricted stockany Company Share Option, or reprice options granted under any employee, consultant, director or other stock plans Company Share Option or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstandingCompany Share Option, or policies existing, on allow any new offering period to begin under the date hereof and disclosed in the Company ScheduleESPP;
(bi) Grant any severance or termination pay to any officer officer, employee or employee consultant, except pursuant to written agreements outstandingEmployment Agreements existing, or written policies existing, on the date hereof and disclosed included in Section 2.11(b)(ii) of the Company ScheduleDisclosure Letter, or as required by applicable Legal Requirements; or (ii) adopt any new severance plan, agreement, custom, policy or arrangement or amend or modify or alter in any manner any severance plan, agreement, custom, policy or arrangement existing on the date hereof, or (iii) grant any equity based compensation, whether payable in cash or shares, including any Company Share Options, except (x) pursuant to written Employment Agreements existing on the date hereof and included in Section 2.11(b)(ii) of the Company Disclosure Letter; and (y) the issuance of Company Shares upon exercise of vested Company Share Options and as permitted pursuant to Section 4.1(f);
(c) Transfer or license to any person or entity third Person or otherwise extend, amend or modify in any material respect any rights of any third Person to the Company Intellectual Property, including Company Registered Intellectual Property Rights or any other Intellectual Property Rights that are used or held for use in the business of the Company, or enter into grants any agreements or make other commitments or arrangements to grant, transfer or license to any Person future patent, copyright or other intellectual property rightsIntellectual Property Rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed practices; provided that Parent shall not unreasonably withhold consent to any such non-exclusive license agreement related providing for aggregate committed or reasonably expected consideration in excess of $500,000 over the term of such license shall require prior written notice to the Parent and provided, further, that in no event, despite the Company's enterprise ’s past practices, shall the Company or any Subsidiary of the Company: (i) license on an exclusive basis or sell or otherwise transfer (including any joint ownership interests), or offer to so exclusively license or sell (or otherwise transfer (including any joint ownership interests), any Company Intellectual Property or any other Intellectual Property Rights that are used or held for use in the business and that Parent's failure of the Company, including Company Registered Intellectual Property; or (ii) enter into any agreement limiting the right of the Surviving Company or any of its Subsidiaries to reasonably object engage in any line of business or to compete with any Person; (iii) grant “most favored nation” status or similar preferential terms to any such Person; (iv) enter into any agreement within five or arrangement limiting the right of the Surviving Company or any of its Subsidiaries to use, sell, license, assign, transfer, convey, dispose of, or otherwise commercially exploit or enforce (including any non-asserts) the Company Intellectual Property or any other Intellectual Property Rights that are used or held for use in the business days of the Company, including without limitation Company Registered Intellectual Property; or (v) enter into any request for consent shall constitute such consent);agreement or arrangement containing any provision requiring or purporting to require the Parent to grant to any third party any right to any Intellectual Property Right owned by, or licensed to, the Parent.
(d) DeclareExcept for the Cash Distribution to be made pursuant to Section 5.12(a), declare, set aside or pay any dividends on or make any other distributions (whether in cash, stockshares, equity securities or property) in respect of any share capital stock (other than to the Company or any wholly-owned subsidiary of the Company) or split, combine or reclassify any shares of capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.share capital;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of share capital stock of the Company or its subsidiariesSubsidiaries or any options, warrants, calls or rights to acquire any such shares, except repurchases in connection with (i) withholding to satisfy tax obligations with respect to Company Share Options, (ii) acquisitions without the payment of unvested shares at cost any consideration in connection with the termination forfeiture of equity awards or (iii) acquisitions in connection with the service relationship with any employeecashless exercise of Company Share Options, director or consultant pursuant in each case subject to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)applicable Legal Requirements;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber (or propose any shares of the foregoing with respect to) any share capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stockor exercisable or exchangeable for share capital, or subscriptions, rights, warrants or options to acquire any shares of such share capital stock or any securities convertible into shares of capital stockshare capital, or enter into other agreements or commitments Contracts of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or and sale of shares of Company Common Stock Shares pursuant to the exercise of Company Share Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, Cause or permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents the Company Charter Documents (or similar governing instruments of any of its subsidiariesSubsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization Person or division thereof orthereof, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire all or substantially all of the assets of any of the foregoing, enter into any joint ventures, strategic partnerships or similar alliances or form or agree to form any Subsidiaries;
(i) Sell, lease, license, encumber, convey, assign, sublicense or otherwise dispose of or transfer any properties or assets or any interest therein (other than through licensing permitted by clause (c)), other than the sale, lease or disposition of property or assets which are not material, individually or in the aggregate, to the business of the Company and its Subsidiaries taken as a whole in the ordinary course of business consistent with past practice; (ii) modify, amend or enter into terminate any joint ventureexisting Contract affecting the use, strategic partnership possession or alliance;
(i) Sell, lease, license, encumber or otherwise dispose operation of any properties or assets, other than the modification, amendment or termination of Contracts affecting the use, possession or operation of property or assets which are not material, individually or in the aggregate, to the business of the Company, except sales of inventory Company and used equipment, its Subsidiaries taken as a whole; or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold iii) grant or otherwise create or consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days creation of any request for consent shall constitute such consent)Lien, other than Permitted Liens, affecting any owned or leased real property or any part thereof;
(ji) Incur, assume or pre-pay Incur any indebtedness for borrowed money, money or guarantee any such indebtedness or obligation of another personPerson, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securitiessecurities of the Company or any of its Subsidiaries, enter into any "“keep well" ” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, ; or (ii) pursuant make any loans, advances or capital contributions to existing credit facilities in any Person (other than the ordinary course Company or any of business, or (iii) as contemplated by this Agreement;
(k) Hire any employeeits Subsidiaries), except replacements for former non-officer employeesdeposits, hired prepayments and other credits to suppliers or accounts receivable, prepaid royalties or notes receivable from customers, in each case made in the ordinary course of business consistent with past practice;
(lk) (i) Adopt or amend any employee stock purchase Employment Agreement or employee stock option planCompany Employee Plan, or adopt or amend any material employee benefit plan, except as may be required by applicable Legal Requirements; or enter into any employment contract Contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "“at will",” except as may be required by Legal Requirements, and who are not officers of the Company or any Subsidiary of the Company), ; (ii) commit to or agree to pay or pay any special bonus or special remuneration to any directordirector or employee except, in each case, as may be required by any existing employee benefit plan, policy, arrangement, program or consultant except pursuant to written agreements outstanding on the date hereof and previously Contract disclosed in writing Section 2.11(b) of the Company Disclosure Letter; (iii) commit to Parent, increase or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants except, in each case, as may be required by applicable Legal Requirements or by any existing employee benefit plan, policy, arrangement, program or Contract disclosed on Section 2.11(b) of the Company Disclosure Letter, or change or break with any material past customs or unwritten policies of the Company with respect to benefits not required by law with respect to its employees, including by way of example only, payment of severance pay in Israel under circumstances in which it is not legally required; (iv) take any action to accelerate the vesting or payment, or fund or any other way secure payment of compensation or benefits under any Company Employee Plans, to the extent not already provided in such plans disclosed on Section 2.11(b) of the Company Disclosure Letter; (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Employee Plan or 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 (vi) forgive any loans to any of its directors, officers or employees;
(l) (i) Pay, discharge, or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than normal periodic salary increases for non-officer employees made the payment, discharge or satisfaction, in the ordinary course of business, business consistent with past practicepractice or in accordance with their terms in existence as of the date hereof; (ii) waive the benefits of, or change agree to modify in any material respect manner, terminate, release any management policies Person from or procedures;
(m) Make knowingly fail to enforce any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of businessconfidentiality, modify, amend standstill or terminate any material contract or agreement similar Contract to which the Company or any subsidiary thereof of its Subsidiaries is a party or of which the Company or any of its Subsidiaries is a beneficiary; or (iii) settle any litigation (whether or not commenced prior to the date of this Agreement) other than a settlement reimbursable from insurance or calling solely for a cash payment in an aggregate amount less than $100,000 and in any case including a full release of the Company and its affiliates, as applicable;
(m) Modify or amend, or terminate, any material Company Contract, or waive, release or assign any material rights or claims thereunder;
(on) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue Revalue any of its assets (other than including writing down the booking value of reserves in the ordinary course of business and consistent with past practicescapitalized inventory or writing off notes or accounts receivable) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practicespractices except (i) as required by GAAP or by any Governmental Entity or the Financial Accounting Standards Board (or similar organization), or (ii) as required by change in applicable Legal Requirements;
(i) Hire any employee at or above the director level; (ii) increase the net number of employees of the Company and its Subsidiaries (taken as a whole by more than 15 engineering or marketing employees or by more than 3 non-engineering or marketing employees; or (iii) intentionally cause or encourage more than a 2% reduction or intention to terminate employment in its engineering and/or marketing departments;
(p) Other than (i) fees and expenses payable to Xxxxxx Brothers pursuant to the engagement letter referred to in Section 2.16 and (ii) fees and expenses payable to legal, accounting and other professional service advisors on the terms disclosed in Section 4.1(p) of the Company Disclosure Letter, make any individual or series of related payments outside of the ordinary course of business (including inventory payments to legal, accounting practicesor other professional service advisors) in excess of $200,000 in the aggregate;
(q) Make Enter into any loans, advances new Contract or capital contributions to, series of related Contracts (other than any extension or investments in, renewal of any existing Contract on substantially similar terms as the Contract being extended or renewed) requiring the Company or any of its Subsidiaries to pay in excess of $50,000 over the term of such Contract or series of related Contracts or any other person or entityContract that would otherwise be material to the Company, except for loans, advances, capital contributions as otherwise permitted by any of the other paragraphs of this Section 4.1 or investments between any wholly-owned subsidiary as contemplated (both as to timing and amount) by the general expense expenditure budget referred to in Section 4.1(q) of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practiceDisclosure Letter;
(r) Authorize Make any material Tax election inconsistent with existing Tax elections, agree to pay, settle or make capital expenditures beyond those provided in the Company's existing capital expenditure budgetcompromise any material Tax liability or consent to any extension or waiver of any limitation period with respect to Taxes, or that are individually in excess of $100,000 request, negotiate or in agree to any material Tax ruling or any Tax ruling related to or which could reasonably be expected to delay the aggregate in excess of $500,000 in Transactions (or assist any calendar quartershareholder doing so) other than the Israeli Tax Rulings;
(s) Materially accelerate apply for or delay collection of receive any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of businessGrant;
(t) Materially delay or accelerate payment make any capital expenditures except as contemplated (both as to timing and amount) by the capital expenditure budgets referred to in Section 4.1(t) of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;Company Disclosure Letter; or
(u) Settle Commit or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree agree in writing or otherwise to take any of the actions described in Section 5.1(a4.1(a) through (y) abovet).
Appears in 2 contracts
Samples: Merger Agreement (Saifun Semiconductors Ltd.), Merger Agreement (Saifun Semiconductors Ltd.)
Conduct of Business by the Company. Except as contemplated by Pending the Merger. From the date of this Agreement until the Effective Time, unless Parent shall otherwise consent in writing, or except as set forth in Section 5.1 of the Company Schedule, during the period from the date of Disclosure Letter or as otherwise expressly provided for in this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its termsAgreement, the Effective TimeCompany shall, or such time as Parent's designees and shall constitute a majority cause each of the Company BoardSubsidiaries to, the Company and each of conduct its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, business in the usual, regular ordinary course consistent with past practice and ordinary course, in substantially the same manner as heretofore conducted and in compliance in shall use all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organizationorganization and goodwill and any material relationships with customers, (ii) suppliers and others having business dealings with it and to keep available the services of its present current officers and employeeskey employees on terms and conditions substantially comparable to those currently in effect and maintain its current rights and franchises, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by subject to the terms of this Agreement. In addition to and without limiting the generality of the foregoing, and except as provided expressly set forth in Section 5.1 of the Company ScheduleDisclosure Letter or as otherwise expressly permitted by or provided for in this Agreement, from the date hereof until the Effective Time, without the prior written consent of Parent, during such period, the Company shall not do any of the following not, and shall not permit its subsidiaries to do any of the followingCompany Subsidiary to:
(a) Waive adopt or propose any stock repurchase rightschange in its charter, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director by-laws or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedulecomparable organizational documents;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(ci) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declaredeclare, set aside aside, make or pay any dividends on dividend or make any other distributions distribution (whether in cash, stock, equity securities stock or property) in respect of any of its capital stock stock, except for dividends or distributions by wholly owned Company Subsidiaries, (ii) split, combine or reclassify any of its capital stock or issue or propose or authorize the issuance of any other securities (including options, warrants or any similar security exercisable for, or convertible into, such other security) in respect of, in lieu of of, or in substitution for any for, shares of its capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(eiii) Purchaserepurchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber acquire any shares of the capital stock of the Company or any of its subsidiariesCompany Subsidiary, or any securities convertible into shares of such capital stock, other equity interests or subscriptions, any rights, warrants or options to acquire any such shares or interests;
(c) issue, sell, grant, pledge or otherwise encumber any shares of its capital stock or other securities (including any options, warrants or any similar security exercisable for, or convertible into, such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securitiessimilar security), other than (i) the issuance, delivery and/or sale of shares issuances of Company Common Stock pursuant to upon the exercise of Company Stock Options therefor outstanding as or settlement of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired Company Restricted Stock Units in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practicetheir present terms, (ii) pursuant issuances by a wholly owned Company Subsidiary of capital stock to existing credit facilities in the ordinary course of businesssuch Company Subsidiary’s parent or another wholly owned Company Subsidiary, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former nonissuances or grants of equity-officer employees, hired based awards to new hires in the ordinary course of business consistent with past practice;
(ld) Adopt merge or amend consolidate with any employee stock purchase other Person or employee stock option planacquire a material amount of the assets or equity of any other Person;
(e) sell, or adopt or amend any material employee benefit planlease, or enter into any employment contract or collective bargaining agreement (license, subject to a Lien, other than offer letters and letter a Permitted Lien, encumber or otherwise surrender, relinquish or dispose of any assets, property or rights (including capital stock of a Company Subsidiary) except (i) non-exclusive licenses to use Company Intellectual Property granted in connection with agreements with content suppliers or device manufacturers entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will")practice, pay any special bonus or special remuneration to any director, employee or consultant except (ii) pursuant to existing written agreements outstanding on contracts or commitments set forth in Section 5.1(d) of the date hereof and previously disclosed in writing to ParentCompany Disclosure Letter, or increase the salaries (iii) in an amount not in excess of $25,000 individually or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made $100,000 in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or proceduresaggregate;
(mf) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(ni) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entityPerson, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and other than by the Company or another wholly-owned subsidiary of the any Company and advances of business related expenses (including expenses related Subsidiary to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate Company or any wholly owned Company Subsidiary, (ii) create, incur, guarantee or assume any Indebtedness, issuances of debt securities, guarantees, loans or advances not in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect existence as of the date of this Agreement), or (iii) other than as set forth in Section 5.1 of the Company Disclosure Letter, make or commit to make any capital expenditure;
(xg) Increase amend or otherwise modify benefits under any Company Benefit Plan, accelerate the aggregate dollar value payment or vesting of inventory owned by distributors benefits or amounts payable or to become payable under any Company Benefit Plan as currently in effect on the first and second tiers date hereof, fail to make any required contribution to any Company Benefit Plan, merge or transfer any Company Benefit Plan or the assets or liabilities of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have any Company Benefit Plan, change the right to return) above the aggregate value sponsor of such inventory at June 30any Company Benefit Plan, 1998or terminate or establish any Company Benefit Plan;
(yh) Begin shipment grant any increase in the compensation, bonus or other benefits of directors, officers, employees, consultants, representatives or agents of the Company or any Company Subsidiary;
(i) enter into or amend or modify any severance, consulting, retention or employment agreement, plan, program or arrangement;
(j) hire or terminate the employment or contractual relationship of any officer, employee, consultant, representative or agent of the Company or any Company Subsidiary, as the case may be, other than hirings or terminations that, individually and in the aggregate, are not material to the Company or such Company Subsidiary;
(k) settle or compromise any material action, suit, claim, proceeding, arbitration, investigation, audit or controversy (each, a “Proceeding”) or enter into any consent decree, injunction or similar restraint or form of equitable relief in settlement of any material Proceeding;
(l) (i) make or rescind any express or deemed election relating to Taxes, (ii) settle or compromise any Proceeding relating to Taxes, (iii) make a request for a written ruling of a Taxing Authority relating to Taxes, (iv) enter into a written and legally binding agreement with a Taxing Authority relating to Taxes, or (v) except as required by Law, change any of its methods of reporting income or deductions for federal or state income tax purposes from those employed in the preparation of its federal or state income tax returns for the taxable year ending December 31, 2006;
(m) other than in the ordinary course of business consistent with past practice, (i) modify or amend in any material respect or terminate any Company Contract, (ii) enter into any successor agreement to an expiring Company Contract that changes the terms of the expiring Company Contract in a way that is materially adverse to the Company or any Company Subsidiary taken as a whole, (iii) enter into any new products agreement that would have been considered a Company Contract if it were entered into at or prior to customersthe date hereof, (iv) modify or amend in any material respect any warranty applicable to any Company Product or (v) modify or amend in any material respect or terminate any privacy policy applicable to the Company or any Company Subsidiary;
(n) enter into or renew or extend any agreements or arrangements that limit or otherwise restrict the Company or any Company Subsidiary or any of their respective Affiliates or any successor thereto, or that could, after the Effective Time, limit or restrict Parent or any of its Affiliates (including the Surviving Corporation) or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(o) change any method of accounting or accounting principles or practices by the Company or any Company Subsidiary, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; orsuch change required by a change in GAAP;
(zp) Agree fail to file in writing a timely manner any Company SEC Document due after the date hereof;
(q) terminate, cancel, amend or otherwise modify any insurance policies maintained by it covering the Company or the Company Subsidiaries or their respective properties which is not replaced by a comparable amount of insurance coverage;
(r) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any Company Subsidiary, or form any new Company Subsidiary;
(s) take any actions or omit to take any actions that would or would be reasonably likely to (i) cause any of its representations and warranties herein to become untrue in any material respect, (ii) result in any of the actions described conditions to the consummation of the Merger set forth in Section 5.1(aArticle VII not being satisfied, or (iii) through materially impair the ability of the Company, Parent or Purchaser to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(yt) aboveabandon, dedicate to the public, convey title to or grant licenses under (other than in the ordinary course of business consistent with past practice) any Company Intellectual Property or any Trade Secret owned by the Company or any Company Subsidiary; or (u) agree or commit to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Amazon Com Inc), Merger Agreement (Audible Inc)
Conduct of Business by the Company. Except as contemplated by During the period from the date of this Agreement or until the Second Deferred Payment Date, except as set forth in Section 5.1 on Schedule 7.1 of the Disclosure Schedules, as consented to in writing in advance by the Stockholders or as otherwise permitted or required by this Section 7.1, the Buyer shall cause the Company Scheduleto carry on its business in the ordinary course of business and as currently proposed by the Company to be conducted prior to the Closing (including in respect of research, development, and clinical trial activities and programs) and carry on such business in compliance with all applicable Laws and, to the extent consistent therewith, use all commercially reasonable efforts to preserve intact its current business organizations, keep available the services of its current officers, employees, and consultants, and preserve its relationships with customers, suppliers, licensors, licensees, distributors, and others having business dealings with it with the intention that its goodwill and ongoing business shall be unimpaired as of the Second Deferred Payment Date. For the avoidance of doubt, this Section 7.1 shall not limit the Buyer or any of its Affiliates from engaging in any of the activities set forth below, or entering into any of the agreements set forth below; provided, however, that Buyer shall not sell, transfer or encumber the Common Stock. In addition to, and without limiting the generality of, the foregoing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In additionSecond Deferred Payment Date, except as permitted otherwise set forth on Schedule 7.1 of the Disclosure Schedules or as otherwise expressly required by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such periodthe Stockholders, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the followingnot:
(a) Waive any stock repurchase rights(i) declare, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declareaccrue, set aside or pay any dividends on on, or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or property or any combination thereof); (ii) 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 any shares of its capital stock; provided that (iii) enter into any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions contract with respect to their capital stock in the ordinary course voting of business and consistent with past practices.
its voting securities; or (eiv) Purchasepurchase, redeem or otherwise acquire, directly or indirectly, acquire any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)outstanding equity securities;
(fb) Issueissue, deliver, sell, authorize, sell or grant any voting securities or pledge or otherwise encumber or subject to any shares of the capital stock of the Company or lien any of its subsidiaries, voting securities or any securities convertible into shares of such capital stockinto, or subscriptions, any rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stockacquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than including pursuant to contracts as in effect on the date hereof;
(c) amend its certificate of incorporation or bylaws, except as may be required by Law;
(d) directly or indirectly acquire: (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any Person or division, business or equity interest of any corporationPerson; or (ii) any asset or assets that, partnershipindividually, association or other business organization or division thereof has a purchase price in excess of $[***] or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, have a purchase price in excess of $[***], except for new capital expenditures, which shall be subject to the business limitations of clause (h) below, and except for purchases of components, raw materials or supplies in the Company or enter into any joint venture, strategic partnership or allianceordinary course of business;
(e) (i) Sellsell, lease, license, encumber sell and leaseback or otherwise subject to any lien or otherwise dispose of any of its properties or other assets which are material(whether tangible or intangible) or any interests therein (including securitizations); or (ii) enter into, individually modify or in the aggregate, to the business amend any lease of the Company, except sales of inventory and used equipment, real property or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)personal property;
(jf) Incur, assume or pre-pay (i) incur any indebtedness for borrowed money, guarantee any indebtedness or obligation of another personindebtedness, issue or sell any debt securities or calls, options, warrants, calls warrants or other rights to acquire any debt securitiessecurities of the Company, guarantee any debt securities of another Person, enter into any "“keep well" ” or other agreement contract to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, foregoing; or (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practicePerson;
(rg) Authorize make any new capital expenditure or make capital expenditures, other than expenditures beyond those provided that individually are less than or equal to $[***] or, in the Company's existing capital expenditure budgetaggregate, are less than or that are individually in excess of equal to $100,000 or in the aggregate in excess of $500,000 in any calendar quarter[***];
(sh) Materially accelerate except as required by any Law or delay collection of for those capital expenditures permitted under Section 7.04(h): (i) pay, discharge, settle or satisfy any notes liabilities or accounts receivable action, other than current liabilities reflected on the balance sheet included in advance of or beyond their regular due dates or the dates when the same would have been collected Recent Financial Statements and current liabilities incurred in the ordinary course of businessbusiness since the date of the Recent Financial Statements; (ii) cancel any indebtedness; (iii) waive or assign any claims or rights; (iv) waive any benefits of, or agree to modify in any respect, or fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company is a party; or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract of the Company;
(ti) Materially delay initiate, launch or accelerate payment of commence any account payable beyond sale, marketing, distribution, co-promotion or any similar activity with respect to any new product (including products under development) in advance of its due date or outside the date such liability would have been paid in the ordinary course of businessUnited States;
(uj) Settle enter into any contract that would constitute a material contract or compromise amend, modify or consent to the termination of any suits material contract or the Company’s rights thereunder, or waive, release or assign any rights or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000thereunder;
(vk) Make enter into any tax election contract which shall not required terminate or be subject to termination for convenience, in each case, without cost, by law the Company upon notice of thirty (30) calendar days or settle or compromise any material tax liabilityless;
(wl) Cancel enter into, modify, amend or terminate any contract or waive, release, assign or fail to exercise or pursue any material insurance policy naming it as a beneficiary rights or a loss payable payee claims thereunder, which if so entered into, modified, amended, terminated, waived, released, assigned or permit not exercised or pursued would reasonably be expected to: (i) adversely affect in any such policy to lapse material respect the operations or condition (it being understood that financial or otherwise) of the Company; (ii) impair in any material respect the ability of the Company may renew to perform its obligations under this Agreement; or (iii) prevent or materially delay the consummation of the transactions contemplated by this Agreement;
(m) enter into any insurance policy contract to the extent consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement would reasonably be expected to conflict with, or result in effect a violation or breach of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to the loss of a benefit under, or result in the creation of any lien in or upon any of the properties or other assets of the Company under, or require the Company to license or transfer any Company Intellectual Property Rights or other material assets under, or give rise to any increased, additional, accelerated or guaranteed right or entitlements of any third party under, or result in any material alteration of, any provision of such contract;
(n) make any material changes to the Company’s hepatitis B project plan in place as of the date of this Agreement)Closing;
(xo) Increase use or disclose any Confidential Information (as hereinafter defined) except to carry out the aggregate dollar value business of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesCompany; or
(zp) Agree in writing authorize any of, or otherwise commit or agree to take any of the actions described in Section 5.1(a) through (y) aboveforegoing actions.
Appears in 2 contracts
Samples: Stock Purchase Agreement (TEKMIRA PHARMACEUTICALS Corp), Stock Purchase Agreement (TEKMIRA PHARMACEUTICALS Corp)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 4.1(a) of the Company ScheduleDisclosure Letter, as expressly contemplated or permitted by this Agreement, or as may be required by applicable law or the requirements of the NYSE (including any listing agreement with the NYSE), without the prior written consent of Parent (which consent will not be unreasonably withheld, delayed or conditioned), during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant hereof to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent and shall otherwise consent in writingcause its Subsidiaries to, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its their respective commercially reasonable efforts (i) to carry on their respective businesses in the ordinary course substantially consistent with past practices and policies to (i) preserve intact its present business organizationpractice, (ii) to preserve their assets and technology in accordance with present practices, ordinary wear and tear excepted and (iii) to keep available the services of its present their current officers and employees, key employees and (iii) preserve its their relationships with customers, suppliers, distributors, licensors, licensees, suppliers and others having significant business dealings with which it has business dealingsthem. In additionWithout limiting the generality of the foregoing, except as set forth in Section 4.1(a) of the Company Disclosure Letter, as consented to in writing by Parent (which consent will not be unreasonably withheld, delayed or conditioned) or as expressly contemplated or permitted by the terms of this Agreement, and except as provided in during the Company Schedule, without period from the prior written consent of Parent, during such perioddate hereof to the Effective Time, the Company shall not do any of the following not, and shall not permit its subsidiaries to do any of the followingits Subsidiaries to:
(ai) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(bA) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declaredeclare, set aside or pay any dividends on on, or make any other distributions (whether in cash, stock, equity securities shares or property) in respect of, any of its capital shares or other equity or voting interests except (1) for dividends by a direct or indirect wholly owned Subsidiary of the Company to its parent and (2) for regular quarterly cash dividends payable to the shareholders of the Company in an amount not to exceed $0.03 per share, (B) purchase, redeem or otherwise acquire any capital stock shares of, or other equity or voting interests in, the Company or its Subsidiaries or any options, warrants, calls or rights to acquire any such shares or other interests (other than issuances or grants of Company Common Shares pursuant to the exercise of Company Stock Options or warrants outstanding on such date as required by their terms as in effect on the date hereof) or (C) split, combine or reclassify any of its capital stock shares or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital shares or other equity or voting interests;
(ii) issue, deliver, sell, pledge or otherwise encumber any capital stock; provided Company Common Shares, any other equity or voting interests or any securities convertible into, or exchangeable for, or any options, warrants, calls or rights to acquire, any such shares, interests or securities or any share appreciation rights or other rights that any are linked to the price of the Company's whollyCompany Common Shares (other than (A) normal and off-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital cycle grants of Company SSARs and shares of restricted stock in the ordinary course of business and consistent with past practices.
(e) Purchasepractice; provided that such off-cycle grants shall not exceed, redeem or otherwise acquirein the aggregate, directly or indirectly, any 5,000 SSARs and 5,000 shares of capital restricted stock and that no such off-cycle grants are made to executive officers or directors of the Company or its subsidiariesSubsidiaries; provided, except repurchases further that such normal-cycle grants (other than grants pursuant to Directors’ compensation arrangements described in the Filed SEC Documents, which shall be made in accordance with such description) shall not exceed, in the aggregate, the total number of unvested SSARs and shares at cost of restricted stock granted on the normal-cycle grant date immediately preceding such grant; (B) the issuance of Company Common Shares upon the exercise of Company Stock Options, SSARs and other rights to acquire Company Common Shares described in connection Section 3.1(c) of this Agreement and Section 3.1(c) of the Company Disclosure Letter in accordance with the termination terms of the service relationship with any employeesuch Company Stock Options, director SSARs or consultant pursuant to stock option or purchase agreements other rights as in effect on the date hereof or as may be granted pursuant to subclause (which repurchases A) of this Section 4.1(a)(ii); (C) subject to Section 5.4(c), pursuant to rights to acquire shares of Company Common Shares issued under the current terms of any Employee Plan; or (D) the issuance of Company shall be obligated to effectuate if Common Shares in accordance with the repurchase price is less than terms of the Offer PriceConvertible Notes);
(fiii) Issue, deliver, sell, authorize, pledge amend its certificate of incorporation or otherwise encumber any shares of the capital stock of the Company by-laws (or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k)similar organizational documents);
(giv) Cause, permit directly or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire indirectly acquire or agree to acquire (A) by merging or consolidating with, or by purchasing any equity interest in all or a material substantial portion of the assets of, or by any other manner, any assets constituting a business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership association, limited liability company or alliance;
(i) Sell, lease, license, encumber other entity or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipmentdivision thereof, or the license of the Company's products any direct or indirect interest in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practiceforegoing, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) above.
Appears in 2 contracts
Samples: Merger Agreement (Edo Corp), Merger Agreement (Itt Corp)
Conduct of Business by the Company. Except as contemplated by During the period from the date of this Agreement or as set forth in Section 5.1 to the Effective Time, the Company shall, and shall cause each of the Company ScheduleSubsidiaries to, carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and, to the extent consistent therewith, use commercially reasonable efforts to preserve intact its current business organization, goodwill, ongoing businesses and its status as a REIT within the meaning of the Code. Without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except pursuant to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of ParentAAC, during such periodor as otherwise contemplated by this Agreement, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the followingnot:
(a) Waive any stock repurchase rights, accelerate, amend the Charter or change the period Bylaws of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Scheduleor the Company OP Partnership Agreement in any way that would be materially adverse to any holder of AAC Common Stock or AAC Preferred Stock or to any holder of AAC OP Units;
(b) Grant merge or consolidate, nor enter into any severance agreement to merge or termination pay to consolidate, with any officer Person, except that the Company may merge or employee except pursuant to written agreements outstandingconsolidate, or policies existingenter into an agreement to merge or consolidate, on the date hereof and disclosed in the with any Company Schedule, or adopt any new severance plan;Subsidiary; or
(c) Transfer or license to any person or entity or except as would not otherwise extendhave a Company Material Adverse Effect, amend or modify (i) change in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or manner any of its subsidiariesmethods, principles or any securities convertible into shares practices of such capital stockaccounting in effect at the Company Financial Statement Date, except as may be required by the SEC, applicable law or subscriptions, rights, warrants GAAP and with notice thereof to AAC or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock optionsmake or rescind any express or deemed election relating to taxes, consistent with the Company's established past practice for similarly situated employeessettle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof ortaxes, except as permitted by Section 5.1((m)) in the case of settlements or ((r)), otherwise acquire or agree compromises in an amount not to acquire any assets which are materialexceed, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment$30,000,000, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of change any of its directors, officers, employees methods of reporting income or consultants other than normal periodic salary increases deductions for non-officer employees made federal income tax purposes from those employed in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any preparation of its assets (other than federal income tax return for the booking of reserves in the ordinary course of business and consistent with past practices) ortaxable year ending December 31, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) above1997.
Appears in 2 contracts
Samples: Merger Agreement (United Dominion Realty Trust Inc), Merger Agreement (Lazard Freres Real Estate Investors LLC)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, terms or the Effective Time, or such time as Parent's designees shall constitute a majority Time of Merger I (the Company Board“Pre-Closing Period”), the Company and each of its subsidiaries shallagrees, except (i) as specifically provided in this Agreement or (ii) to the extent that Parent shall otherwise consent in writingwriting (the provision of a response to any request for such consent not to be unreasonably delayed or, with respect to subsections (d), (j) and (t) below, unreasonably withheld), to carry on its business, in all material respects, business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws laws, rules and regulations, to pay its debts and taxes Taxes when due, due subject to good faith disputes over such debts or taxesTaxes, to pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers officers, employees and employees, consultants and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, licensees and others with which it has business dealings. In additionaddition to and without limiting the generality of the foregoing, except (x) as permitted by the terms of this Agreement, and except as specifically provided in this Agreement or Article 4 of the Company Disclosure Schedule, without or (y) to the prior written extent that Parent shall otherwise consent in writing (the provision of Parenta response to any request for such consent not to be unreasonably delayed), during such periodthe Pre-Closing Period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive Except as specifically provided pursuant to Sections 2.5(b) and 2.5(c) of this Agreement, amend, modify or waive any stock repurchase rights, accelerate, ; amend or change modify the period of exercisability or other material terms of options options, warrants or restricted stock, ; reprice or reprice exchange options or warrants granted under any employee, consultant, consultant or director or other stock plans or otherwise; or authorize cash payments in exchange for any options options, warrants or restricted stock granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Scheduleotherwise;
(b) Enter into any material partnership arrangements, joint development agreements, joint venture agreements or strategic alliances;
(c) Enter into any letter of intent, term sheet or agreement, or otherwise make any agreement or commitment, with respect to any rights related to the Company Intellectual Property Rights or any Company product, excluding the sale of Company Products in the ordinary course of business consistent with past practice;
(d) Grant any severance or termination pay (cash, equity or otherwise) to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as disclosed in the Company Disclosure Schedule, or adopt any new severance or termination plan or amend or modify or alter in any manner any severance or termination plan, agreement or arrangement existing on the date hereof;
(ce) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual PropertyProperty Rights, or enter into grants any agreements or make other commitments or arrangements to grant, transfer or license to any person future patent, copyright or other intellectual property patent rights, other than non-exclusive licenses granted excluding the sale of Company Products in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)practice;
(df) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for for, any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(eg) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiariesCompany, except repurchases of unvested shares at cost in connection with the termination of the service employment relationship with any employee, director or consultant employee pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)hereof;
(fh) Issue, deliver, sell, authorize, grant, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options stock options therefor outstanding as of the date of this AgreementAgreement under the Company Stock Option Plan, and (ii) the grant granting of employee stock optionsoptions to purchase shares of Company Common Stock with exercise prices equal to or greater than the fair market value of Company Common Stock in the ordinary course of business, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired and in accordance with Section 5.1((k))Company Stock Option Plans, (iii) the issuance or delivery of shares of Company Common Stock upon the exercise of the options referred to in clause (ii) above and (iv) the issuance or delivery of shares of Company Common Stock pursuant to the exercise of warrants outstanding on the date hereof;
(gi) Cause, permit or propose any amendments to its Certificate the articles of Incorporation, Bylaws incorporation or other charter documents (or similar governing instruments bylaws of any of its subsidiaries)the Company;
(hj) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof orthereof, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which that are material, individually or in the aggregate, to the business of the Company;
(k) Sell, lease, license, encumber, convey, assign, sublicense or otherwise dispose of or transfer, in whole or in part, any properties or assets or any interest therein, except sales of inventory and used equipmentfor sales, leases, licenses, encumbrances, conveyances, assignments, sublicenses, dispositions or the license of the Company's products other transfers (i) in the ordinary course of business consistent with past practice and (it being agreed ii) that Parent shall are not unreasonably withhold consent to any non-exclusive license agreement related material, individually or in the aggregate, to the business of the Company's enterprise business and that Parent's failure , excluding, in any event, sales of Company Products to reasonably object to any such agreement within five business days customers in the ordinary course of any request for consent shall constitute such consent)business;
(jl) IncurLend money to any Person, assume or pre-pay incur any indebtedness for borrowed money, money or guarantee any such indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any securities of the foregoing Company, other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, practice or to the extent not prohibited by subsection (iiaa) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreementbelow;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(lm) Adopt or amend any Employee Benefit Plan or employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "“at will"”), pay any special bonus or special remuneration (cash, equity or otherwise) to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentconsultant, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary except payment of bonuses or increases for in salaries or wage rates or fringe benefits to non-officer employees made or consultants in the ordinary course of business, business consistent with past practice, provided that in the event the Company may xxxxx xxxxxxxxx or change in any material respect any management policies termination pay pursuant to subsection (d) the Company shall be able to xxxxx xxxxxxxxx or procedurestermination pay pursuant to this subsection (m);
(mn) Make any individual or series of related payments outside of the ordinary course of business in an aggregate excess of $250,000100,000;
(no) Except in the ordinary course of businessbusiness consistent with past practice or to the extent not prohibited under subsection (p) below, modify, amend or terminate any material contract or agreement to which the Company or Material Contract (other than any subsidiary thereof is a party Material Contract set forth on Schedule 10.3 of this Agreement), or waive, delay the exercise of, release or assign any material rights or material claims thereunder;
(op) Enter into, amend or extend materially modify, any contractscontract, agreements, agreement or obligations obligation that would constitute a Material Contract relating to the distribution, sale, license or marketing by third parties of the Company's ’s products (including, but not limited to, Company Products) or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(pq) Materially revalue Revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a GAAP, adopt or change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures Extend the payment of any Accounts Receivable beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quartera sixty (60) day period;
(s) Materially accelerate Enter into any closing agreement in respect of material Taxes, settle any claim or delay collection assessment in respect of any notes material Taxes, or accounts receivable consent to any extension or waiver of the limitation period applicable to any claim or assessment in advance respect of any material Taxes, make or beyond their regular due dates change any material Tax election, change any method of accounting resulting in a material amount of additional Tax or file any material amended Tax Return;
(t) Incur or enter into any agreement or commitment in excess of $150,000 individually;
(u) Hire any employee or consultant with an annual compensation level in excess of $75,000 or who is entitled to or is paid a bonus in excess of $10,000;
(v) Pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the dates when the same would have been collected payment, discharge or satisfaction of any claim, liability or obligation or series of related claims, liabilities or obligations in an amount less than $20,000 outside of the ordinary course of business;
(tw) Materially delay Make any grant of exclusive rights to any third party;
(x) Modify or accelerate payment amend in any manner that is materially adverse to the Company, or terminate, any confidentiality agreement entered into by the Company, or release or waive any material rights for claims, or modify or amend in any manner materially adverse to the Company, any confidentiality, standstill or similar agreements to which the Company is a party;
(y) Engage in any action with the intent to, directly or indirectly, adversely impact or materially delay, or which would have the effect of adversely impacting or materially delaying, the consummation of the Transaction or any account payable beyond of the other transactions contemplated by this Agreement;
(z) Sell, lease, license, encumber, convey, assign, sublicense or otherwise dispose of or transfer, in whole or in advance part, any properties, assets or rights used in, or any other interest in, the Company Business, excluding the sale of its due date or the date such liability would have been paid Company Products in the ordinary course of businessbusiness consistent with past practice;
(uaa) Settle or compromise Incur any suits or claims or threatened suits or claims indebtedness for payments borrowed money other than in connection with the financing of receivables in an amount up to an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that 2.0 million where the Company may renew has first provided Parent an opportunity to loan the Company money on at least market terms and Parent has declined to do so (for any insurance policy in effect as of the date of this Agreementreason or no reason);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(zbb) Agree in writing or otherwise commit to take any of the actions described in Section 5.1(a6.1(a) through (yaa) above.
Appears in 2 contracts
Samples: Merger Agreement (Arthrocare Corp), Merger Agreement (Arthrocare Corp)
Conduct of Business by the Company. Except as contemplated by this Agreement or as for matters set forth in Section 5.1 5.01 of the Company ScheduleDisclosure Letter or otherwise contemplated or required by this Agreement, during or as required by a Governmental Entity or by applicable Law, or as contemplated by the period Proceedings, or with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent and shall otherwise consent in writingcause each Company Subsidiary to, carry on (x) conduct its business, in all material respects, business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance course of business in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and (y) use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers organization and existing relationships with employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, suppliers and others with which it has business dealingsGovernmental Entities. In addition, and without limiting the generality of the foregoing, except as permitted set forth in the Company Disclosure Letter or otherwise contemplated or required by the terms of this Agreement, and except or as provided in required by a Governmental Entity or by applicable Law, or as contemplated by the Company ScheduleProceedings, without or with the prior written consent of ParentParent (which consent shall not be unreasonably withheld, during such periodconditioned or delayed), from the date of this Agreement until the Effective Time, the Company shall not do any of the following not, and shall not permit its subsidiaries to any Company Subsidiary to, do any of the following:
(ai) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declaredeclare, set aside or pay any dividends on on, or make any other distributions (whether in cash, stock, equity securities stock or propertyproperty or any combination thereof) in respect of, any of its capital stock, other equity interests or voting securities, except for (1) quarterly cash dividends payable by the Company or any Company Subsidiary in respect of shares of Company Common Stock on a schedule consistent with the Company’s past practices in an amount per share of Company Common Stock not in excess of (A) $0.38 for quarterly dividends declared on or before January 1, 2017 and (B) $0.40 for quarterly dividends declared after January 1, 2017, (2) dividend equivalents accrued or payable by the Company in respect of Company Performance Units, Company Restricted Share Units and Other Equity-Based Rights in accordance with the applicable award agreements, (3) dividends and distributions by a direct or indirect Company Subsidiary to its parent and (4) a “stub period” dividend to holders of record of Company Common Stock as of immediately prior to the Effective Time equal to the product of (A) the number of days from the record date for payment of the last quarterly dividend paid by the Company prior to the Effective Time, multiplied by (B) a daily dividend rate determined by dividing the amount of the last quarterly dividend prior to the Effective Time by ninety-one (91);
(ii) amend any of its Organizational Documents (except for immaterial or ministerial amendments);
(iii) except as permitted by Section 5.01(a)(v) or for transactions among the Company and the Company Subsidiaries or among the Company Subsidiaries, split, combine, consolidate, subdivide or reclassify any of its capital stock, other equity interests or voting securities, or securities convertible into or exchangeable or exercisable for capital stock or splitother equity interests or voting securities, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for its capital stock, other equity interests or voting securities;
(iv) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any capital stock; provided that stock or voting securities of, or equity interests in, the Company or any Company Subsidiary or any securities of the Company or any Company Subsidiary convertible into or exchangeable or exercisable for capital stock or voting securities of, or equity interests in, the Company or any Company Subsidiary, or any warrants, calls, options or other rights to acquire any such capital stock, securities or interests, except for (1) the acquisition by the Company of shares of Company Common Stock in the open market to satisfy its obligations under all Company Benefit Plans or under the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions ’s dividend reinvestment and stock purchase plan (the “Company DRIP”) and (2) the withholding of shares of Company Common Stock to satisfy Tax obligations with respect to their capital stock awards granted pursuant to the Company Stock Plan;
(v) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien any Equity Securities or Company Voting Debt, in each case, except for (1) the issuance of shares of Company Common Stock under the Company DRIP, (2) the settlement of Company Restricted Share Units, Company Performance Units or Other Equity-Based Rights, or (3) the grant of Company Restricted Share Units, Company Performance Units or Other Equity-Based Rights in the ordinary course of business and consistent with past practices (but only, with respect to clauses (1) – (3), in amounts not exceeding the aggregate amount set forth on Section 5.01(a)(v) of the Company Disclosure Letter);
(vi) (1) grant to any Company Personnel any increase in compensation or benefits (including paying to any Company Personnel any amount not due) except in the ordinary course of business and consistent with past practices.
, (e2) Purchasegrant to any Company Personnel any increase in change-in-control, redeem severance, retention or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stockpay, or enter into other agreements or commitments of amend any character obligating it to issue change-in-control, severance, retention or termination agreement with any such shares Company Personnel, (3) establish, adopt, enter into, amend in any material respect or convertible securitiesterminate any Company Union Contract or Company Benefit Plan or Company Benefit Agreement (or any plan or agreement that would be a Company Union Contract, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of Benefit Plan or Company Benefit Agreement if in existence on the date of this Agreementhereof), and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof oreach case, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice practices or (it being agreed that Parent shall not unreasonably withhold consent 4) take any action to accelerate the time of vesting, funding or payment of any non-exclusive license agreement related compensation or benefits under any Company Benefit Plan or Company Benefit Agreement, except in the case of the foregoing clauses (1) through (4) for actions required pursuant to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days terms of any request for consent shall constitute such consentCompany Benefit Plan or Company Benefit Agreement existing on the date hereof, or as required by the terms and conditions of this Agreement;
(vii) make any material change in accounting methods, principles or practices, except to the extent as may have been required by a change in applicable Law or GAAP or by any Governmental Entity (including the SEC or the Public Company Accounting Oversight Board);
(jviii) Incur(1) make any acquisition or disposition, assume sale or pretransfer of a material asset or business (including by merger, consolidation or acquisition of stock or any other equity interests or assets) except for (1) any acquisition or disposition for consideration that is individually not in excess of $10,000,000 and in the aggregate not in excess of $25,000,000 or (2) any disposition of obsolete or worn-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities out equipment in the ordinary course of business, or (iii) as contemplated by this Agreement;
(kix) Hire incur any employeeIndebtedness, except replacements for former non-officer employees, hired (1) Indebtedness incurred in the ordinary course of business consistent with past practice;
, (l2) Adopt or amend as reasonably necessary to finance any employee stock purchase or employee stock option plancapital expenditures permitted under Section 5.01(a)(x), or adopt or amend (3) Indebtedness in replacement of existing Indebtedness, (4) guarantees by the Company of existing Indebtedness of any material employee benefit planwholly owned Company Subsidiary, or enter into (5) guarantees and other credit support by the Company of obligations of any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into Company Subsidiary in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, (6) borrowings under existing revolving credit facilities (or change in any material respect any management policies replacements thereof on comparable terms) or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves existing commercial paper programs in the ordinary course of business or (7) Indebtedness in amounts necessary to maintain the capital structure of the Company Subsidiaries, as authorized by the KCC, and to maintain the present capital structure of the Company consistent with past practicespractice in all material respects;
(x) ormake, or agree or commit to make, any capital expenditure, except (1) in accordance with the capital plan set forth in Section 5.01(a)(x) of the Company Disclosure Letter, plus a 10% variance for each principal category set forth in such capital plan, (2) with respect to any capital expenditure not addressed by the foregoing clause (1), not to exceed $75,000,000 in any twelve (12) month period, (3) capital expenditures related to operational emergencies, equipment failures or outages or deemed necessary or prudent based on Good Utility Practice or (4) as required by Law or a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practicesGovernmental Entity;
(qxi) Make (1) enter into, modify or amend in any loans, advances or capital contributions tomaterial respect, or investments interminate or waive any material right under, any other person or entity, Filed Company Contract (except for loans(A) any modification, advancesamendment, capital contributions termination or investments between waiver in the ordinary course of business or (B) a termination without material penalty to the Company or the appropriate Company Subsidiary) or (2) without limiting Parent’s obligations under Section 6.03, enter into any wholly-owned subsidiary of Contract that, from and after the Closing, purports to bind Parent and its Subsidiaries (other than the Company and the Company Subsidiaries);
(xii) make or another wholly-owned subsidiary change any material Tax election, change any material method of Tax accounting, settle or compromise any material Tax liability or refund, enter into any closing agreements relating to Taxes, amend any material Tax Return, grant any waiver of any statute of limitations with respect to, or any extension of a period for the assessment of, any material Tax (excluding extensions of time to file Tax Returns obtained in the ordinary course);
(xiii) waive, release, assign, settle or compromise any material Claim against the Company or any Company Subsidiary, except for waivers, releases, assignments, settlements or compromises that (A) with respect to the payment of monetary damages, the amount of monetary damages to be paid by the Company or the Company Subsidiaries does not exceed (I) the amount with respect thereto reflected on the Company Financial Statements (including the notes thereto) or (II) $10,000,000, in the aggregate, in excess of the proceeds received or to be received from any insurance policies in connection with such payment or (B) with respect to any nonmonetary terms and conditions thereof, would not have or would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the Company and advances of business related expenses the Company Subsidiaries (including expenses related to business travel) to employees in the ordinary course and consistent with past practicetaken as a whole);
(rxiv) Authorize effectuate a “plant closing” or make capital expenditures beyond “mass layoff,” as those provided terms are defined in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarterWARN;
(sxv) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course enter into a new line of business;
(txvi) Materially delay adopt a plan or accelerate payment agreement of any account payable beyond complete or in advance of its due date partial liquidation or the date such liability would have been paid in the ordinary course of businessdissolution;
(uxvii) Settle materially change any of its energy price risk management and marketing of energy parameters, limits and guidelines (the “Company Risk Management Guidelines”) or compromise enter into any suits physical commodity transactions, exchange-traded futures and options transactions, over-the-counter transactions and derivatives thereof or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required similar transactions other than as permitted by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesRisk Management Guidelines; or
(zxviii) Agree in writing or otherwise enter into any Contract to take do any of the actions described in Section 5.1(a) through (y) aboveforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Westar Energy Inc /Ks), Merger Agreement (Kansas City Power & Light Co)
Conduct of Business by the Company. Except as contemplated by Pending the Merger.
(a) The Company covenants and agrees that between the date of this Agreement or and the Effective Time, unless Parent shall otherwise agree in writing (and except as set forth in Section 5.1 of the Company ScheduleDisclosure Letter or as otherwise expressly contemplated, during the period from the date of permitted or required by this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its termsAgreement), the Effective Time, or such time as Parent's designees Company shall constitute a majority and shall cause each Subsidiary of the Company Boardto, (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 only in the ordinary and usual course of business and in a manner consistent with prior practice, (iii) use its best efforts to preserve substantially intact its business organizations, to keep available the services of its current officers and employees and to preserve the current relationships of the Company and each its Subsidiaries with customers, suppliers, research and clinical collaborators, licensees and other Persons with which the Company or any of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular Subsidiaries has business relations and ordinary course, in substantially the same manner as heretofore conducted and in compliance (iv) comply in all material respects with all applicable laws Laws wherever its business is conducted, including the timely filing of all reports, forms or other documents with the SEC required pursuant to the Securities Act or the Exchange Act.
(b) Without limiting the foregoing, the Company covenants and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available agrees that between the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms date of this Agreement, Agreement and except as provided in the Company Schedule, without the prior written consent of Parent, during such periodEffective Time, the Company shall not do any and shall cause each of its Subsidiaries not to (except as expressly contemplated, permitted or required by this Agreement, as set forth on the applicable subsection of Schedule 5.1(b) of the following and shall not permit its subsidiaries to do any Company Disclosure Letter or with the prior written approval of the following:
Parent): (ai) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declaredeclare, set aside aside, make or pay any dividends on or make any other distributions (whether in cash, stock, equity securities stock or property) in respect of any of its capital stock (except for dividends payable on the Series A Shares or Series B Shares, which shall be paid in Common Shares); (ii) 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 any capital stock; provided that any shares of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their its capital stock in the ordinary course or that of business and consistent with past practices.
its Subsidiaries; (eiii) Purchaserepurchase, redeem or otherwise acquire, directly or indirectly, any shares of its or its' Subsidiaries' capital stock of the or any Company Stock Rights or its subsidiariesSubsidiary Stock Rights; (iv) issue, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director deliver or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company its or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such Subsidiaries capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, Company Stock Rights (other than the issuance of Common Shares (iA) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to upon the exercise of Company Stock Options therefor or Company Warrants outstanding as of the date of this Agreement, (B) pursuant to the Company ESPPs, (C) upon conversion of the outstanding Convertible Notes or (D) in payment of dividends on the Series A Shares and Series B Shares) or Subsidiary Stock Rights; (iiv) take any action that would reasonably be expected to result in any of the grant conditions set forth in Article VI not being satisfied or that would impair the ability of employee stock options, consistent the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation; (vi) [intentionally omitted]; (vii) amend the Company Certificate of Incorporation or Company Bylaws or equivalent organizational documents of the Company's established past Subsidiaries; (viii) incur, create, assume or otherwise become liable for any indebtedness for borrowed money, other than short-term borrowings under existing lines of credit (or 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 similarly situated employeesthe obligations of any other Person; (ix) make any loans, advances or capital contributions to non-officer employees who are hired or investments in accordance any other Person (other than loans, advances, capital contributions or investments less than $250,000 made in the ordinary course of business consistent with Section 5.1((kprior practice));
; (gx) Causemerge or consolidate with any other entity or adopt a plan of complete or partial liquidation, permit or propose any amendments to its Certificate of Incorporationdissolution, Bylaws recapitalization or other charter documents reorganization; (xi) change its Tax or similar governing instruments of any of its subsidiaries);
(h) Acquire financial accounting methods, principles or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof orpractices, except as permitted required by Section 5.1((m)GAAP or applicable Laws; (xii) alter, amend or ((r))create any obligations with respect to compensation, otherwise acquire severance, benefits, change of control payments or agree any other payments to acquire any assets which are materialpresent or former employees, individually directors or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business Affiliates of the Company, except sales of inventory other than alterations or amendments (I) made with respect to non-officers and used equipment, or the license of the Company's products non-directors in the ordinary course of business consistent with past practice (it being agreed that Parent shall that, in the aggregate, do not unreasonably withhold consent to any non-exclusive license agreement related result in a material increase in benefits or compensation expense to the Company's enterprise business Company or (II) as expressly contemplated by Sections 1.7 and that Parent's failure 1.8 of this Agreement; (xiii) make any other change in the employment terms for any of its directors or officers; (xiv) make any change to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or the Company Benefit Plans other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition than as expressly contemplated by Sections 1.7 and 1.8 or enter into or adopt any arrangement having the economic effect of new Company Benefit Plans; (xv) hire any new employees, directors or Affiliates of the foregoing Company other than (i) in connection than, with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant respect to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired officers and non-directors in the ordinary course of business consistent with past practice;
; (lxvi) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement or other labor agreement; (xvii) sell, license, mortgage, transfer, lease, pledge or otherwise subject to any Encumbrance or otherwise dispose of any material properties or assets (including stock or other ownership interests of its Subsidiaries), other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will")prior practice; (xviii) acquire any material business, pay any special bonus assets or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants securities other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practicesprior practice; (xix) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and material Tax election not consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law prior practice or settle or compromise any material tax liability;
(w) Cancel income Tax Liability or terminate fail to file any material insurance policy naming it as Tax Return when due or fail to cause such Tax Returns when filed to be complete and accurate in all material respects; (xx) take any action to render inapplicable, or to exempt any Third Party from the provisions of any Antitakeover Laws; (xxi) adopt a beneficiary stockholder rights agreement, or "poison pill"; (xxii) enter into any agreement or understanding or arrangement with respect to the voting or registration of its or its Subsidiaries capital stock or Company Stock Rights or Subsidiary Stock Rights, (xxiii) enter into a loss payable payee Company Material Contract or permit amend any such policy to lapse Company Material Contract or grant any release or relinquishment of any rights under any Company Material Contract, (it being understood that xxiv) settle or compromise any claim, suit, action, proceeding or investigation or pay, discharge or satisfy any Liability other than the Company may renew any insurance policy payment, discharge or satisfaction of Liabilities reflected or reserved against in effect full in the financial statements as of the December 31, 2004 or incurred subsequent to that date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers ordinary course of its distribution channel business consistent with prior practice, (which has not been "sold through" xxv) enter into or materially amend any supply or license agreement with respect to end-user customers and which such distributors have the right to returnMPL Adjuvant or (xxvi) above the aggregate value of such inventory at June 30authorize, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing commit or otherwise agree to take any of the actions described in this Section 5.1(a) through (y) above5.1(b).
Appears in 2 contracts
Samples: Merger Agreement (Smithkline Beecham Corp), Merger Agreement (Corixa Corp)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of Pending the Merger. The ----------------------------------------------------- Company Schedulecovenants and agrees that, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, or the Effective Time, or such time as Parent's designees unless Parent shall constitute a majority of the Company Boardotherwise agree in writing, the Company shall conduct its business and each shall cause the businesses of its subsidiaries shallSubsidiaries to be conducted only in, and the Company and its Subsidiaries shall not take any action except to in, the extent that Parent shall otherwise consent ordinary course of business and in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same a manner as heretofore conducted consistent with past practice and in compliance in all material respects with all applicable laws and regulations; and the Company shall use reasonable best efforts to preserve substantially intact the business organization of the Company and its Subsidiaries, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of the current officers, employees and consultants of the Company and its Subsidiaries and to preserve the present officers relationships of the Company and employees, and (iii) preserve its relationships Subsidiaries with customers, suppliers, distributors, licensors, licensees, suppliers and others other persons with which it the Company or any of its Subsidiaries has significant business dealingsrelations. In additionBy way of amplification and not limitation, except as permitted contemplated by this Agreement or set forth in Section 5.1 of the terms Disclosure Schedule, the Company shall not and shall not permit its Subsidiaries to, during the period from the date of this AgreementAgreement and continuing until the earlier of the termination of this Agreement or the Effective Time, and except as provided in directly or indirectly do, or propose to do, any of the Company Schedule, following without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or otherwise change the period of exercisability of options Company Charter or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company ScheduleBy-Laws;
(b) Grant issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any severance shares of capital stock of any class, or termination pay any options, warrants, convertible securities or other rights of any kind to acquire any officer shares of capital stock, or employee except any other ownership interest (including, without limitation, any phantom interest) in the Company, any of its Subsidiaries or affiliates, other than pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in exercise of currently outstanding options under the Company Schedule, or adopt any new severance planStock Option Plans;
(c) Transfer sell, pledge, dispose of or license to encumber any person or entity or otherwise extend, amend or modify in any material respect any rights to assets of the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted any of its Subsidiaries (except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practice practice, not to exceed $1,000,000 in the aggregate, (it being agreed that Parent shall ii) dispositions of obsolete or worthless assets, or (iii) sales of immaterial assets not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days in excess of any request for consent shall constitute such consent$100,000);
(di) Declaredeclare, set aside aside, make or pay any dividends on dividend or make any other distributions distribution (whether in cash, stock, equity securities stock or propertyproperty or any combination thereof) in respect of any of its capital stock or 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 of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for any shares of its capital stock; provided that , or (iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any Subsidiary to purchase, repurchase, redeem or otherwise acquire, any of its securities or any securities of its Subsidiaries, or any option, warrant or right, di- rectly or indirectly, to acquire any such securities, or propose to do any of the Company's wholly-owned subsidiaries may declareforegoing, set aside other than pursuant to the exercise of currently outstanding options under the Company Stock Option Plans;
(i) acquire (by merger, consolidation or pay dividends acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances or capital contributions to or investments in any other distributions with respect to their capital stock person, except in the ordinary course of business and consistent with past practices.
practice; (eiii) Purchaseenter into or amend any material contract or agreement, redeem or otherwise acquireenter into, directly renew, amend or indirectlyterminate any lease relating to real property; (iv) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $30,000,000 for the Company and its Subsidiaries taken as a whole; or (v) enter into or amend any shares of capital stock contract, agreement, commitment or arrangement to effect any of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Pricematters prohibited by this Section 5.1(e);
(f) Issueincrease the compensation payable or to become payable to its directors, deliver, sell, authorize, pledge officers or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of employees (except such capital stock, or subscriptions, rights, warrants or options increases payable to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-non- officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired made in the ordinary course of business consistent with past practice;
(l) Adopt ), grant any severance or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plantermination pay to, or enter into or amend any employment contract or collective bargaining severance agreement with, any director, officer (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees except for officers who are terminable "at will")terminated on an involuntary basis) or other employee of the Company or any of its Subsidiaries, establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees, pay any special bonus or special remuneration bonuses to any directorofficer of the Company (except as set forth in Section 5.1(f) of the Disclosure Schedule), employee materially change any actuarial assumption or consultant except pursuant other assumption used to written agreements outstanding calculate funding obligations with respect to any pension or retirement plan, or change the manner in which contributions to any such plan are made or the basis on which such contributions are determined, except, in each case, as may be required by law or contractual commitments which are existing as of the date hereof and previously disclosed listed in writing to Parent, or increase Section 3.13 of the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or proceduresDisclosure Schedule;
(mg) Make take any action to change accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments outside of the ordinary course accounts payable and collection of business in an aggregate excess of $250,000accounts receivable), except as required by GAAP;
(nh) Except make any material Tax election inconsistent with past practice or settle or compromise any material federal, state, local or foreign Tax liability or agree to an extension of a statute of limitations, except to the extent the amount of any such settlement has been reserved for in the ordinary course of business, modify, amend or terminate any material contract or agreement to which financial statements contained in the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunderSEC Reports filed prior to the date of this Agreement;
(oi) Enter intopay, amend discharge or extend satisfy any contractsclaims, agreements, liabilities or obligations relating to the distribution(absolute, saleaccrued, license asserted or marketing by third parties of the Company's products unasserted, contingent or products licensed by the Companyotherwise), other than agreementsthe payment, extensions discharge or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves satisfaction in the ordinary course of business and consistent with past practices) or, except as required by a change practice of liabilities reflected or reserved against in law or the financial statements contained in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and SEC Reports filed prior to the Company date of this Agreement or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees incurred in the ordinary course of business and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(zj) Agree take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(aSections 5.1 (a) through (yi) above, or any action which would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder, in each case, such that the conditions set forth in Sections 7.2(a) or 7.2(b), as the case may be, would not be satisfied.
Appears in 2 contracts
Samples: Merger Agreement (Emc Corp), Merger Agreement (Emc Corp)
Conduct of Business by the Company. Except as contemplated by From and after the date hereof and prior to the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, and except (i) as may be required or prohibited by Law (provided that, to the extent practicable, the Company must first consult with Parent), (ii) with the prior consent of the Parent (which consent may not be unreasonably withheld, delayed or conditioned), (iii) as set forth in Section 5.1 of the Company Schedule, during Disclosure Schedule or (iv) as expressly contemplated by this Agreement:
(a) The Company covenants and agrees with Parent that the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority business of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent Subsidiaries shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore be conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligationsin, and use its commercially reasonable efforts such entities shall not take any action except in, the ordinary course of business consistent with past practices practices; and policies the Company, for itself and on behalf of its Subsidiaries, agrees with Parent to (i) use its reasonable best efforts to preserve intact in all material respects its present business organization, (ii) keep available the services of its present officers organizations and employees, and (iii) preserve its relationships goodwill with customers, suppliers, distributorsregulators, licensorsagents, licenseesresellers, creditors, lessors, employees and others with which it has business dealings. In additionassociates.
(b) The Company agrees, except as permitted by on behalf of itself and its Subsidiaries, that between the time of execution hereof and the Effective Time, the Company:
(i) shall not amend its charter or bylaws, or, subject to the terms of this Agreement, and except as provided otherwise take any action to exempt any person or entity (other than Parent or its Subsidiaries) or any action taken by any person or entity from any Takeover Statute or similarly restrictive provisions of its organizational documents or terminate, amend or waive any provisions of any confidentiality or standstill agreements in place with any third parties;
(ii) other than (x) pursuant to the agreements set forth on Section 5.1(b)(ii) of the Company ScheduleDisclosure Schedule and (y) dividends and distributions by a wholly owned Subsidiary to its parent, without the prior written consent of Parentshall not, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or its Subsidiaries to authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions distribution with respect to its outstanding shares of capital stock (whether in cash, stockassets, equity securities or property) in respect of any capital stock or other securities of the Company or its Subsidiaries);
(iii) shall not, and shall not permit any of its Subsidiaries to, split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for any for, shares of its capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(eiv) Purchase, redeem except as required pursuant to existing written agreements or otherwise acquire, directly or indirectly, any shares employee benefit plans in effect prior to the execution of capital stock this Agreement and set forth on Section 5.1(b)(iv) of the Company Disclosure Schedule or its subsidiaries, except repurchases as otherwise required to comply with applicable Law (including the requirements of unvested shares at cost in connection with the termination Section 409A of the service relationship with Code, provided, that such changes do not result in any employeeacceleration or increase in payment), director shall not, and shall not permit any of its Subsidiaries to (A) grant or consultant pursuant increase the compensation, severance or other benefits payable or to stock option become payable to its current or purchase agreements in effect on the date hereof former directors, officers or employees, (which repurchases B) establish, adopt, enter into or amend any collective bargaining agreement, plan, trust, fund, policy or arrangement (including the Company shall be obligated Benefit Plans) for the benefit of any current or former directors, officers or employees or any of their beneficiaries, except, in each case, as would not result in an increase in the cost of maintaining such collective bargaining agreement, plan, trust, fund, policy or arrangement (including the Company Benefit Plans), (C) make any new equity awards to effectuate if the repurchase price is less than the Offer Price);
(f) Issueany director, deliver, sell, authorize, pledge officer or otherwise encumber any shares of the capital stock employee of the Company or any of its subsidiariesSubsidiaries, (D) amend the terms of any outstanding equity-based awards, (E) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, to the extent not already provided in any such Company Benefit Plan, (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (G) forgive any loans to current or former directors, officers or employees of the Company or any of its Subsidiaries;
(v) shall not, and shall not permit any of its Subsidiaries to, enter into or make any loans to any of its officers, directors, employees, affiliates, agents or consultants (other than business expense advances in the ordinary course of business consistent with past practices) or make any change in its existing borrowing or lending arrangements for or on behalf of any of such persons, except as required by the terms of any Company Benefit Plan;
(vi) shall not, and shall not permit any of its Subsidiaries to, make any change with respect to material accounting policies or procedures, except as required by GAAP, SEC rule or policy or applicable Law;
(vii) except in respect of the Merger and except as permitted pursuant to Section 5.3, shall not, and shall not permit any of its Subsidiaries to, authorize, propose or announce an intention to authorize or propose, or negotiate or enter into agreements with respect to, any mergers, consolidations or business combinations or acquisitions of securities or, other than in the ordinary course of business consistent with past practices, assets;
(viii) shall not permit any of its Subsidiaries to, adopt any amendments to its certificate of incorporation or by-laws;
(ix) shall not and shall not permit any of its Subsidiaries to, issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of its capital stock or other ownership interest in the Company or any of its Subsidiaries or any securities convertible into or exchangeable for any such shares of such capital stockor ownership interest, or subscriptions, any rights, warrants or options to acquire or with respect to any shares of such capital stock or any securities convertible into shares of capital stock, ownership interest or enter into other agreements convertible or commitments exchangeable securities or take any action to cause to be exercisable any otherwise unexercisable option under any existing stock option plan (except as otherwise required by the express terms of any character obligating it to issue any such shares or convertible securities, unexercisable options outstanding on the date hereof) (other than (iA) issuances of Company Common Stock in respect of any exercise of stock options outstanding on the date hereof and (B) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreementoptions to purchase Company Common Stock, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employeesif necessary, to noneffectuate an optionee direction upon exercise or for withholding if “cash-officer employees who are hired in accordance with Section 5.1((k)less” exercise is available);
(gx) Causeexcept as required by a Contract disclosed to Parent prior to the date hereof and set forth on Section 3.7(a) of the Company Disclosure Schedule shall not, and shall not permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiariesSubsidiaries to, grant, confer or award any options, warrants, convertible security or other rights to acquire any shares of its capital stock or take any action to cause to be exercisable any otherwise unexercisable option under any existing stock option plan (except as otherwise required by the express terms of any unexercisable options outstanding on the date hereof or as contemplated by Section 2.2(e) of this Agreement);
(hxi) Acquire shall not, and shall not permit any of its Subsidiaries to, directly or agree to indirectly, purchase, redeem or otherwise acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion shares of the assets of, or by any other manner, any business its capital stock or any corporationrights, partnership, association warrants or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree options to acquire any assets which are material, individually or in the aggregate, such shares (other than pursuant to the business terms of the Company or enter into any joint venture, strategic partnership or allianceOption Plans);
(ixii) Sellshall not, leaseand shall not permit any of its Subsidiaries to, licenseincur, encumber assume, guarantee, or otherwise dispose of become liable for any properties Indebtedness (directly, contingently or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products otherwise) other than in the ordinary course of business consistent with past practice and except for (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related A) Indebtedness incurred pursuant to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days ’s Credit Agreement, dated as of any request for consent shall constitute such consentFebruary 9, 2004, including the revolving credit facility thereunder (as amended through the date of this Agreement);
, (jB) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any Indebtedness in accordance with Section 5.1(b)(xii)(B) of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practiceCompany Disclosure Schedule, (iiC) pursuant to existing credit facilities guarantees by the Company of Indebtedness of wholly-owned Subsidiaries of the Company, which Indebtedness is incurred in the ordinary course of businesscompliance with this Section 5.1(b), or (iiiD) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into interest rate xxxxxx on terms in the ordinary course of business consistent with past practice with employees who are terminable "at will")a maturity of no more than nine (9) months, pay any special bonus (E) capital leases entered into by the Company or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directorsSubsidiaries in the ordinary course of business consistent with past practices and (F) Indebtedness not to exceed $50,000,000 in aggregate principal amount outstanding at any time incurred by the Company or any of its Subsidiaries on terms substantially consistent with Indebtedness for borrowed money which the Company is obligated on as of the date hereof;
(xiii) shall not, officers, employees or consultants and shall not permit any of its Subsidiaries to (other than normal periodic salary increases for non-officer employees made business advances in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person person, other than by the Company or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary a Subsidiary of the Company and to, or in the Company or another wholly-owned subsidiary any of the Company and advances of business related expenses its Subsidiaries;
(including expenses related to business travelxiv) to employees other than in the ordinary course of business, shall not sell, lease, license, transfer, abandon, let lapse, exchange or swap, mortgage or otherwise encumber (including securitizations), or subject to any Lien or otherwise dispose of any Intellectual Property or any of its properties or assets, including the capital stock of any of its Subsidiaries and consistent with past practiceexcept (A) for sales, leases, licenses, abandonments, lapses, transfers, mortgages or encumbrances of obsolete assets, (B) pursuant to existing agreements in effect prior to the execution of this Agreement and (C) as may be required by applicable Law or any Governmental Entity in order to permit or facilitate the consummation of the transactions contemplated hereby;
(rxv) Authorize shall not, and shall not permit any of its Subsidiaries to, modify, amend, terminate or make capital expenditures beyond those provided waive any rights under any Company Material Contract or any Additional Contract in any material respect in the Company's existing capital expenditure budgetaggregate, other than in the ordinary course of business, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in enter into any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected Additional Contract, other than in the ordinary course of business;
(txvi) Materially delay it shall not make or accelerate payment commit to any capital expenditures, except as set forth on Section 5.1(b)(xvi) of the Company Disclosure Schedule;
(xvii) except as required by Law or as may be required by GAAP, it shall not (A) make or change any material Tax election, (B) materially amend any material Tax Return, (C) take any material position on any material Tax Return filed on or after the date of this Agreement, or adopt any material accounting method therefor that is inconsistent with elections made, positions taken or accounting methods used in preparing or filing similar Tax Returns in prior periods or (D) settle or resolve any material Tax controversy;
(xviii) it shall not (A) enter into any line of business in any geographic area other than the current lines of business of the Company and its Subsidiaries and products and services reasonably ancillary thereto, including any current line of business and products and services reasonably ancillary thereto in any geographic area for which the Company or any of its Subsidiaries currently holds a Company License authorizing the conduct of such business, product or service in such geographic area or (B) except as currently conducted, engage in the conduct of any account payable beyond business in any state which would require the receipt or in advance transfer of a Permit authorizing operation or provision of any communication services or foreign country that would require the receipt or transfer of, or application for, a Permit;
(xix) it shall not file for any Permit (A) outside of the ordinary course of business or (B) the receipt of which would reasonably be likely to prevent or materially impair or delay the consummation of the transactions contemplated hereby;
(xx) it shall not settle any Action before, or threatened to be brought before, a Governmental Entity for an amount to be paid by the Company or any of its due date Subsidiaries in excess of $1,000,000, or which would be reasonably likely to have any materially adverse impact on the date such liability would have been paid operations of the Company and its Subsidiaries, taken as a whole, as a result of a non-monetary settlement;
(xxi) it shall not assign, transfer, cancel, fail to renew or fail to extend any Company License or material Other Company License, except for cancellations or modifications of Company Licenses or Other Company Licenses in the ordinary course of businessbusiness consistent with past practice, provided that such actions would not, individually or in the aggregate, reasonably be likely to prevent or materially impair or delay the consummation of the transactions contemplated hereby;
(uxxii) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election shall not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described set forth on Section 5.1(b)(xxii) of the Company Disclosure Schedule; and
(xxiii) it shall not, and shall not permit any of its Subsidiaries to, agree or enter into any contract, in Section 5.1(acontravention of the foregoing.
(c) through Prior to making any written or material broad-based oral communications to the current or former directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication and shall promptly respond to the Company (ysuch response to take no more than four (4) abovebusiness days), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
Appears in 2 contracts
Samples: Merger Agreement (Centennial Communications Corp /De), Merger Agreement (At&t Inc.)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, terms and the Effective Time, or such time the Company agrees, except as Parent's designees shall constitute a majority set forth in Section 6.1 of the Company Board, the Company and each of its subsidiaries shall, except Disclosure Letter or to the extent that Parent shall otherwise consent in writing, and to cause each of its Subsidiaries to, carry on its business, in all material respects, business in the usual, regular and ordinary course, course in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulationsconducted, to pay timely its debts and taxes when dueTaxes, subject to good faith disputes over such debts or taxes, and on the same payment terms such debts and taxes have historically been paid, to collect its receivables in the same manner and on the same terms such receivables have historically been collected, to timely pay or perform other material obligations when due, subject and to good faith disputes over such obligations, and use its all commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its the Company's present business organizationorganizations, (ii) keep available the services of its present officers and employees, employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with which it has the Company and its Subsidiaries, to the end that the Company's goodwill and ongoing businesses be unimpaired at the Effective Time. The Company shall promptly notify Parent of any material event or occurrence not in the ordinary course of business dealingsof the Company. In additionExcept as expressly provided for by this Agreement or as set forth in Section 6.1 of the Company Disclosure Letter, except as permitted by the terms Company shall not, and shall cause its Subsidiaries not to, prior to the Effective Time or earlier termination of this Agreement, and except as provided in the Company ScheduleAgreement pursuant to its terms, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rightsexcept as required by the Company Benefit Plans, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans the Company Benefit Plans or authorize cash payments in exchange for any options granted under any of such plans plans;
(b) enter into any partnership agreements, joint development agreements or strategic alliance agreements;
(c) increase the pay or other compensation or grant any severance or termination pay (1) to any executive officer or director or (2) to any other employee except payments made in connection with the termination of employees who are not executive officers in amounts consistent with its policies and past practices or pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as disclosed in Section 4.27 of the Company ScheduleDisclosure Letter;
(bd) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to its Intangible Assets;
(e) commence any litigation other than (1) for the routine collection of bills, or (2) in such cases where the Company Intellectual Property, or enter into grants in good faith determines that failure to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted commence suit could result in the ordinary course material impairment of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to a valuable aspect of the Company's enterprise business and business; provided that Parent's failure the Company consults with the Parent prior to reasonably object to any the filing of such agreement within five business days of any request for consent shall constitute such consent)a suit;
(df) Declare, set aside declare or pay any dividends on or make any other distributions (whether in cash, stock, equity securities stock or property) in respect of any of its capital stock stock, or 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 any shares of capital stock; provided that any stock of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(eg) Purchaseredeem, redeem repurchase or otherwise acquire, directly or indirectly, recapitalize or reclassify any shares of its capital stock;
(h) issue, deliver or sell or authorize or propose the issuance, delivery or sale of, any shares of its capital stock of the Company any class or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stockinto, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stockacquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than (i) the issuance, delivery and/or sale issuance of shares of Company Common Stock pursuant to the exercise of Options therefor Company stock options outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(gi) Causecause, permit or propose any amendments to its Certificate of IncorporationArticles or Company Bylaws, Bylaws or other charter documents (or similar governing instruments of amend any of its subsidiaries)Material Contract;
(hj) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sellsell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Companyits business, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)practice, or liquidate, in whole or in part;
(jk) Incur, assume or pre-pay incur any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing money (other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) or pursuant to existing credit facilities in the ordinary course of business, ) or (iii) as contemplated by this Agreementguarantee any such indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or guarantee any debt securities of others;
(kl) Hire adopt or amend any employee, except replacements for former non-officer Company Benefit Plan or increase the salaries or wage rates of any of its employees, hired including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract not in the ordinary course of business consistent with past practiceor the payment of any special bonus or special remuneration to any director or employee, other than bonuses reflected on the Company Financial Statements;
(lm) Adopt revalue any assets, including without limitation writing down the value of inventory, writing off notes or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (accounts receivable other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"or waiving any right of material value;
(n) pay, discharge or satisfy in an amount in excess of $50,000 (in any one case) or $50,000 (in the aggregate), pay any special claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration to any directorremuneration, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made the payment, discharge or satisfaction in the ordinary course of businessbusiness of liabilities of the type reflected or reserved against in the Company balance sheet dated as of June 30, consistent with past practice2000 included in the Company Financial Statements;
(o) make or change any material election in respect of Taxes, adopt or change in any material respect any management policies accounting method in respect of Taxes, file any amendment to a material Return, enter into any closing agreement, settle any claim or procedures;
assessment in respect of Taxes (m) Make except settlements effected solely through payment of immaterial sums of money), or consent to any payments outside extension or waiver of the ordinary course limitation period applicable to any claim or assessment in respect of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' noticeTaxes;
(p) Materially revalue enter into any of its assets (Material Contract other than the booking of reserves in the usual, regular and ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practicespractices and policies;
(q) Make amend or terminate any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practiceits Existing Insurance Policies;
(r) Authorize make any changes with respect to the tuition, fees, program duration or make capital expenditures beyond those provided in curricula of any of the Company's existing capital expenditure budgetprograms offered by any School, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in including, without limitation, implementing any calendar quarternew foreign exchange student programs except for non-material changes;
(s) Materially accelerate hire, fire (other than for cause) or delay collection change the responsibilities or work location of any notes employee or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;prospective employee whose annual compensation is greater than $75,000 and whose employment cannot be terminated by it on thirty days notice without liability; or
(t) Materially delay take, or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree agree in writing or otherwise to take take, any of the actions described in Section 5.1(a) through (y) above, or any other action which could cause or could be reasonably likely to cause any of the conditions to the Merger, not to be satisfied.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Career Education Corp), Merger Agreement (Edutrek Int Inc)
Conduct of Business by the Company. Except as contemplated for matters expressly permitted by this Agreement or as set forth in Section 5.1 of the Company ScheduleAgreement, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of Time the Company Boardshall, and shall cause the Company and each of Subsidiaries to, conduct its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, business in the usual, regular ordinary and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, usual course of business and use its commercially reasonable best efforts consistent with past practices and policies to (i) preserve intact its present current business organization, (ii) keep available the services of its present officers and employees, employees and (iii) preserve maintain its relationships with customers, suppliers, distributorsvendors, licensors, licensees, distributors and agents and others having business dealings with which it has business dealingsthem. In addition, and without limiting the generality of the foregoing, except as for matters expressly permitted by the terms of this Agreement, and except as provided in from the date of this Agreement to the Effective Time, the Company Scheduleshall not, and shall not permit the Company Subsidiaries to, do any of the following without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(ai) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(bA) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declaredeclare, set aside or pay any dividends on on, or make any other distributions (whether in cashrespect of, any of its capital stock, equity securities or propertyother than (x) in respect of any capital stock or required dividends on the Company Series D Stock and (y) dividends and distributions by the Company Subsidiaries to the Company, (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 any shares of its capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(eC) Purchasepurchase, redeem or otherwise acquire, directly or indirectly, acquire any shares of capital stock of the Company or its subsidiariesthe Company Subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities, except repurchases of unvested shares at cost in connection with the termination of the service employment relationship with any employee, director or consultant employee pursuant to stock option or purchase agreements in effect on the date hereof hereof, or (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer PriceD) adopt a plan of complete or partial liquidation (or resolutions providing for or authorizing such liquidation);
(f) Issue, deliverdissolution, sellmerger, authorizeconsolidation, pledge restructuring, recapitalization or otherwise encumber any shares of the capital stock reorganization of the Company or any the Company Subsidiaries;
(ii) except for grants of its subsidiaries, or any securities convertible into shares (A) Company Employee Stock Options pursuant to written commitments in effect on and disclosed to Parent prior to the date of such capital stock, or subscriptions, rights, warrants or options this Agreement and (B) Company Employee Stock Options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it purchase up to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of 150,000 shares of Company Common Stock pursuant at exercise prices not less than $12.37 per share to new hires in the ordinary course of business and consistent with past practice, authorize for issuance, issue, deliver, sell or grant (w) any shares of its capital stock, (x) any Company Voting Debt or other voting securities, (y) any securities convertible into or exchangeable for, or any options, warrants or rights to acquire, any such shares, voting securities or convertible or exchangeable securities or (z) any "phantom" stock, "phantom" stock rights, stock appreciation rights or stock-based performance units, other than the issuance of Company Common Stock upon the exercise of Company Employee Stock Options therefor outstanding as of on the date of this Agreement, Agreement and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k))their present terms;
(giii) Causeamend its certificate of incorporation, permit or propose any amendments to its Certificate of Incorporation, Bylaws by-laws or other comparable charter documents (or similar governing instruments of any of its subsidiaries)organizational documents;
(hiv) Acquire acquire or agree to acquire (A) by merging or consolidating with, or by purchasing any equity interest in or a material substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization Person or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire B) any assets which are materialoutside the ordinary and usual course of business;
(v) (A) grant to any present or former employee, individually officer or in the aggregate, to the business director of the Company or the Company Subsidiaries any increase in compensation or fringe benefits, except for (x) increases in annual bonuses payable in January or February of 2004 under the Company's Annual Incentive Plan in the ordinary course of business consistent with past practice and (y) increases in salary for non-officer employees in the ordinary and usual course of business, (B) grant to any present or former employee, officer or director of the Company or the Company Subsidiaries any increase in retention, severance or termination benefits or pay, (C) other than entering into employment agreements with employees of the Company approved in advance by Parent, enter into or amend any employment, consulting, indemnification, severance or termination agreement with any such present or former employee, officer or director, (D) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or Company Plan, except as required by Applicable Law or to maintain the qualification of any Company Plan that is intended to be qualified within the meaning of Code Section 401(a), (E) take any action to accelerate any rights or benefits, or make any material determinations not in the ordinary and usual course of business, under any collective bargaining agreement or Company Plan, (F) loan or advance money or other property to any present or former employee, officer or director of the Company or the Company Subsidiaries, (G) except as permitted under Section 6.01(a)(ii), grant any new, or amend any existing, Company Employee Stock Option or enter into any joint ventureagreement under which any Company Employee Stock Option would be required to be issued, strategic partnership (H) except as contemplated by Section 7.11, take any action (or alliancefail to take any action) which action (or failure to act) would impair the ability of the Company or any Company Subsidiary (or any successor thereto) to unilaterally amend or terminate any Company Plan, or (I) make any representation or commitment to, or enter into any formal or informal understanding with, any Person with respect to compensation, benefits or terms of employment to be provided by Parent, the Surviving Corporation or any of the Surviving Corporation's subsidiaries at or subsequent to the Effective Time;
(ivi) Sellmake any change in accounting methods, principles or practices affecting the reported consolidated assets, liabilities or results of operations of the Company, except as may be required by Applicable Laws or GAAP;
(vii) sell, lease, license, encumber license or otherwise dispose of or permit to become subject to any Lien, other than a Permitted Lien, any properties or assets assets, tangible or intangible, which are material, individually or in the aggregate, material to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary and usual course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)business;
(jviii) Incurexcept as disclosed in Section 6.01(a)(viii) of the Company Disclosure Letter, assume or pre-pay (A) incur any indebtedness for borrowed money, money or guarantee any such indebtedness or obligation of another personPerson, issue or sell any debt securities or options, warrants, calls warrants or other rights to acquire any debt securitiessecurities of the Company or the Company Subsidiaries, guarantee any debt securities of another Person, enter into any "keep well" or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing other than foregoing, except for (ix) routine borrowings incurred in connection with the financing ordinary and usual course of ordinary course trade payables consistent with past practicebusiness and not in excess of $100,000 in the aggregate, or (iiy) pursuant to existing credit facilities as in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding effect on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary usual course of business and consistent with past practicesnot in excess of $100,000 in the aggregate, or (B) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person Person, other than to or entity, except for loans, advances, capital contributions in the Company or investments between any wholly-owned subsidiary the Company Subsidiaries or to customers of the Company or the Company Subsidiaries in the ordinary and usual course of business;
(ix) make or agree to make any new capital expenditure or expenditures not included in the Company's capital expenditure budget, a copy of which has been furnished to Parent, that, individually, is in excess of $100,000 or, in the aggregate, are in excess of $500,000;
(x) (A) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary and usual course of business or in accordance with their terms, of liabilities reflected or reserved against in the most recent consolidated financial statements of the Company included in the Filed SEC Documents or incurred in the ordinary and usual course of business, (B) cancel any material Indebtedness (individually or in the aggregate) or waive any material claims or rights (C) waive the material benefits of, or agree to modify in any material manner, any confidentiality or standstill agreement to which the Company or another wholly-owned subsidiary of the Company Subsidiaries is a party;
(xi) Except as otherwise contemplated by Sections 4.16 and advances 7.10, further amend the Rights Agreement, except in connection with any action permitted by Section 6.02(b) or as required by any statute, rule, regulation, injunction, order or decree of business related expenses any Governmental Entity;
(including expenses related to business travelxii) to employees amend any Material Contract or Contract providing for payments or otherwise involving amounts in excess of $100,000, other than any such amendment in the ordinary course of business consistent with past practice, or, except in the ordinary and usual course of business, enter into any Material Contract;
(xiii) modify, amend or terminate any Material Contract (including, without limitation, any Material Contract relating to any Material Intellectual Property Rights) or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(rxiv) Authorize discharge, settle, assign or make capital expenditures beyond those provided in the Company's existing capital expenditure budgetsatisfy any claims, whether or that are individually not pending before a Governmental Entity, in excess of $25,000 individually or $100,000 or in the aggregate aggregate, other than the discharge or satisfaction of any such claims in excess the ordinary course of $500,000 business consistent with past practice, or waive any material benefits of, or agree to modify in any calendar quarterrespect adverse to the Company, any confidentiality or standstill agreements to which the Company or any Company Subsidiary is a party;
(sxv) Materially accelerate enter into or delay collection extend any Contract relating to the distribution, sale, license, promotion or marketing by third parties of the Products (including Products under development) which is not terminable without payment or penalty upon thirty (30) days notice, other than pursuant to any notes such agreements currently in place in accordance with their terms as of the date hereof;
(xvi) transfer, assign, terminate, cancel, abandon or accounts receivable modify any Approvals or fail to maintain such Approvals as currently in advance effect;
(xvii) fail to maintain all insurance policies as currently in effect or allow any of such policies to lapse;
(xviii) transfer or beyond license to any Person or entity or otherwise extend, amend, allow to lapse or go abandoned, or modify any Material Intellectual Property Rights other than implied licenses provided to customers for their regular due dates specific end use;
(xix) enter into any license agreement with any Person or entity to obtain any Intellectual Property Right;
(xx) terminate any employee of the dates when the same would have been collected Company or any Company Subsidiary whose base annual salary exceeds $100,000;
(xxi) hire any new employee other than research and development, manufacturing or quality assurance personnel in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(zxxii) Agree in writing authorize any of, or otherwise commit or agree to take any of of, the actions described in Section 5.1(a) through (y) aboveforegoing actions.
Appears in 2 contracts
Samples: Merger Agreement (I Stat Corporation /De/), Merger Agreement (I Stat Corporation /De/)
Conduct of Business by the Company. Except as contemplated by (a) The Company covenants and agrees that, between the date of this Agreement and the earlier to occur of the Effective Time and the date, if any, on which this Agreement is terminated pursuant to Section 8.1 (the “Interim Period”), except as may be agreed in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), as may be expressly required or permitted pursuant to this Agreement, as required by applicable Law, as it relates to any Company Vessel Sale (which for the avoidance of doubt is expressly permitted) or as set forth in Section 5.1 6.1(a) of the Company Schedule, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its termsDisclosure Letter, the Effective TimeCompany shall, or such time as Parent's designees and shall constitute cause each of its Subsidiaries to (i) conduct its business in the ordinary course and in a majority of the Company Board, manner consistent with past practice and (ii) use commercially reasonable efforts to ensure that the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) Subsidiaries preserve intact its present their current business organizationorganizations, (ii) keep available the services of its present their current officers and employees, and (iii) preserve its relationships maintain their relations and goodwill with all suppliers, customers, supplierslandlords, distributorscreditors, licensors, licensees, employees, and others other Persons having business relationships with which it has business dealings. In additionthe Company and each of its Subsidiaries, respectively.
(b) Without limiting the foregoing, the Company covenants and agrees that, during the Interim Period, except as may be agreed in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), as may be expressly required or permitted by the terms of pursuant to this Agreement, and except as provided required by applicable Law or as set forth in Section 6.1(b) of the Company Schedule, without the prior written consent of Parent, during such periodDisclosure Letter, the Company shall not do any of the following not, and shall not cause or permit any of its subsidiaries to Subsidiaries to, do any of the following:
(ai) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant propose to written agreements outstanding, or policies existing, on the date hereof and disclosed in amend the Company Schedule;
Articles of Incorporation or Company By-Laws (b) Grant or such equivalent organizational documents of any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course Subsidiary of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(dii) Declaresplit, combine, reclassify or subdivide any shares of stock or other equity securities or ownership interests of the Company or any of its Subsidiaries;
(iii) except for dividends and distributions payable or paid to the Company and/or one or more of its wholly owned Subsidiaries by one or more of the Company’s wholly owned Subsidiaries, declare, set aside or pay any dividends dividend on or make any other distributions (whether in cash, stock, property or otherwise) with respect to shares of capital stock of the Company or any of its Subsidiaries or other equity securities or property) ownership interests in respect of any capital stock the Company or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.its Subsidiaries;
(eiv) Purchaseredeem, redeem repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock other equity interests of the Company or any of its subsidiariesSubsidiaries;
(v) except in connection with any Company Vessel Sale or for transactions among the Company and one or more of its wholly owned Subsidiaries or among one or more wholly owned Subsidiaries of the Company or among the Company or one or more of its wholly owned Subsidiaries and Parent, or as otherwise contemplated in Section 6.1(b)(vi), issue, sell, pledge, dispose, encumber or grant any securities convertible into shares of such the Company’s or any of its Subsidiaries’ capital stock, or subscriptionsany options, rightswarrants, warrants convertible securities or options other rights of any kind to acquire any shares of such the Company’s or any of its Subsidiaries’ capital stock or other equity interests;
(vi) grant, confer, award, or modify the terms of any securities convertible into shares of capital options, Rights, restricted stock units, restricted stock, performance shares, equity-based compensation or enter into other agreements rights to acquire, or commitments denominated in, any of the Company’s or any of its Subsidiaries’ capital stock or take any action not otherwise contemplated by this Agreement to cause to be exercisable any otherwise unexercisable option under any existing stock plan of the Company or any of its Subsidiaries (except as explicitly required by the terms of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Restricted Stock pursuant to the exercise of Options therefor outstanding as of on the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(gvii) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire (including by merger, consolidation or acquisition of stock or assets) any assets which are materialor property, individually or in the aggregateEntity or any division thereof, to the business of except (A) acquisitions by the Company or enter into any joint venture, strategic partnership of its wholly owned Subsidiaries of or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business from an existing wholly owned Subsidiary of the Company, except sales of inventory and used equipment, or (B) the license acquisitions described on Section 6.1(b)(vii) of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practiceCompany Disclosure Letter, (iiC) pursuant to existing credit facilities in the ordinary course acquisitions of business, assets or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired property in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt (D) acquisitions for which the fair market value of the total consideration paid by the Company and its Subsidiaries does not exceed $1,000,000 individually or amend any material employee benefit plan$5,000,000 in the aggregate, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course purchase of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made bunkers in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(mviii) Make except in connection with any payments outside Company Vessel Sale, sell, pledge, lease, dispose of or encumber any property or assets other than dispositions of property or assets (including Subsidiaries of the ordinary course Company) if the fair market value of business the total consideration received therefrom does not exceed $1,000,000 individually or $5,000,000 in an aggregate excess the aggregate, other than the sale of $250,000;
(n) Except bunkers in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(oix) Enter intoincur, create or assume any Indebtedness for borrowed money or issue or amend the terms of any debt securities or extend any contractsassume, agreementsguarantee or endorse, or obligations relating to otherwise become responsible for the distribution, sale, license or marketing by third parties Indebtedness of any other Person (other than a wholly owned Subsidiary of the Company's products or products licensed by ), except Indebtedness incurred in order to finance the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by acquisitions set forth in Section 6.1(b)(ix) of the Company for convenience on Disclosure Letter, in the amounts set forth therein and in an amount not more than 60 days' noticeexceeding the aggregate purchase price of such acquisitions and related transaction costs;
(px) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses Person (including expenses related to business travel) any of its officers, directors, employees, Affiliates, agents or consultants), other than advances made to officers, directors and employees in the ordinary course and of business consistent with past practice, or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons, whether pursuant to a Company Benefit Plan or otherwise, other than by the Company or a wholly owned Subsidiary of the Company to the Company or a wholly owned Subsidiary of the Company;
(rxi) Authorize or make capital expenditures beyond those provided except in connection with any Company Vessel Sale, enter into, renew, modify, amend or, other than in accordance with the Company's existing capital expenditure budgetterms of any Company Material Contract, terminate, or that are individually waive, release, compromise or assign any rights or claims under, any Company Material Contract, except as would not have an adverse economic impact on the Company in excess of an aggregate of $100,000 1,000,000 per year in the case of recurring payment obligations or $5,000,000 in the aggregate in excess the case of $500,000 in any calendar quarternon-recurring payment obligations and would not otherwise impose or renew any material restriction on the Company or terminate, waive, release, compromise or assign any material right or claim;
(sxii) Materially accelerate except in connection with any Company Vessel Sale or delay collection of as permitted by Section 6.4(c), waive, release, assign any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits rights or claims or threatened suits make any payment, direct or claims for payments indirect, of any other liability of the Company or any of its Subsidiaries, in an aggregate amount in excess of $500,0005,000,000, before the same comes due in accordance with its terms;
(vxiii) Make any tax election not required except as permitted by law or Section 6.4(c), (A) pay, discharge, satisfy, settle or compromise compromise
(1) any Action, in each case made or pending against the Company or any of its Subsidiaries, excluding relating to Taxes (which shall be subject to the restrictions set forth in Section 6.1(b)(xviii)), other than settlements that (w) do not involve the payment of money damages, (x) do not require any material tax liabilityactions or impose any material restrictions on the business or operations of the Company and its Subsidiaries, (y) provide for the complete release of the Company and its Subsidiaries of all claims and (z) do not provide for any admission of liability by the Company or any of its Subsidiaries and (2) any Action involving any present, former or purported holder or group of holders of the Company Common Stock other than in accordance with Section 6.4 or (B) commence any Action material to the Company and its Subsidiaries, taken as a whole, other than any Action to enforce the terms of this Agreement or any other document or agreement contemplated hereby, including the Voting and Support Agreement;
(wxiv) Cancel or terminate any material insurance policy naming it except as a beneficiary or a loss payable payee or permit any such policy required pursuant to lapse (it being understood that the Company may renew any insurance policy Benefit Plans in effect as of the date hereof, or as otherwise required by Law, (A) hire or terminate any officer or director of this Agreement)the Company or any of its Subsidiaries or promote or appoint any Person to a position of officer or director of the Company or any of its Subsidiaries, (B) increase the compensation, perquisites or other benefits payable or to become payable to any current or former employees, directors or officers of the Company or any of its Subsidiaries, (C) grant any severance or termination pay to, or enter into any severance agreement with, any employee, director or officer of the Company or any of its Subsidiaries, (D) enter into any employment, change of control, severance or retention agreement with any current or former employee, officer or director of the Company or any of its Subsidiaries, (E) accelerate the vesting or payment of the compensation payable or the benefits provided to or to become payable or provided to any current or former employees, directors or officers of the Company or any of its Subsidiaries or (F) establish, adopt, enter into or amend any employee benefit plan, Company Benefit Plan, collective bargaining agreement, plan, trust, fund, policy or arrangement with, or for the benefit of, any current or former directors, officers or employees or any of their beneficiaries;
(xxv) Increase make any material change to its methods of accounting in effect as of the aggregate dollar value of inventory owned date hereof, except as required by distributors a change in the first and second tiers of its distribution channel GAAP (which has not been "sold through" to end-user customers and which such distributors have the right to returnor any interpretation thereof) above the aggregate value of such inventory at June 30, 1998or in applicable Law;
(yxvi) Begin shipment enter into any new line of business material to the Company and its Subsidiaries, taken as a whole;
(xvii) fail to duly and timely file all material reports and other material documents required to be filed with all Governmental Authorities and other authorities (including the NYSE), subject to extensions permitted by Law;
(xviii) make, change or rescind any material election relating to Taxes, change a material method of Tax accounting, amend any material Tax Return, settle or compromise any material United States federal, state, local or non-United States income Tax liability, audit, claim or assessment, enter into any material closing agreement related to Taxes, or knowingly surrender any right to claim any material refund, except in each case as required by Law;
(xix) adopt a plan of merger, complete or partial liquidation or resolutions providing for or authorizing such merger, liquidation or a dissolution, consolidation, recapitalization or bankruptcy reorganization;
(xx) permit any material Company Insurance Policy to terminate or lapse without replacing such policy with comparable coverage or amend or cancel any material Company Insurance Policy;
(xxi) amend, terminate, or grant any waiver of any new products provision of, or redeem the rights issued under, the Company Shareholder Rights Agreement, unless a Change in Company Recommendation has occurred in accordance with Section 6.6;
(xxii) take, or agree to customerscommit to take, except for alpha versions and any action that would reasonably be expected to result in any of the conditions to the Merger set forth in Article VII not more than 50 beta versions of any product delivered to customers solely for evaluation purposesbeing satisfied; or
(zxxiii) Agree in writing authorize, or otherwise enter into any Contract to take do any of the actions described in Section 5.1(a) through (y) aboveforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Baltic Trading LTD), Merger Agreement (Genco Shipping & Trading LTD)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during the period from From and after the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, or the Effective Time, or such time as Parent's designees shall constitute a majority of the Company BoardClosing Date (whichever first occurs), the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, :
(a) carry on its business, in all material respects, business in the usual, regular and ordinary course, course substantially in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedulecarried on;
(b) Grant any severance not (i) make payments or termination pay distributions (other than normal salaries) to any officer or employee Affiliate of the Company except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed for transactions in the Company Scheduleordinary course of business upon commercially reasonable terms; (ii) sell, lease, transfer or adopt assign any new severance plan;
(c) Transfer of its assets, tangible or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rightsintangible, other than non-exclusive licenses granted for a fair consideration in the ordinary course of business and consistent with past practice other than the disposition of obsolete or unusable property; (it being agreed that Parent shall not unreasonably withhold consent to iii) enter into any non-exclusive license agreement related to the Company's enterprise business Contract (other than purchase and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock sales orders in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((kpast practice) involving either more than $50,000 or outside the ordinary course of business without the consent of the Parent (which consent shall not be unreasonably withheld));
; (giv) Causeaccelerate, permit or propose terminate, modify in any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating withmaterial respect, or by purchasing cancel any equity interest in or a material portion of the assets of, or by any Contract (other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except than purchase and sales of inventory and used equipment, or the license of the Company's products orders in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent accordance with past practice, ) involving more than $50,000 to which the Company is a party or by which any of them is bound without the consent of the Parent (iiwhich consent shall not be unreasonably withheld); (v) pursuant make any capital expenditure (or series of related capital expenditures) involving either more than $50,000 (unless such expenditure is identified in the current business plan of the Company as disclosed to existing credit facilities in Parent) or outside the ordinary course of business; (vi) delay or postpone the payment of accounts payable and other liabilities outside the ordinary course of business; (vii) cancel, compromise, waive or release any right or claim (iiior series of related rights and claims) as contemplated not covered by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired the reserves or accruals relating to such claim in the Company Financial Statements either involving more than $50,000 or outside the ordinary course of business consistent without the consent of the Parent (which consent shall not be unreasonably withheld); (viii) grant any license or sublicense of any rights under or with past practice;
respect to any Intangible Assets; or (lix) Adopt or amend make any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit planloan to, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will")transaction with, pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its Affiliates, directors, officers, officers and employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(tc) Materially delay or accelerate payment of any account payable beyond or in advance use, operate, maintain and repair all of its due date or the date such liability would have been paid assets and properties in the ordinary course of businessa normal business manner consistent with its past practices;
(ud) Settle or compromise any suits or claims or threatened suits or claims for payments use commercially reasonable efforts to preserve in an aggregate amount in excess all material respects its business organization intact, to retain the services of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy the Employees and to lapse (it being understood that conduct business with suppliers, customers, creditors and others having business relationships with the Company may renew any insurance policy in effect as the best interests of the date of this Agreement)Company;
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) above.
Appears in 2 contracts
Samples: Merger Agreement (Ivex Packaging Corp /De/), Merger Agreement (Ivex Packaging Corp /De/)
Conduct of Business by the Company. Except as contemplated by During the period from the date of this Agreement or as set forth in Section 5.1 and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, the Company Scheduleshall, except to the extent that Parent shall otherwise consent in writing, carry on its business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and use its commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organization, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees and others with which it has business dealings. In addition, except as expressly permitted by the terms of this Agreement, without the prior written consent of Parent, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, terms or the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive Except as required by law, in furtherance of this Agreement, or pursuant to the terms of the Company Stock Option Plans, waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, consultant or director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Scheduleplans;
(b) Grant Enter into any material partnership arrangements, joint development agreements or strategic alliances other than in the ordinary course of business consistent with past practice;
(c) Except for the employment and severance agreements described in Section 5.20 of this Agreement or as approved by the Transition Team described in Section 5.21, grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to the Company Scheduleother, or adopt any new severance plan;
(c) Transfer plan or license to any person or entity or otherwise extend, amend or modify or alter in any material respect manner any rights to severance plan, agreement or arrangement existing on the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)date hereof;
(d) DeclareExcept for effecting the reverse stock split previously approved by the Company's shareholders, declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiariesCompany, except repurchases of unvested shares at cost in connection with the termination of the service employment relationship with any employee, director or consultant employee pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options stock options therefor outstanding as of the date of this Agreement, and (ii) the grant granting of employee stock optionsoptions to purchase shares of Company Common Stock to be granted at fair market value in the ordinary course of business, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired and in accordance with Section 5.1((kexisting stock option plans in an amount not to exceed options to purchase 10,000 shares in the aggregate, (iii) shares of Company Common Stock issuable upon the exercise of the options referred to in clause (ii)), and (iv) shares of Company Common Stock issuable to participants in the Company ESPP consistent with the terms thereof;
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws any charter document or other charter documents (or similar governing instruments of any of its subsidiaries)Bylaw;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof orthereof, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company Company, or enter into any joint ventureventures, strategic partnership partnerships or alliancealliances, other than in the ordinary course of business consistent with past practice;
(i) Adopt a plan of complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization;
(j) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory in the ordinary course of business consistent with past practice, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(jk) Incur, assume or pre-pay Incur any indebtedness for borrowed money, money or guarantee any such indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securitiessecurities of the Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, practice or (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt Except as required by law or in furtherance of this Agreement, adopt or amend any employee benefit plan or employee stock purchase or employee stock option plan (unless pursuant to the terms of the respective plan, or adopt or amend any material employee benefit plan), or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, director or employee or consultant except pursuant to written agreements outstanding on other than in the date hereof and previously disclosed in writing to Parentordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or proceduresconsultants;
(m) Make any individual or series of related payments outside of the ordinary course of business in an aggregate excess of $250,000300,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue Revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SECGAAP, make any change in accounting methods, principles or practices, including inventory accounting practices;
(qo) Make Engage in any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary action that could reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Company and Code whether or not otherwise permitted by the Company or another wholly-owned subsidiary provisions of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practicethis Article IV;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(vp) Make any tax election not required by law or settle or compromise any material tax liability;
(wq) Cancel or terminate Make any material insurance policy naming it as a beneficiary or a loss payable payee or permit grant of exclusive rights to any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesthird party; or
(zr) Agree in writing or otherwise to take any of the actions described in Section 5.1(a4.1 (a) through (yq) above.
Appears in 2 contracts
Samples: Merger Agreement (Xcarenet Inc), Merger Agreement (Healthcare Com Corp)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during the period from (a) Between the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time except as Parent's designees shall constitute a majority set forth in Section 6.01(a) of the Company BoardDisclosure Letter or as otherwise expressly contemplated by this Agreement, the Company shall, and shall cause each of its subsidiaries shallSubsidiaries to, (i) conduct its business in, and not take any action except in, the ordinary course of business; and (ii) use its reasonable best efforts to preserve substantially intact the extent that Parent shall otherwise consent in writingbusiness organization of the Company and its Subsidiaries, carry on to keep available the services of the current officers, Company Employees and consultants of the Company and its businessSubsidiaries, and to preserve, in all material respects, the current relationships of the Company and the Subsidiaries with customers, licensees, suppliers and other persons with which the Company or any of its Subsidiaries has business relations; provided that the foregoing obligations set forth in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, clause (ii) keep available shall not require any expenditure of money (or commitment thereto) by the services of its present officers and employees, and Company unless directed in writing by Parent or AcquisitionCo.
(iiib) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In additionWithout limiting the foregoing, except (w) as permitted otherwise expressly contemplated by this Agreement, (x) as disclosed in Section 6.01(b) of the Company Disclosure Letter, (y) as directed in writing by Parent, AcquisitionCo, Merger Sub or any Affiliate thereof or (z) as specifically approved by the terms Company Board or a standing committee (other than the Special Committee) thereof (and in the case of committee approval, specifically disclosed to the Company Board) prior to the date of this Agreement, and except as provided in neither the Company Schedulenor any of its Subsidiaries shall, between the date of this Agreement and the Effective Time, directly or indirectly, do or agree to do, any of the following without the prior written consent of ParentAcquisitionCo (such consent not to be unreasonably withheld, during such periodconditioned or delayed):
(i) make, the Company shall not do revoke or change any Tax election, change any method of Tax accounting, settle, compromise or incur any liability for Taxes, fail to timely file any Tax Return that is due, file any amended Tax Return or claim for refund, surrender any right to claim a Tax refund, or consent to any extension or waiver of the following and shall not permit its subsidiaries statute of limitations period applicable to do any of the following:
(a) Waive any stock repurchase rightsTax claim or assessment, accelerate, amend in each case except as required by GAAP or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Scheduleapplicable Law;
(bii) Grant change the accounting principles used by it unless required by a change in GAAP, applicable Law or any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance planGovernmental Authority;
(ciii) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than nonexcept for short-exclusive licenses granted term borrowings incurred in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent under its existing credit facility, incur or guarantee indebtedness for borrowed money or commit to borrow money, make any loans or cancel, release or assign any indebtedness to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)person;
(div) Declare, set aside or pay any dividends on or make any other distributions capital expenditure in excess of $250,000 in the aggregate;
(whether in cashv) acquire, stocklease or license from any person (by merger, equity securities or property) in respect consolidation, acquisition of any capital stock or splitassets or otherwise), combine or reclassify any capital sell, lease, license, dispose or effect an Encumbrance of (by merger, consolidation, sale of stock or issue assets or authorize the issuance of otherwise), any material assets other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock than in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)business;
(fvi) Issuechange any compensation arrangement or contract with any present or former Company Employee (except for increases in the base salaries of Company Employees other than officers or senior managers in the ordinary course of business), deliverofficer, selldirector, authorizeconsultant, pledge stockholder or otherwise encumber any shares of the capital stock other service provider of the Company or any of its subsidiariesSubsidiaries or grant any severance or termination or change in control pay to any such present or former Company Employee, officer, director, consultant, stockholder or other service provider or increase any benefits payable under any severance or termination or change in control pay policies or establish, amend or terminate any Company Plan or increase benefits under any Company Plan, or grant any Company Equity Awards or other awards under any Company Stock Plan, in each case other than as (A) required pursuant to the terms of any Company Plan or contract as in effect on the date of this Agreement, (B) annual merit based raises for Company Employees (other than officers) in an amount and on a schedule consistent with past practice or (c) required by Law;
(vii) declare, set aside or pay any dividend or make any other distribution with respect to Equity Interests of the Company or any of its Subsidiaries, or otherwise make any payments to stockholders in their capacity as such;
(viii) effect a “plant closing” or “mass layoff,” as those terms are defined in the Worker Adjustment and Retraining Notification Act;
(ix) (i) except as otherwise required pursuant to an existing contract set forth on Section 4.03 of the Company Disclosure Letter, issue, deliver, sell, pledge, transfer, convey, dispose or permit the imposition of an Encumbrance on any Equity Interests, or any options, warrants, securities exercisable, exchangeable or convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock Equity Interest or any securities convertible into shares of capital stock, Company Right or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, Company Voting Debt other than (i) the issuance, delivery and/or sale issuance of shares of Company Common Stock pursuant to upon the exercise of Company Options therefor outstanding as of the date of this Agreement, and (ii) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any of its outstanding Equity Interests or (iii) split, combine, subdivide or reclassify any Equity Interests;
(x) enter into any contract providing for the grant sale or license of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k)material Intellectual Property (other than ordinary course software licenses);
(gxi) Cause, permit or propose any amendments subject to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory 7.02 and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of businessterms thereof, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party terminate, or waive, release or assign any material rights or claims thereunderwith respect to, any confidentiality agreement or non-competition agreement or standstill contract that relates to a business combination involving the Company or any of its Subsidiaries;
(oxii) Enter lease, license, mortgage, hypothecate, pledge, sell, sublease, grant any material Encumbrance affecting and/or transfer any interest in any Company Owned Real Property or Company Leased Real Property, or enter into any material amendment or extension, or termination, of any leasehold interest in any Company Leased Real Property or create any new leasehold interest in any Company Leased Real Property;
(xiii) take any action that is intended or would reasonably be expected to result in any of the conditions to the Offer or the Merger not being satisfied;
(xiv) make any acquisition of, capital contribution to, or investment in, any assets or stock of any person (other than any wholly owned Subsidiary) (whether by way of merger, consolidation, tender offer, share exchange or other activity);
(xv) merge or consolidate with any person (other than mergers among wholly owned Subsidiaries);
(xvi) enter into, amend or extend any contractsterminate, agreementsmaterially amend, or obligations relating to the distributionwaive any material rights under any contract of a type described in Section 4.14(a), saleexcept for those contracts which terminate or expire in accordance with their terms;
(xvii) waive, license release, assign, settle or marketing by third parties of the Company's products compromise any material claim or products licensed by the Companyany material litigation or arbitration;
(xviii) satisfy, discharge, waive or settle any material liabilities, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(txix) Materially delay fail to maintain in full force and effect or accelerate payment of any account payable beyond fail to use commercially reasonable efforts to replace or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the renew Company may renew any insurance policy in effect Policies existing as of the date of this Agreement);
(xxx) Increase the aggregate dollar value amend its certificate of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30incorporation, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesbylaws or other organizational or governing documents; or
(zxxi) Agree in writing or otherwise enter into any contract to take do any of the actions described in Section 5.1(a) through (y) aboveforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Sl Industries Inc), Merger Agreement (Handy & Harman Ltd.)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during During the period from the date of this Agreement and continuing until the Final Closing or earlier termination of the termination Final Closing Obligations, except (A) as required or expressly permitted by the provisions of this Agreement pursuant to its termsAgreement, the Effective Time, or such time (B) as Parent's designees shall constitute a majority set forth in Section 7.1 of the Company BoardDisclosure Schedule, (C) as may be required under applicable Law or (D) with the prior written consent of Purchaser (such consent not to be unreasonably conditioned, withheld or delayed), Sellers will cause the Company and each of to use commercially reasonable efforts to (v) conduct its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, business in the usualordinary course consistent with past practice, regular and ordinary course(w) preserve intact its business organization, in substantially the same manner as heretofore conducted and in compliance (x) keep available in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present current officers and employees, and (iiiy) preserve its the present relationships with customers, suppliers, distributors, licensors, licensees, and others those Persons having significant business relationships with which it has business dealingsin all material respects. In additionWithout limiting the generality of the foregoing, except (A) as required or expressly permitted by the terms provisions of this Agreement, and except (B) as provided set forth in Section 7.1 of the Company Disclosure Schedule, without (C) as may be required under applicable Law or (D) with the prior written consent of ParentPurchaser (such consent not to be unreasonably conditioned, during such periodwithheld or delayed), Sellers will not permit the Company shall not do any of the following and shall not permit its subsidiaries to do any of the followingto:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Scheduleits Governing Documents;
(b) Grant merge with or into or consolidate with any severance other Person or termination pay to any officer liquidate or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plandissolve;
(c) Transfer make any distribution or license to declare, pay or set aside any person dividend with respect to, or entity issue, split, combine, redeem, reclassify, purchase or otherwise extendacquire, amend or modify in any material respect any rights to Equity Interest of the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rightsCompany, other than non-exclusive licenses granted as set forth in Article II and Article III;
(d) incur any Indebtedness of the Company or guarantee the Indebtedness of any other Person;
(e) repay any Indebtedness of the Company that is not contemplated to be repaid by this Agreement other than as required by the terms of such Indebtedness and other than in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)business;
(f) Issue, deliver, sell, authorizetransfer, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiariesassign, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Selllicense, lease, license, encumber abandon or otherwise dispose of or pledge (other than Permitted Encumbrances) any properties or of its material assets which are material, individually or in the aggregate, to the business of the Companyany Person, except sales of inventory and used equipment, or the license of the Company's products (i) in the ordinary course of business consistent with past practice or (it being agreed ii) as expressly required by Contracts in force as of the date hereof;
(g) settle or compromise any (excluding any Action relating to Taxes) Action unless such settlement or compromise: (i) relates solely to money damages (A) that Parent shall not unreasonably withhold consent the Company will pay or cause to any non-exclusive license agreement related be paid concurrently with the effectiveness of such settlement or compromise to the extent required by such settlement or compromise, or (B) that do not exceed $50,000 individually, or $250,000, in the aggregate, for all such amounts under this Section 7.1(g), in excess of the amounts of (1) any proceeds received from any insurance policies in connection with such settlement or compromise and (2) the amount of such settlement or compromise specifically reserved for in the Financial Statements (including the notes thereto) of the applicable Company's enterprise ; or (ii) does not contain any restrictions upon the Company that would have a material effect on the business and that Parent's failure or reputation of the Company;
(h) make any material change to reasonably object its financial accounting policies or Accounting Principles, other than as required by GAAP or applicable Law, including to any such agreement within five business days of any request for consent shall constitute such consent)the methodology used to calculate Net Regulatory Capital;
(i) allow Net Regulatory Capital to fall below the Early Warning Thresholds;
(j) Incurmake, assume change or pre-pay revoke any indebtedness for borrowed money, guarantee material Tax election (including an election to change the U.S. federal income tax classification of the Company); adopt or change (or make a request to any indebtedness Taxing Authority to change) any material Tax accounting method or obligation of another person, issue any material annual Tax accounting period; file (other than payroll Tax Returns) or sell amend any debt securities or options, warrants, calls or other rights to acquire any debt securities, material Tax Returns; enter into any "keep well" material Tax allocation agreement, Tax sharing agreement or other Tax indemnity agreement (excluding, for the avoidance of doubt, any Tax indemnity, allocation or sharing in any agreement whose primary subject is not Taxes); settle or compromise any material claim, notice, audit report or assessment in respect of Taxes; surrender any right to maintain claim a material Tax refund; or consent to any financial statement condition extension or enter into any arrangement having the economic effect of any waiver of the foregoing other than (i) statute of limitations period applicable to any material Tax claim or assessment; in connection with each case to the financing of ordinary course trade payables consistent with past practice, (ii) pursuant extent doing so would reasonably be expected to existing credit facilities in have a material adverse impact on Purchaser and its Affiliates after the ordinary course of business, or (iii) as contemplated by this AgreementInitial Closing for a Post-Initial Closing Tax Period;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to ParentContract that would be a Material Contract, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change amend in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business Material Contract, in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, each case other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(tl) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid except in the ordinary course of business, enter into or modify any non-compete or exclusivity arrangements;
(um) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not except as required by law the terms of a Benefit Arrangement, (i) adopt, enter into, terminate or settle materially amend any Benefit Arrangement (or compromise any plan that would be an Benefit Arrangement if in effect on the date hereof), other than amendments in the ordinary course of business, (ii) accelerate the vesting or payment of any rights, compensation or benefits to any Company Employee under any Benefit Arrangement, (iii) make any material tax liability;
increase to any salaries or other form of compensation or benefits payable to any Company Employee whose annual base salary exceeds $150,000, or (wiv) Cancel grant any equity or terminate equity-linked awards or any material insurance policy naming it other severance, retention, bonus, incentive, performance or other incentive compensation to any Company Employee whose annual base salary exceeds $150,000 (other than in the case of this subsection (iv) as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of contemplated by this Agreement);
(xn) Increase (i) hire or engage any Company Employee whose annual base salary exceeds $120,000, other than the aggregate dollar value hiring of inventory owned by distributors in the first an employee to replace a departed Company Employee with similar levels of compensation and second tiers of its distribution channel benefits, or (which has not been "sold through" to end-user customers and which such distributors have the right to returnii) above the aggregate value of such inventory at June 30terminate a salesperson or trader, 1998other than a termination for cause or similar misconduct;
(yo) Begin shipment acquire any business or Person, by merger, consolidation, or otherwise, in a single transaction or a series of related transactions;
(p) make or commit to make any new products to customerscapital expenditures requiring payments over the life of such expenditures, except for alpha versions and not more individually or in the aggregate, in excess of $250,000, other than 50 beta versions as disclosed in Company’s capital expenditure budget set forth in Section 7.1(p) of any product delivered to customers solely for evaluation purposesthe Company Disclosure Schedule; or
(zq) Agree in writing enter any Contract or otherwise agree to take any do anything prohibited by this Section 7.1. Nothing contained in this Agreement will give Purchaser, directly or indirectly, the right to control or direct the operations of the actions described in Section 5.1(a) through (y) aboveCompany or the business of the Company prior to the Final Closing. Prior to the Final Closing, the Company will exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their operations.
Appears in 2 contracts
Samples: Stock Purchase Agreement (AtlasClear Holdings, Inc.), Stock Purchase Agreement (Calculator New Pubco, Inc.)
Conduct of Business by the Company. Except During the period from the date of this Agreement to the Effective Time, except as consented to in writing by Parent (which consent shall not be unreasonably withheld or delayed; and which consent shall be deemed given if the Company has not received written notice otherwise from Parent within five business days after requesting such consent of Parent as provided in Section 4.01(b)) or as specifically contemplated by this Agreement, the Company shall, and shall cause each of its subsidiaries to, carry on their respective businesses in the ordinary course consistent with past practice and use their commercially reasonable efforts to comply with all Applicable Laws and, to the extent consistent therewith, use their commercially reasonable efforts to preserve their material assets and technology, preserve their relationships with PUCs, Health Agencies, customers, suppliers and others having business dealings with them and maintain their material franchises, rights and Permits necessary to the conduct of their business. Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except as consented to in writing by Parent (which consent shall not unreasonably be withheld or delayed; and which consent shall be deemed given if the Company has not received written notice otherwise from Parent within five business days after requesting such consent of Parent as provided in Section 4.01(b)) or as specifically contemplated by this Agreement or as set forth in Section 5.1 4.01(a) of the Company Disclosure Schedule, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following not, and shall not permit any of its subsidiaries to do any of the followingto:
(ai) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(bx) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declaredeclare, set aside or pay any dividends on on, or make any other distributions (whether in cash, stock, equity securities stock or property) in respect of, any of any its capital stock or split, combine other equity or reclassify any capital stock voting interests except for:
(A) dividends by a direct or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any indirect wholly owned subsidiary of the Company's wholly-owned subsidiaries may declare, set aside or pay Company to its shareholders;
(B) regular quarterly cash dividends or make other distributions with respect to their capital stock the Company Common Stock, not in excess of an annual rate of $0.94 per share in 2001, $0.98 per share in 2002 and $1.02 per share in 2003, in each case with usual declaration, record and payment dates and in accordance with the ordinary course of business and consistent with Company’s past practices.dividend policy;
(eC) Purchaseif the Effective Time occurs other than on a record date for quarterly cash dividends with respect to the Company Common Stock, redeem or otherwise acquirea “stub period” dividend equal to an amount not to exceed 25% of the amount of the cash dividend per share permitted to be paid pursuant to the immediately preceding clause (B) during such fiscal year in which the Effective Time occurs multiplied by a fraction, directly or indirectly, any the numerator of which is the number of days between the immediately preceding record date and the Effective Time and the denominator of which is the number of days between such record date and the next regularly scheduled record date;
(D) regular cash dividends with respect to outstanding shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost 5% Cumulative Preferred Stock in connection accordance with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements terms thereof as in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)of this Agreement;
(fE) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options regular cash dividends with respect to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of outstanding shares of Company Common 5% Cumulative Preference Stock pursuant to in accordance with the exercise of Options therefor outstanding terms thereof as of in effect on the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) above.
Appears in 2 contracts
Samples: Merger Agreement (American Water Works Company, Inc.), Merger Agreement
Conduct of Business by the Company. Except as contemplated consented to by this Agreement or as set forth Parent in Section 5.1 of the Company Schedulewriting, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, and the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company shall and each of shall cause its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, their respective business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted course consistent with past practice and in compliance in all material respects with all applicable laws and regulations, regulations and to pay its debts and taxes Taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject and, to good faith disputes over such obligations, and use its commercially best reasonable efforts consistent with past practices and policies to (i) preserve intact its present their current business organizationorganizations, (ii) to keep available the services of its present their current officers and employees, employees and (iii) preserve its their relationships with customersthose persons having business dealings with them, suppliersall with the goal of preserving unimpaired its goodwill and ongoing businesses at the Effective Time. Without limiting the generality of the foregoing, distributors, licensors, licensees, senior officers of Parent and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any meet on a regular basis to review the financial and operational affairs of the following Company and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rightssubsidiaries, acceleratein accordance with applicable law, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant shall promptly notify Parent of any severance event or termination pay to any officer occurrence or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted emergency not in the ordinary course of business its business, and consistent with past practice (it being agreed that Parent any material event involving or adversely affecting the Company or its business. Except as expressly contemplated by this Agreement, the Company shall not, and shall not unreasonably withhold consent to permit any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);its subsidiaries to:
(di) Declareother than between subsidiaries or as between the Company and any wholly owned subsidiary, declare, set aside or pay any dividends on or on, make any other distributions (whether in cashrespect of, or enter into any agreement with respect to its capital stock, equity securities or property(y) in respect of any capital stock or 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 of, or in substitution for any for, shares of its capital stock; provided , except upon the exercise of Company Stock Options or Company Warrants that any are, in each case, outstanding as of the date hereof in accordance with their present terms, or which are issued prior to the Effective Time in the ordinary course, pursuant to the Company's wholly-owned subsidiaries may declare, set aside Second Amended and Restated Employee Stock Purchase Plan ("ESPP") or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(ez) Purchasepurchase, redeem or otherwise acquire, directly or indirectly, acquire any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, other securities thereof or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other securities (other than (i) the issuance, delivery and/or sale of shares issuance of Company Common Stock pursuant to upon the exercise of Company Stock Options therefor and Company Warrants that are, in each case, outstanding as of the date of this Agreement, and hereof in accordance with their present terms);
(ii) issue, deliver, sell, pledge or otherwise encumber or subject to any Lien any shares of its capital stock, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities (other than the grant issuance of employee stock optionsCompany Common Stock upon the exercise of Company Stock Options and Company Warrants that are, consistent with in each case, outstanding as of the Company's established past practice for similarly situated employees, to non-officer employees who are hired date hereof in accordance with their present terms or which are issued in the ordinary course prior to the Effective Time, pursuant to the ESPP, or in connection with financing arrangements permitted under Section 5.1((k4.1(vi));
(giii) Causeamend its certificate of incorporation, permit or propose any amendments to its Certificate of Incorporation, Bylaws by-laws or other charter documents (or similar governing instruments of any of its subsidiaries)comparable organizational documents;
(hiv) Acquire acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or any equity interest in or a material portion of the assets securities of, or by any other manner, any business or any corporationperson, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or for consideration in the aggregate, to the business excess of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement $500,000 (other than offer letters financing transactions involving transfers of assets solely among subsidiaries and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made construction in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures);
(mv) Make sell, lease, license, mortgage or otherwise encumber or subject to any payments outside Lien or otherwise dispose of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its properties or assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except including but not limited to the performance of obligations under contractual arrangements listed on the Company Disclosure Schedule existing as required by a change in law or in GAAP or the rules of the SECdate hereof, make or create any change security interest in accounting methods, principles such assets or practices, including inventory accounting practicesproperties;
(qvi) Make except for borrowings under existing credit facilities or lines of credit or refinancing of indebtedness outstanding on the date hereof, 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, advances or capital contributions to, or investments in, any person other person than its wholly owned subsidiaries and as a result of ordinary advances and reimbursements to employees and endorsements of banking instruments;
(vii) change its accounting methods (or entityunderlying assumptions), principles or practices affecting its assets, liabilities or business, including without limitation, any reserving, renewal or residual method, practice or policy, in each case, in effect at December 31, 1999, except as required by changes in GAAP, or change any of its methods of reporting income and deductions for loans, advances, capital contributions or investments between any wholly-owned subsidiary federal income tax purposes from those employed in the preparation of the federal income tax returns of the Company and for the Company taxable year ending December 31, 1999, except as required by material changes in law or another wholly-owned subsidiary regulation;
(viii) make any tax elections, or settle or compromise any liability with respect to Taxes or agree to any adjustment of the Company and advances of business related expenses (including expenses related to business travel) to employees any Tax attribute, unless required by applicable law or made in the ordinary course and of business consistent with past practicepractices;
(rix) Authorize enter into any agreement, commitment or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, transaction to acquire or that are individually sell real estate for VOI development in excess of $100,000 or 200,000 (other than pursuant to previously existing agreements set forth in the aggregate in excess of $500,000 in any calendar quarterCompany Disclosure Schedule);
(sx) Materially accelerate other than in accordance with the Company's operating budget for fiscal year 2000 which is attached to the Company Disclosure Schedule, enter into any agreement obligating the Company to spend more than $250,000 or delay collection any commitment or transaction of any notes or accounts receivable the type described in advance Section 3.1(f) of or beyond their regular due dates or the dates when the same would have been collected Company Disclosure Schedule hereof not in the ordinary course of business;
(txi) Materially delay other than as set forth in the Company's operating budget for fiscal year 2000, amend or accelerate payment otherwise modify, except in the ordinary course of business, or violate the terms of, any of the material agreements or contracts or other binding obligations of the Company or its subsidiaries;
(xii) alter, or enter into any commitment to alter, its interest in any corporation, association, joint venture, partnership or business entity in which the Company directly or indirectly holds any interest on the date hereof;
(A) grant to any current or former director, executive officer or other Key Employee of the Company or its subsidiaries any increase in compensation, bonus or other benefits, except for (i) salary, wage or benefit increases in the ordinary course of business and (ii) bonuses under the arrangements specifically set forth on Exhibit B hereto, and payable to the persons and in the amounts specifically set forth on such Exhibit B hereto; (B) grant to any such current or former director, executive officer or other Key Employee of the Company any increase in severance or termination pay, (C) enter into, or amend, any employment, deferred compensation, consulting, severance, termination or indemnification agreement with any such current or former director, executive officer or Key Employee or (D) modify any existing equity-based compensation agreement or arrangement with any director, employee, consultant or independent contractor to provide for acceleration of the vesting or payments of benefits thereunder;
(xiv) except pursuant to agreements or arrangements in effect on the date hereof and disclosed in writing and provided or made available to Parent, pay, loan or advance any amount to, or sell, transfer or lease any properties or assets (real, personal or mixed, tangible or intangible) to, or enter into any agreement or arrangement with, any of its officers or directors or any affiliate or the immediate family members or associates of any account payable beyond or in advance of its due date officers or directors other than compensation in the date ordinary course of business consistent with past practice;
(xv) agree or consent to any material agreements or material modifications of existing agreements with any Governmental Entity in respect of the operations of its business, except (i) as required by law to renew Permits or agreements in the ordinary course consistent with past practice, or (ii) to effect the consummation of the transactions contemplated hereby;
(xvi) pay, discharge, settle, compromise or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), including taking any action to settle or compromise any litigation; other than any such liability would have been paid payment, discharge, settlement, compromise or satisfaction in the ordinary course of business in an amount not to exceed $20,000 or any reserve established in respect of a claim as set forth in the Company's unaudited balance sheet dated June 30, 2000;
(xvii) amend the Rights Agreement or redeem the Rights (as defined in the Rights Agreement);
(xviii) cancel, materially amend or renew any insurance policy other than in the ordinary course of business;
(uxix) Settle authorize, or compromise commit or agree to take, any suits of the foregoing actions or claims any other action that would prevent the Company from performing or threatened suits or claims for payments in an aggregate amount in excess of $500,000cause the Company not to perform its covenants hereunder;
(vxx) Make issue any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as communication of a beneficiary or a loss payable payee or permit any such policy general nature to lapse (it being understood that the employees of the Company may renew any insurance policy in effect as without the prior written approval of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel Parent (which has will not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customersbe unreasonably delayed or withheld), except for alpha versions and communications in the ordinary course of business that do not more than 50 beta versions of any product delivered relate to customers solely for evaluation purposesthe Merger or other transactions contemplated hereby; or
(zxxi) Agree in writing take any action or otherwise fail to take any action which would result in any of the actions described representations and warranties set forth in Section 5.1(a) through (y) above3.1 failing to be true and correct.
Appears in 2 contracts
Samples: Merger Agreement (Cendant Corp), Merger Agreement (Cendant Corp)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, terms and the Effective Time, Time or such time as Parent's designees shall constitute a majority of the Board of Directors of the Company, the Company Board, (which for the purposes of this Article 5 shall include the Company and each of its subsidiaries shallsubsidiaries) agrees, except to the extent that Parent shall otherwise consent in writingconsent, to carry on its business, business diligently and in all material respects, accordance with good commercial practice and to carry on its business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, to pay its debts and taxes when due, due subject to good faith disputes over such debts or taxes, to pay or perform in all material respects other material obligations when due, subject to good faith disputes over such obligations, due and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, licensees and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, Agreement (and except other than as provided set forth in Section 5.1 of the Company ScheduleSchedules), without the prior written consent of Parent, during such period, the Company shall not do any of the following following, and shall not permit any of its subsidiaries to do any of the following:
: (ai) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, consultant or director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
plans; (bii) Grant any severance or termination pay to any officer or employee except payments in amounts consistent with policies and past practices or pursuant to written plans or agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to the Company Scheduleother, or adopt any new severance plan;
; (ciii) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual PropertyCompany's intellectual property or other proprietary rights, or enter into grants to future patent, copyright or other intellectual property patent rights, other than non-exclusive licenses granted in the ordinary course of business and business, consistent with past practice practice; (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(div) Declare, set aside Declare or pay any dividends on or make any other distributions (whether in cash, stock, equity securities stock or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) above.
Appears in 2 contracts
Samples: Merger Agreement (MDL Information Systems Inc), Merger Agreement (Golden Gate Acquisitions Inc)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, terms or the Effective Appointment Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted consistent with past practice and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes Taxes when due, due subject to good faith disputes over such debts or taxesTaxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices practice and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, (iii) collect its accounts receivable and any other amounts payable to it when due and otherwise enforce any obligations owed to it by others substantially in accordance with their terms, and (iiiiv) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, the Company will promptly notify Parent in writing of any material event involving its business or operations. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such periodthe period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Appointment Time, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability repurchase of options or restricted stock, or reprice options granted under to any employee, consultant, director or other stock plans person or authorize cash payments in exchange for any options granted under or take any of such plans except pursuant action with regard to written agreements outstanding, any warrant or policies existing, on other right to acquire the date hereof and disclosed in the Company ScheduleCompany's capital stock;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously made available, in the case of written agreements or written policies, or disclosed in writing, in the Company Schedulecase of existing policies, to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rightsProperty Rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)practice;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service employment relationship with any employee, director or consultant employee pursuant to stock option agreements or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)hereof;
(f) Enter into any agreement, obligation or commitment containing covenants purporting to limit or which effectively limit the Company's or any of its subsidiaries' freedom to compete in any line of business and/or in any geographic area or which would so limit Parent, the Company or the Surviving Corporation or any of its subsidiaries after the Effective Time or granting any exclusive distribution or other exclusive rights;
(g) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of Company Options therefor outstanding as of the date of this Agreement, and Company Warrants and (ii) the grant of employee stock options, options granted to newly hired employees consistent in amounts with the Company's established past practice for similarly situated employees, prior practices and having an exercise price at least equal to non-officer employees who are hired in accordance with Section 5.1((k))the fair market value of Company Common Stock on the date any such option is granted;
(gh) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws the Company Charter Documents or other to the charter documents (or similar governing instruments of any of its subsidiaries)subsidiary;
(hi) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) thereof; or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any material joint ventureventures, strategic partnership relationships, alliances, marketing or allianceco-sale agreements or make any material loan or advance to, or investment in, any person, except for loans or capital contributions to a subsidiary or advances of routine business or travel expenses to employees, officers or directors in the ordinary course of business, consistent with past practice;
(ij) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products other than in the ordinary course of business business, consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)practice;
(jk) Incur, assume or pre-pay Incur any indebtedness for borrowed money, money or guarantee any such indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securitiessecurities of the Company or any of its subsidiaries, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing foregoing, other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee benefit plan or employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee director or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentemployee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants consultants, other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments capital expenditures outside of the ordinary course of business in an aggregate excess of $250,000112,500 in the aggregate;
(n) Except in the ordinary course of business, modifyModify, amend or terminate any Company Contract or other material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, modify, amend or extend cancel any contractsdevelopment services, agreementslicensing, or obligations relating to the distribution, salesales, license sales representation or marketing by third parties of the Company's products other similar agreement or products licensed by the Company, obligation with respect to any Intellectual Property Rights other than agreements, extensions such agreements entered into in the ordinary course of business consistent with past practice or amendments that grant non- exclusive rights enter into any contract of a character required to such third parties and provide for termination be disclosed by the Company for convenience on not more than 60 days' noticeSection 3.14;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SECGAAP, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make Discharge, settle or satisfy any loansdisputed claim, advances litigation, arbitration, disputed liability or capital contributions toother controversy (absolute, accrued, asserted or investments inunasserted, contingent or otherwise), including any liability for Taxes, other person than the discharge or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected satisfaction in the ordinary course of business;
(t) Materially delay business consistent with past practice or accelerate payment of any account payable beyond incurred in connection with the transactions contemplated hereby, or in advance accordance with their terms, of its due date liabilities reflected or reserved against in the date such liability would have been paid Company Balance Sheet or incurred since September 30, 2005 in the ordinary course of business;
(u) Settle business consistent with past practice, or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise waive any material tax liability;
(w) Cancel benefits of, or terminate agree to modify in any material insurance policy naming it as respect, any confidentiality, standstill or similar agreements to which the Company or any of its subsidiaries is a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood party; provided, however, that the Company may renew discharge or settlement of any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors disputed claim, liability or other controversy in the first and second tiers amount of its distribution channel (which has less than $162,500 shall not been "sold through" be deemed to end-user customers and which such distributors have be prohibited by the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesforegoing; or
(zr) Agree in writing or otherwise to take any of the actions described in Section Sections 5.1(a) through (y5.1(q) above.
Appears in 1 contract
Conduct of Business by the Company. Except as contemplated by this Agreement or (i) as set forth in Section 5.1 4.1 of the Company Disclosure Schedule, (ii) as otherwise expressly contemplated by this Agreement, (iii) as consented to in advance by Parent in writing, or (iv) as required by applicable law or regulation, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, or the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent and shall otherwise consent in writingcause its Subsidiaries to, carry on its business, in all material respects, their respective businesses in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted course consistent with past practice and in compliance in all material respects with all applicable laws and regulations, pay its their respective debts and taxes Taxes when due, subject to good faith disputes over such debts or taxes, pay or perform their other material respective obligations when due, subject to good faith disputes over such obligationsand, and use its all commercially reasonable efforts consistent with past practices and policies the other terms of this Agreement to (i) preserve intact its present their current business organizationorganizations, (ii) use all commercially reasonable efforts consistent with the other terms of this Agreement to keep available the services of its present their current officers and employeesEmployees and preserve their relationships with those Persons having business dealings with them, all with the goal of preserving unimpaired in all material respects their goodwill and ongoing businesses at the Effective Time. Without limiting the generality of the foregoing, senior officers of Parent and the Company shall meet on a reasonably regular basis to review the financial and operational affairs of the Company and its Subsidiaries, in accordance with applicable law, and the Company shall give due consideration to Parent’s input on such matters, consistent with Section 4.4 hereof, with the understanding that, notwithstanding any other provision contained in this Agreement, Parent shall in no event be permitted to exercise control of the Company prior to the Effective Time. Except as (i) expressly contemplated by this Agreement, (ii) disclosed in Section 4.1 of the Company Disclosure Schedule, (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, consented to in advance by Parent in writing or (iv) except as permitted required by applicable law or regulation, after the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, date hereof the Company shall not do any of the following not, and shall not permit its subsidiaries to do any of the followingits Subsidiaries to:
(ai) Waive any stock repurchase rights, accelerate, amend other than dividends and distributions by a direct or change the period indirect wholly owned Subsidiary of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
to its parent, (bx) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declaredeclare, set aside or pay any dividends on or on, make any other distributions (whether in cash, stock, equity securities or property) in respect of, or enter into any agreement with respect to the voting of, any of any its capital stock (except for (1) quarterly cash dividends not to exceed $0.2025 per share on the Company Common Stock on substantially the same record and payment date schedule as has been utilized in the past, provided that in no event shall the Company declare, set aside or pay dividends on the Company Common Stock if such action would result in the holders of Company Common Stock receiving more than four cash dividend payments in any fiscal year, or more than one cash dividend payment for any fiscal quarter (without taking into account the special cash dividend contemplated by the succeeding clause (2)), when considered in conjunction with dividends to be paid by Parent following the Closing, and (2) one special cash dividend on the Company Common Stock not to exceed $0.25 per share, provided that the Company shall consult with Parent in advance with respect to the declaration, record and payment dates for such dividend), (y) 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 of, or in substitution for any for, shares of its capital stock; provided , except upon the exercise of Company Stock Options that any are outstanding as of the Company's wholly-owned subsidiaries may declaredate hereof in accordance with their present terms, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(ez) Purchasepurchase, redeem or otherwise acquire, directly or indirectly, acquire any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock other securities of the Company or any of its subsidiariesSubsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any such shares or other securities;
(ii) issue, grant, deliver, sell, pledge or otherwise encumber or subject to any Lien (other than Company Permitted Liens) any shares of such its capital stock stock, any other voting securities, including any restricted shares of Company Common Stock, or any securities convertible into shares of capital stockinto, or enter into other agreements any rights, warrants or commitments of any character obligating it options to issue acquire, any such shares shares, voting securities or convertible securities, including any Company Stock Options (other than (i) the issuance, delivery and/or sale of shares issuance of Company Common Stock pursuant to upon the exercise of Company Stock Options therefor that are outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired hereof in accordance with Section 5.1((k))their present terms;
(giii) Causeamend its certificate of incorporation, permit or propose any amendments to its Certificate of Incorporation, Bylaws bylaws or other charter documents (or similar governing instruments of any of its subsidiaries)comparable organizational documents;
(hiv) Acquire (A) acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or any equity interest in or a material portion of the assets securities of, or by any other manner, any business or any corporationPerson, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent but subject to clause (xxi) below with respect to purchasing or selling any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object loans or any mortgage loan servicing rights), (B) open, close, relocate, purchase, lease, sell or acquire any banking or other offices, or file an application with a Governmental Entity pertaining to any such agreement within five business days action or (C) enter into any new line of any request for consent shall constitute such consent)business;
(jv) Incursell, assume lease, license, mortgage or pre-pay otherwise encumber or subject to any indebtedness for borrowed moneyLien (other than Company Permitted Liens), guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect otherwise dispose of any of the foregoing its properties or assets other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities securitizations and other transactions in the ordinary course of business, business consistent with past practices or create any security interest in such assets or properties (iii) as contemplated by this Agreementother than Company Permitted Liens);
(kvi) Hire any employee, except replacements for former non-officer employees, hired the incurring of Permitted Deposit Liabilities (as defined below) in the ordinary course of business consistent with past practice;
, incur any Indebtedness for borrowed money (lincluding any Federal Home Loan Bank borrowings or advances) Adopt or amend issue any employee stock purchase debt securities or employee stock option planassume, guarantee or endorse, or adopt otherwise become responsible for the obligations of any Person (other than the Company or amend any material employee benefit plan, wholly owned Subsidiary thereof) or enter into any employment contract or collective bargaining agreement (repurchase agreements, or, other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any Person other person than its wholly owned Subsidiaries and as a result of ordinary advances and reimbursements to Employees and endorsements of banking instruments;
(vii) change in any material respect its accounting methods (or entityunderlying assumptions), principles or practices affecting its assets, liabilities or business, including any reserving, renewal or residual method, practice or policy, in each case, in effect on the date hereof, except as required by changes in GAAP or regulatory accounting principles, or change any of its methods of reporting income and deductions for loansFederal income tax purposes from those employed in the preparation of the Federal income tax returns of the Company for the taxable year ending December 31, advances2003, capital contributions except as required by changes in law or investments between regulation or as contemplated in Section 4.4 of this Agreement;
(viii) change in any wholly-owned subsidiary material respects its investment or risk management or other similar policies of the Company or any of its Subsidiaries;
(ix) make, change or revoke any Tax election, file any amended Tax Return, enter into any Tax closing agreement, settle or compromise any liability with respect to Taxes (other than in amounts not to exceed $50,000 in the aggregate), agree to any adjustment of any Tax attribute, file any claim for a refund of Taxes, or consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment;
(x) create, renew or amend, or take any other action that may result in the creation, renewal, or amendment, of any agreement or contract or other binding obligation of the Company or its Subsidiaries containing (A) any restriction on the ability of the Company and its Subsidiaries, taken as a whole, to conduct its business as it is presently being conducted or (B) any restriction on the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees its Subsidiaries engaging in the ordinary course and consistent with past practiceany type or activity or business;
(rxi) Authorize or make (A) incur any capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $25,000 individually or $100,000 or in the aggregate aggregate, other than pursuant to binding commitments existing on the date hereof and listed in excess Section 4.1(xi) and other expenditures necessary (following consultation with Parent) to maintain existing assets in good repair or to pay applicable Taxes when due, (B) enter into any agreement obligating the Company to spend more than $25,000 individually or $100,000 in the aggregate, or (C) enter into any agreement, contract, lease or other arrangement of $500,000 the type described in any calendar quarterSection 3.1(f) or Section 3.1(y) of this Agreement;
(sxii) Materially accelerate terminate, amend or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected otherwise modify, except in the ordinary course of businessbusiness consistent with past practice, or knowingly violate the terms of, any of the Company Material Contracts, any of the leases for the Leased Properties or the Third Party Leases or any other material binding obligations;
(txiii) Materially delay except as required by agreements or accelerate payment of any account payable beyond or instruments in advance of its due date or effect on the date such liability would have been paid hereof, alter in any material respect, or enter into any commitment to alter in any material respect, any interest in any corporation, association, joint venture, partnership or business entity in which the Company directly or indirectly holds any equity or ownership interest on the date hereof (other than any interest arising from any foreclosure, settlement in lieu of foreclosure or troubled loan or debt restructuring in the ordinary course of businessbusiness consistent with past practice);
(uxiv) Settle except as contemplated by this Agreement, (A) grant or pay to any current or former director, officer, Employee or consultant any increase in compensation, bonus or other benefits, except for any such salary, wage, bonus or benefit increases (x) as required from time to time by applicable law affecting wages, (y) as required by the terms existing prior to the date hereof of plans or arrangements listed (including a specific description of such terms) in Section 4.1(xiv) of the Company Disclosure Schedule, (z) annual compensation increases to Employees who are not executive officers undertaken in the ordinary course of business consistent with past practice, (B) grant to any such current or former director, officer, Employee or consultant any increase in severance or termination pay (or take any other action that would result in an increase thereto), (C) enter into, or amend, or take any action to clarify any provision of, any Plan or any employment, deferred compensation, consulting, severance, termination or indemnification agreement with any such current or former director, officer, Employee or consultant, except as and when required by applicable law, (D) modify any Company Stock Option, (E) make any discretionary contributions to any pension plan, (F) hire any new employee at an annual compensation in excess of $40,000, except for the hiring of two customer service representatives by Woronoco Insurance Group, Inc., the wages of whom shall be consistent with past practice for comparable positions, (G) hire or promote any employee to a new rank having a title of vice president or other more senior rank or (H) accelerate the vesting or payment of compensation payable or benefits provided or to become payable or provided to any of current or former directors, officers, Employees, consultants or service providers or otherwise pay any amounts, grant any awards or provide any benefits not otherwise due except to the extent expressly permitted above;
(xv) except for loans made on terms generally available to the public and otherwise in compliance with applicable law, make any new loans to, modify the terms of any existing loan to, or engage in any other transactions (other than routine banking transactions) with, any Affiliate Person of the Company or of any of its Subsidiaries;
(xvi) agree or consent to any material agreement or material modifications of existing agreements with any Governmental Entity in respect of the operations of its business, except as required by law;
(xvii) pay, discharge, settle or compromise any suits claim, action, litigation, arbitration or claims proceeding, other than any such payment, discharge, settlement or threatened suits or claims for payments compromise that involves solely money damages in an aggregate amount not in excess of $25,000 individually or $100,000 in the aggregate, and that does not create precedent for other pending or potential claims, actions, litigation, arbitration or proceedings;
(xviii) incur deposit liabilities, other than liabilities incurred in the ordinary course of business consistent with past practice (including its deposit pricing policies) that do not materially change the risk profile of the Company and its Subsidiaries (it being understand that “ordinary course of business” shall not be deemed to include non-retail or “jumbo” certificates of deposit or Brokered Deposits) (“Permitted Deposit Liabilities”);
(xix) make any equity investment or commitment to make such an investment in real estate or in any real estate development project, other than in the ordinary course of business consistent with past practice in connection with foreclosure, settlement in lieu of foreclosure, or troubled loan or debt restructuring;
(xx) originate (i) any loans except in accordance with existing Company lending policies and practices, (ii) residential mortgage loans in excess of $500,000, (iii) 30-year residential mortgage loans whose interest rate, terms, appraisal, and underwriting or other features do not make them immediately available for sale in the secondary market, (iv) unsecured consumer loans in excess of $20,000, (v) commercial business loans in excess of $2,500,000 as to any loan or in the aggregate as to any related loans or loans to related Persons, (vi) commercial real estate first mortgage loans in excess of $2,500,000 as to any loan or in the aggregate as to any related loans or loans to related borrowers, or (vii) modifications and/or extensions of any commercial business or commercial real estate loans in the amounts set forth in (v) and (vi) above;
(vxxi) Make purchase or sell any tax election not required by law loans or settle or compromise any material tax liabilitymortgage loan servicing rights;
(wxxii) Cancel issue any broadly distributed communication of a general nature to Employees (including general communications relating to benefits and compensation) without prior consultation with Parent and, to the extent relating to post-Closing employment, benefit or terminate any material insurance policy naming it as a beneficiary compensation information without the prior consent of Parent (which shall not be unreasonably delayed or a loss payable payee withheld), except for communications that, upon advice of outside counsel, are required by applicable law or permit any such policy to lapse by the requirements of the SEC, AMEX or the IRS (it being understood that in which case the Company may renew shall in any insurance policy event use reasonable best efforts to consult with Parent in effect as advance of such communications), or issue any broadly distributed communication of a general nature to customers without the date prior approval of this AgreementParent (which shall not be unreasonably delayed or withheld), except for communications in the ordinary course of business consistent with past practice that do not relate to the Merger or other transactions contemplated hereby;
(xxxiii) Increase award or authorize the aggregate dollar value award of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to endany Company Stock Options or Company Stock-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998Based Awards;
(yxxiv) Begin shipment create, renew, amend or permit to expire, lapse or terminate or knowingly take any action reasonably likely to result in the creation, renewal, amendment, expiration, lapse or termination of any new products insurance policies referred to customersin Section 3.1(o) except with Parent’s prior written consent, except for alpha versions and which shall not more than 50 beta versions be unreasonably withheld;
(xxv) knowingly take any action or knowingly fail to take any action which would reasonably be expected to result in any of any product delivered to customers solely for evaluation purposesthe conditions of Article VI not being satisfied; or
(zxxvi) Agree in writing authorize, or otherwise commit or agree to take take, any of the actions described in Section 5.1(a) through (y) aboveforegoing actions.
Appears in 1 contract
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant Prior to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted contemplated by the terms any other provision of this Agreement, and except as provided unless the ESOP has previously consented in the Company Schedule, without the prior written consent of Parent, during such periodwriting thereto, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the followingCompany:
(a) Waive any stock repurchase rightswill, accelerateand will cause each of its Subsidiaries to, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted conduct its operations in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declarenormal course, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(lb) Adopt will use its reasonable best efforts, and will cause each of its Subsidiaries to use its reasonable best efforts, to preserve intact their business organizations and goodwill, keep available the services of their respective officers and employees and maintain satisfactory relationships with those persons having business relationships with them;
(c) will not amend its articles of incorporation or amend bylaws or comparable governing instruments;
(d) will, upon the occurrence of any employee stock purchase event or employee stock option plan, change in circumstances as a result of which any representation or adopt warranty of the Company contained in Article 4 would be untrue or amend incorrect in any material employee benefit planrespect if such representation or warranty were made immediately following the occurrence of such event or change in circumstance, promptly (and in any event within two business days of an executive officer of the Company obtaining knowledge thereof) notify the ESOP in writing thereof;
(e) will promptly deliver to the ESOP true and correct copies of any report, statement, application or schedule (including any exhibits thereto) filed with the SEC subsequent to the date of this Agreement;
(f) will not (i) issue any shares of its capital stock other than the issuance of Company Common Shares issuable upon exercise of Company Stock Derivatives outstanding on the date of this Agreement (in accordance with the present terms thereof), effect any stock split or otherwise change its capitalization as it existed on the date hereof, (ii) grant, confer or award any option, warrant, conversion right or other equity rights not existing on the date hereof to acquire any shares of its capital stock, (iii) grant, confer or award any bonuses or other forms of incentive compensation to any officer, director or employee, except for cash bonuses or incentives consistent with past practice or under any existing agreement or automatically under any of the Company Stock Option Plans, (iv) increase any compensation under any employment agreement with any of its present or future officers, directors or employees, except for normal increases for officers and employees consistent with past practice or the terms of such employment agreement, (v) grant any severance or termination pay to, or enter into any employment contract employment, severance or collective bargaining termination agreement with any officer, director or employee or amend any such agreement in any material respect, except for severance arrangements consistent with past practice with respect to officers and employees terminated by the Company, or (vi) adopt any new employee benefit plan or program (including any stock option, stock benefit or stock purchase plan) or amend any existing employee benefit plan or program in any material respect;
(g) will not (i) declare, set aside or pay any dividend or make any other than offer letters distribution or payment with respect to any shares of its capital stock or other ownership interests or (ii) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or capital stock of any of its Subsidiaries, or make any commitment for any such action;
(h) will not, and letter agreements entered into will not permit any of its Subsidiaries to, sell, lease or otherwise dispose of any of its assets (including capital stock of Subsidiaries) or to acquire any business or assets, except for (i) any purchase or sale of inventory undertaken in the ordinary course of business consistent with past practice with employees who are terminable "at will")or (ii) any sale, pay any special bonus lease or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) other disposition of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made assets in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(mi) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate will not incur any material contract amount of indebtedness for borrowed money or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments (other than non-controlling investments in the ordinary course of business) in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-other than a wholly owned subsidiary Subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess issue or sell any debt securities, other than borrowings under existing lines of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected credit in the ordinary course of business;
(tj) Materially delay will not, except in the ordinary course of business, authorize, commit to or accelerate payment make capital expenditures;
(k) will not mortgage or otherwise encumber or subject to any lien any properties or assets except for such of the foregoing as are in the ordinary course of business and would not be reasonably likely to have a Company Material Adverse Effect;
(l) will not enter into or agree to enter into any account payable beyond or in advance contract without the prior written consent of its due date or the date ESOP unless such liability would have been paid contract is in the ordinary course of business;
(um) Settle or compromise any suits or claims or threatened suits or claims will maintain insurance consistent with past practices for payments in an aggregate amount in excess of $500,000its businesses and properties;
(vn) Make will not make any change in its accounting (including tax election not accounting) methods, principles or practices, except as may be required by law generally accepted accounting principles and except, in the case of tax accounting methods, principles or settle practices, in the ordinary course of business of the Company or compromise any material tax liability;of its Subsidiaries; and
(wo) Cancel will not take or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree agree in writing or otherwise to take any action which would make any of the actions described representations or warranties of the Company contained in Section 5.1(a) through (y) abovethis Agreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder.
Appears in 1 contract
Samples: Merger Agreement (STV Group Inc)
Conduct of Business by the Company. Except as set forth on Schedule 4.1 to the Company Disclosure Schedule, as required by applicable law or regulation and except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.1 of the Company ScheduleAgreement, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, and the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Boardshall, the Company and shall cause Target OP and each of its their subsidiaries shall, except to the extent that Parent shall otherwise consent in writingto, carry on its business, in all material respects, their respective businesses in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted course consistent with past practice and in material compliance in all material respects with all applicable laws and regulations, pay its their respective debts and taxes Taxes when due, subject to good faith disputes over such debts or taxes, pay or perform their other material respective obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies the terms of this Agreement to (i) preserve intact its present their current business organizationorganizations, (ii) their current business relationships with their respective suppliers and customers, goodwill, and the Company's status as a REIT, use commercially reasonable efforts consistent with the other terms of this Agreement to keep available the services of its present their current officers and employeesEmployees, all with the goal of preserving unimpaired their goodwill and ongoing businesses at the Effective Time. Without limiting the generality of the foregoing, senior officers of Parent and the Company shall meet on a regular basis as reasonably requested by Parent to review the financial and operational affairs of the Company, Target OP, and (iii) preserve its relationships with customerstheir subsidiaries, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as to the extent permitted by applicable law. Except as set forth on Schedule 4.1 to the terms of this AgreementCompany Disclosure Schedule, as required by applicable law or regulation and except as provided otherwise expressly contemplated by this Agreement or except as previously consented to by Parent in writing, after the Company Scheduledate hereof until the earlier of the termination of this Agreement or the Effective Time, without the prior written consent of Parent, during such periodwhich consent shall not be unreasonably withheld, conditioned or delayed, the Company shall not do any of the following not, and shall not permit its any subsidiaries to do any of the followingto:
(ai) Waive any stock repurchase rights, accelerate, amend other than dividends and distributions by a direct or change the period indirect wholly owned subsidiary of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
or Target OP to its parent (bx) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declaredeclare, set aside or pay any dividends on or on, make any other distributions (whether in cashrespect of, or enter into any agreement with respect to the voting of, any shares of any class or series of its capital stock, equity securities or property(y) in respect of any capital stock or split, combine or reclassify any shares of any class or series of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of of, or in substitution for for, shares of any class or series of its capital stock; provided , except upon the exercise of Company Stock Options or redemption of OP Units that any are outstanding as of the Company's wholly-owned subsidiaries may declaredate hereof, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(ez) Purchasepurchase, redeem or otherwise acquire, directly or indirectly, acquire any shares of capital stock of the Company any class or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any series of its subsidiaries, or any securities convertible into shares of such capital stock, other securities thereof or subscriptions, any rights, warrants or options to acquire any such shares or other securities (other than the issuance of such capital stock Company Common Stock upon the exercise of Company Stock Options or redemption of OP Units that are outstanding on the date hereof in accordance with their present terms);
(ii) issue, deliver or sell any securities convertible into shares class or series of capital stock, or enter into any other agreements voting securities, including, without limitation, any restricted shares of Company Common Stock, or commitments of any character obligating it securities convertible into, or any rights, warrants or options to issue acquire, any such shares shares, voting securities or convertible securities, including, without limitation, any Company Stock Options; other than (i) the issuance, delivery and/or sale of shares upon exercise of Company Common Stock pursuant to the exercise Options or redemption of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k))OP Units;
(giii) Causeamend its charter, permit or propose any amendments to its Certificate by-laws, agreement of Incorporation, Bylaws limited partnership or other charter documents (organizational instrument or similar governing instruments of any of its subsidiaries)agreement;
(hiv) Acquire acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or any equity interest in securities or a material portion of the assets indebtedness of, or by any other manner, any business or any corporationperson, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually for consideration in excess of $500,000 in any one transaction or series of related transactions or $1,500,000 in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(iv) Sellsell, lease, license, mortgage, exchange, transfer or otherwise encumber or subject to any Lien or otherwise dispose of any of its properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipmentassets, or the license of the Company's products create any security interest in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume assets or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Companyproperties, other than agreements, extensions or amendments that grant non- exclusive rights pursuant to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves transactions in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(qvi) Make incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee, indemnify or endorse, or otherwise become directly or indirectly responsible or liable for the obligations of any person or, other than in the ordinary course of business or as otherwise permitted hereunder, make any loans, advances or capital contributions to, or investments in, any person other person or entity, except for loans, advances, capital contributions or investments between any wholly-than its wholly owned subsidiary subsidiaries and as a result of the Company ordinary advances and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) reimbursements to employees in and endorsements of banking instruments. From the ordinary course date hereof through and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in including the Company's existing capital expenditure budgetEffective Time, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected other than in the ordinary course of businessbusiness consistent with past practices, neither the Company, nor any of its subsidiaries shall draw down or borrow any monies pursuant to the Sixth Amended and Restated Revolving Credit Agreement, dated October 31, 2002 among Rose Partnership, L.P., Rose Hotel Investors, Inc., Rose Leasing VII, Inc., Banc of America Securities LLC and Bank of America, N.A.;
(tvii) Materially delay change in any material respect its accounting methods (or accelerate payment of underlying assumptions), principles or practices affecting its assets, liabilities, businesses, inventories, cash flows, revenue or expense recognition policies, estimates, accruals, reserves, guarantees, amortization, discounts, returns, allowances, depreciation, goodwill impairment, consolidation principles, contingencies, intercompany loans, credit collections, including, without limitation, any account payable beyond reserving, renewal, reversal, deferral, valuation or residual method, practice or policy, in advance each case, in effect on the date hereof, except as required by changes in GAAP or regulatory accounting principles, or change in any material respect any of its due date or the date such liability would have been paid methods of reporting income and deductions for Federal income tax purposes from those employed in the ordinary course preparation of businessthe Federal income tax returns of the Company for the taxable year ended December 31, 2002, except as required by changes in law or regulation;
(uviii) Settle make or change any material Tax election, file any material amended Tax Return, enter into any closing agreement or settle or compromise any suits material liability with respect to Taxes, agree to any material adjustment of any Tax attribute, file any claim for a refund of Taxes, or claims consent to any extension or threatened suits waiver of the limitation period applicable to any Tax claim or claims assessment, provided, that for payments purposes of this subparagraph (ix), "material" shall mean affecting or relating to $1,000,000 of taxable income;
(ix) create, renew or amend, or take any other action that may result in the creation, renewal, or amendment, of any agreement or contract or other binding obligation of the Company or any of its subsidiaries containing any material restriction on the ability of the Company or any of its subsidiaries, taken as a whole, to conduct its business as it is presently being conducted;
(A) except in accordance with, and pursuant to, the Company's 2003 capital budget, incur any capital expenditures in an aggregate amount in excess of $500,000250,000 or (B) enter into any agreement obligating the Company or any of its subsidiaries to spend more than $250,000 annually, or $2,000,000 in the aggregate, or undertake any material commitment or material transaction of the type described in Section 3.1(f) of this Agreement, other than in the ordinary course of business consistent with past practice;
(vxi) Make amend or otherwise modify, except in the ordinary course of business, in any tax election adverse respect, or violate the terms of any of the Company Material Contracts or other binding obligations of the Company or its subsidiaries;
(xii) alter in any material respect, or enter into any commitment to alter in any material respect, its interest in any corporation, association, joint venture, partnership or business entity in which the Company directly or indirectly holds any equity or ownership interest on the date hereof (other than in the ordinary course of business consistent with past practice);
(xiii) (A) grant to any current or former director, executive officer or other Employee of the Company or any of its subsidiaries any increase in compensation, perquisites, bonus or other benefits, except for salary, wage, bonus or benefit increases to current Employees who are not executive officers and which are in the ordinary course of business, consistent with past practice, (B) grant to any such current or former director, executive officer or other Employee of the Company or any of its subsidiaries any increase in severance or termination pay, (C) enter into, or amend, or take any action to clarify any provision of, any Employee Plan or any employment, deferred compensation, thrift, stock option, pension, welfare, retirement, consulting, severance, medical, trust, termination or indemnification agreement with any such current or former director, executive officer or other Employee, amend, or otherwise modify, any Company Stock Plan or (D) modify any Company Stock Option or Restricted Stock Grant;
(xiv) except pursuant to agreements or arrangements in effect on the date hereof and disclosed in writing and provided or made available to Parent and except for compensation for service as an officer, Employee or director consistent with past practice, and in all cases solely to the extent permissible under SOXA, pay, loan or advance any amount to, or sell, transfer or lease any properties or assets (real, personal or mixed, tangible or intangible) to, or enter into any agreement or arrangement with, any of its officers or directors or any affiliate or the immediate family members or associates of any of its officers or directors other than compensation in the ordinary course of business consistent with past practice;
(xv) agree or consent to any material amendment or modification of existing agreements with any Governmental Entity in respect of the operations of its business, except (i) as required by law or (ii) to effect the consummation of the transactions contemplated hereby;
(xvi) pay, discharge, settle, compromise or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), including taking any action to settle or compromise any material tax liabilitylitigation, action, suit, case, investigation or proceeding (including, without limitation, those of a judicial, arbitral or governmental mandate) in excess of $100,000 in the aggregate, other than any such payment, discharge, settlement, compromise or satisfaction in the ordinary course of business, consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Documents, or incurred since December 31, 2002 in the ordinary course of business consistent with past practice;
(wxvii) Cancel authorize, or terminate commit or agree to take, any material insurance policy naming it as a beneficiary of the foregoing actions or a loss payable payee or permit any such policy other action that would be reasonably likely to lapse (it being understood that prevent the Company may renew any insurance policy from performing or would be reasonably likely to cause the Company not to perform its covenants in effect this Agreement;
(xviii) except as of the date contemplated by Section 5.5 of this Agreement, issue any broadly distributed communication of a general nature to its Employees, customers or suppliers (including general communications relating to benefits and compensation) without the prior written approval of Parent (which will be provided within 24 hours of submission to Parent), except for communications in the ordinary course of business that do not relate to the REIT Merger or the transactions contemplated by this Agreement;
(xxix) Increase the aggregate dollar value of inventory owned by distributors permit to expire, lapse or terminate or take any action reasonably likely to result in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30expiration, 1998;
(y) Begin shipment lapse or termination of any new products insurance policies referred to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesin Section 3.1(o); or
(zxx) Agree in writing take any action or otherwise fail to take any action which would result in any of the actions described in Section 5.1(a) through (y) aboveconditions of Article VI not being satisfied.
Appears in 1 contract
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant Prior to its terms, the Effective Time, or such time ---------------------------------- except as Parent's designees shall constitute a majority contemplated by any other provision of the Company Boardthis Agreement, unless Newco has previously consented in writing thereto, the Company Company:
(a) will, and will cause each of its subsidiaries shallSubsidiaries to, except to the extent that Parent shall otherwise consent in writing, carry on conduct its business, in all material respects, operations in the usual, regular ordinary and ordinary normal course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices practice;
(b) will use its reasonable best efforts, and policies will cause each of its Subsidiaries to (i) use its reasonable best efforts, to preserve intact its present their business organizationorganizations and goodwill, (ii) keep available the services of its present their respective officers and employees, employees and (iii) preserve its maintain satisfactory relationships with customersthose persons having business relationships with them;
(c) will not amend its certificate of incorporation or by-laws or comparable governing instruments;
(d) will, suppliersupon the occurrence of any event or change in circumstances as a result of which any representation or warranty of the Company contained in Article 4 would be untrue or incorrect if such representation or warranty were made immediately following the occurrence of such event or change in circumstance, distributorspromptly (and in any event within two business days of an executive officer of the Company obtaining knowledge thereof) notify Newco thereof;
(e) will promptly deliver to Newco true and correct copies of any report, licensors, licensees, and others statement or schedule filed with which it has business dealings. In addition, except as permitted by the terms SEC subsequent to the date of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:;
(af) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans will not (i) except pursuant to written agreements outstanding, or policies existing, the exercise of Company Equity Rights and other contractual rights existing on the date hereof and disclosed in pursuant to this Agreement, issue any shares of its capital stock, effect any stock split or otherwise change its capitalization as it existed on the date hereof, (ii) grant, confer or award any option, warrant, conversion right or other Company Schedule;
Equity Rights not existing on the date hereof to acquire any shares of its capital stock, (biii) Grant grant, confer or award any bonuses or other forms of incentive compensation to any officer, director or employee, except for cash bonuses or incentives consistent with past practice or under any existing agreement, (iv) increase any compensation under any employment agreement with any of its present or future officers, directors or employees, except for normal increases for officers and employees consistent with past practice or the terms of such employment agreement, (v) grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Propertyto, or enter into grants any employment, severance or termination agreement with any officer, director or employee or amend any such agreement in any material respect, except for severance arrangements consistent with past practice with respect to future patentofficers and employees terminated by the Company, copyright or (vi) adopt any new employee benefit plan or program (including any stock option, stock benefit or stock purchase plan) or amend any existing employee benefit plan or program in any material respect;
(g) will not (i) declare, set aside or pay any dividend or make any other distribution or payment with respect to any shares of its capital stock or other intellectual property rightsownership interests or (ii) directly or indirectly redeem, other than non-exclusive licenses granted purchase or otherwise acquire any shares of its capital stock or capital stock of any of its Subsidiaries, or make any commitment for any such action;
(h) will not, and will not permit any of its Subsidiaries to, sell, lease or otherwise dispose of any of its assets (including capital stock of Subsidiaries) or to acquire any business or assets, except for (i) any purchase of inventory undertaken in the ordinary course of business, (ii) a sale of a portion or all of the approximately 16 acres of undeveloped land located in Bridgeport, New Jersey, or (iii) in the ordinary course of business and consistent with past practice (it being agreed that Parent shall for an amount not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or exceeding $1,000,000 in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose will not incur any material amount of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness money or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any (other person or entity, except for loans, advances, capital contributions or than non-controlling investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business) in, any other person other than a wholly owned Subsidiary of the Company, or issue or sell any debt securities, other than borrowings under existing lines of credit in the ordinary course of business other than the senior credit facility being negotiated with Xxxxxx Business Credit, a division of Xxxxxx Financial, Inc. ("Xxxxxx"), in the aggregate principal amount of up to $35,000,000;
(tj) Materially delay will not, except pursuant to and in accordance with the capital budget previously disclosed in writing to Newco, authorize, commit to or accelerate payment make capital expenditures;
(k) will not mortgage or otherwise encumber or subject to any lien any properties or assets except for such of any account payable beyond the foregoing as are in the ordinary course of business and would not be reasonably likely to have, individually or in advance the aggregate, a Company Material Adverse Effect;
(l) will not enter into or agree to enter into any contract without the prior written consent of its due date or Newco unless such contract is entered into by the date such liability would have been paid Company for (i) the sale of the Company's accounts receivable to Household Bank (Nevada), N.A. ("Household"), (ii) any purchase of inventory undertaken in the ordinary course of business, (iii) the sale of accounts receivable that are more than 180 days past due; or (iv) any other contract in the ordinary course of business and the total payments by the Company contemplated thereby do not exceed $1,000,000 and have a term of no longer than one year;
(um) Settle or compromise any suits or claims or threatened suits or claims will maintain insurance consistent with past practices for payments in an aggregate amount in excess of $500,000its businesses and properties;
(vn) Make will not make any change in its accounting (including tax election not accounting) methods, principles or practices, except as may be required by law generally accepted accounting principles and except, in the case of tax accounting methods, principles or settle practices, in the ordinary course of business of the Company or compromise any material tax liability;of its Subsidiaries; and
(wo) Cancel will not take or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree agree in writing or otherwise to take any action which would make any of the actions described representations or warranties of the Company contained in Section 5.1(a) through (y) abovethis Agreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder.
Appears in 1 contract
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth otherwise consented to in Section 5.1 of the Company Schedulewriting, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its termsterms or the Closing, the Effective Time, or such time as Parent's designees shall constitute a majority each of the Company Boardand ARWA shall, the Company and shall cause each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writingtheir respective Subsidiaries to, carry on its business, in all material respects, business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulationsLegal Requirements (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes Taxes when due, due (subject to good faith disputes over such debts or taxesTaxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable best efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present key officers and employees, employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In additionWithout limiting the generality of the foregoing, except as required or permitted by the terms of this Agreement, Agreement and except as provided in the Company Schedulerequired by applicable Legal Requirements, without the prior written consent of Parentthe other party (which consent shall not be unreasonably withheld), during such periodthe period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing, each of the Company and ARWA shall not do any of the following not, and shall not permit its subsidiaries to any of their respective Subsidiaries to, do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Scheduleplans;
(b) Grant any material severance or termination pay to (i) any officer or employee (ii) any employee, except pursuant to applicable law, written agreements outstanding, or policies existing, existing on the date hereof and disclosed in the Company Schedulehereof, or adopt any new material severance plan, or amend or modify or alter in any manner any material severance plan, agreement or arrangement existing on the date hereof;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company any Intellectual Property, Property or enter into grants to transfer or license to any person future patent, copyright or other intellectual property patent rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed provided that Parent in no event shall not unreasonably withhold consent to the Company Group or ARWA license on an exclusive basis or sell any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);Intellectual Property; NY:1824684.16
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) property in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock or other equity securities or ownership interests of the Company Group or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)ARWA;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber encumber, or agree to any of the foregoing with respect to, any shares of the capital stock of the Company or any of its subsidiaries, other equity securities or ownership interests or any securities convertible into or exchangeable for shares of such capital stockstock or other equity securities or ownership interests, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or other equity securities or ownership interests or any securities convertible into or exchangeable for shares of capital stockstock or other equity securities or other ownership interests, or enter into other agreements or commitments of any character obligating it to issue any such shares shares, equity securities or other ownership interests or convertible or exchangeable securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) CauseAmend its Charter Documents, permit or propose other than any amendments amendment by ARWA necessary to its Certificate extend the time for ARWA to complete an initial business combination and to provide the holders of Incorporation, Bylaws or other charter documents (or similar governing instruments Public Shares the opportunity to convert their shares into a pro rata portion of any of its subsidiaries)the Trust Fund in connection therewith;
(h) Acquire Other than the Contingent Acquisitions and the acquisition of Aevitas or in the ordinary course of business, acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof orthereof, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of ARWA or the Company Group, as applicable, or enter into any joint ventureventures, strategic partnership partnerships or alliancealliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s ability to compete or to offer or sell any products or services; it being acknowledged and agreed that, for purposes of this paragraph, “material” includes the requirement that, as a result of such transaction, financial statements of the acquired, merged or consolidated entity be included in the Proxy Statement/Prospectus;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets, except (A) in the ordinary course of business, and (B) the sale, lease or disposition (other than through licensing) of property or assets which that are not material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)party;
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "“at will"”), pay any special bonus or special remuneration to any director, employee director or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentemployee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants consultants, in each case except in the ordinary course of business or to conform to the requirements of any applicable law; NY:1824684.16
(k) Pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than normal periodic salary increases for non-officer employees made the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms, of the APG Loan and any liabilities recognized or disclosed in the most recent Financial Statements or in the financial statements included in the ARWA SEC Reports filed prior to the date of this Agreement, as applicable, or incurred since the date of such financial statements in the ordinary course of business, consistent with past practiceor waive the benefits of, or change agree to modify in any material respect manner, terminate, release any management policies person from or proceduresknowingly fail to enforce any confidentiality or similar agreement to which the Company is a party or of which the Company is a beneficiary or to which ARWA is a party or of which ARWA is a beneficiary, as applicable;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(nl) Except in the ordinary course of business, modify, amend or terminate any material contract Company Contract or agreement to which the Company or any subsidiary thereof is a party ARWA Contract, as applicable, or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(om) Enter intoExcept as required by IFRS, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(qn) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected Except in the ordinary course of business, incur or enter into any agreement, contract or commitment requiring such party to pay in excess of $300,000 in any 12 month period;
(to) Materially delay Settle any litigation where the consideration given is other than monetary or accelerate payment to which an Insider of ARWA or the Company Group, as applicable, is a party;
(p) Make or rescind any account payable beyond Tax elections that, individually or in advance the aggregate, could be reasonably likely to adversely affect in any material respect the Tax liability or Tax attributes of its due date such party, settle or the date such compromise any material income tax liability would have been paid or, except as required by applicable law, materially change any method of accounting for Tax purposes;
(q) Form or establish any subsidiary except in the ordinary course of businessbusiness or as contemplated by this Agreement;
(r) Permit any Person to exercise any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such plans;
(s) Make capital expenditures except in accordance with prudent business and operational practices; NY:1824684.16
(t) Make or omit to take any action which would to have a Material Adverse Effect;
(u) Settle Enter into any transaction with or compromise distribute or advance any suits assets or claims property to any of its officers, directors, partners, stockholders, managers, members or threatened suits or claims for payments in an aggregate amount in excess other Subsidiaries other than the payment of $500,000;
(v) Make any salary and benefits and tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors distributions in the first and second tiers ordinary course of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesbusiness consistent with prior practice; or
(zv) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 5.1(a5.1 (a) through (yv) above.
Appears in 1 contract
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during For the period from commencing on the date of this Agreement hereof and continuing until ending on the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company BoardClosing Date, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, will except as permitted by the terms of this Agreement, expressly required hereby and except as provided otherwise consented to in advance in writing by the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the followingPurchaser:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed conduct its businesses in the Company ScheduleOrdinary Course and not engage in any new line of business or enter into any agreement, transaction or activity or make any commitment with respect to the Company, except those in the Ordinary Course and not otherwise prohibited under this Section 6.1;
(b) Grant any severance or termination pay make reasonable good faith efforts to any officer or employee except pursuant to written agreements outstandingpreserve intact the goodwill and business organization of the Company, or policies existing, on keep the date hereof officers and disclosed in employees of the Company Scheduleavailable to the Purchaser and preserve the relationships and goodwill of the Company with clients, or adopt any new severance planvendors, employees and other Persons having business relations with the Company;
(c) Transfer maintain its existence and good standing in its jurisdiction of organization and in each jurisdiction in which the ownership or license to any person leasing of its property or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course conduct of its business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any requires such agreement within five business days of any request for consent shall constitute such consent)qualification;
(d) Declareduly and timely file or cause to be filed all reports and Tax Returns required to be filed with any Governmental Entity and promptly pay or cause to be paid when due all Taxes, set aside assessments and governmental charges, including interest and penalties levied or pay any dividends assessed, unless diligently contested in good faith by appropriate proceedings;
(e) maintain in existing condition and repair (ordinary wear and tear excepted), consistent with past practices, all buildings, offices, shops and other structures located on or make any the Leased Real Property, and all equipment, fixtures and other distributions tangible personal property (whether in cashlocated on the Leased Real Property or otherwise);
(f) other than as required pursuant to the exercise of Stock Options outstanding on the date hereof, or the issuance of Series AC Preferred Stock pursuant to Section 6.14, not authorize for issuance or issue and deliver any additional shares of its capital stock, equity or securities convertible into or property) in respect exchangeable for shares of its capital stock, or issue or grant any right, option or other commitment for the issuance of shares of its capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance shares of any other securities in respect of, in lieu of or in substitution for any its capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit not amend or propose any amendments to modify its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments other than the filing of any of its subsidiariesthe Restated Certificate);
(h) Acquire not declare any dividend, pay or agree to acquire by merging or consolidating with, or by purchasing set aside for payment any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association dividend or other business organization distribution or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree make any payment to acquire any assets which are material, individually or related parties other than the payment of salaries in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or allianceOrdinary Course;
(i) Sellnot create any subsidiary, lease, license, encumber acquire any capital stock or otherwise other equity securities of any corporation or acquire any equity or ownership interest in any business or entity;
(j) not dispose of or permit to lapse any properties right to the use of any patent, trademark, trade name, service xxxx, license or assets which are materialcopyright of the Company (including any of the Company Intellectual Property), individually or dispose of or disclose to any Person, any trade secret, formula, process, technology or know-how of the Company not heretofore a matter of public knowledge;
(k) not (i) sell any asset, (ii) create, incur or assume any indebtedness, (iii) grant, create, incur or suffer to exist any Lien on any asset of the Company that did not exist on the date hereof, (iv) incur any liability or obligation (absolute, accrued or contingent), except in the aggregateOrdinary Course, to (v) write-off any guaranteed check, note or account receivable, except in the business Ordinary Course, (vi) write-down the value of any asset or investment on the books or records of the Company, except sales of inventory for depreciation and used equipmentamortization in the Ordinary Course, (vii) cancel any debt or waive any claim or right, (viii) make any commitment for any capital expenditure to be made on or following the date hereof, or (ix) enter into any Contract (A) involving an annual commitment or annual payment to or from the license Company of more than $15,000 individually, (B) that could result in liability to the Company's products Company in excess of $50,000 or (C) that is outside the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related Ordinary Course or otherwise material to the Company's enterprise business ;
(l) not increase in any manner the compensation, bonus opportunity or benefits of, or enter into any new compensation, bonus or incentive agreement or arrangement with, any of its employees, officers, directors, consultants, independent contractors, contingent workers, leased employees, or other service providers;
(m) not adopt, amend or terminate any Company Benefit Plan or increase the benefits provided under any Company Benefit Plan, adopt any plan that would be a Company Benefit Plan if adopted prior to the date hereof or promise or commit to undertake any of the foregoing in the future;
(n) not amend or terminate any existing employment, severance, termination, change in control, consulting, or other compensation agreement or enter into any new employment, severance, termination, change in control, consulting or other compensation agreement;
(o) not enter into a collective bargaining agreement;
(p) continue to extend clients credit, collect accounts receivable and pay accounts payable and similar obligations in the Ordinary Course;
(q) perform in all material respects all of its obligations under, and not default or suffer to exist any event or condition that Parent's failure with notice or lapse of time or both could constitute a default under, any Company Contract (except those being contested in good faith) and not enter into, assume or amend any Contract or commitment that is or would be a Company Contract other than in the Ordinary Course;
(r) not pay, discharge or satisfy any claim, liability or obligation (absolute, contingent or otherwise) other than the payment, discharge or satisfaction in the Ordinary Course of claims, liabilities and obligations reflected or reserved against in the Financial Statements or incurred in the Ordinary Course;
(s) not increase any reserves for contingent liabilities (excluding any adjustment to reasonably object to any such agreement within five business days of any request for consent shall constitute such consentbad debt reserves in the Ordinary Course);
(jt) Incur, assume maintain in full force and effect and in the same amounts policies of insurance comparable in amount and scope of coverage to that now maintained by or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any on behalf of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this AgreementCompany;
(ku) Hire any employee, except replacements for former non-officer employees, hired continue to maintain its books and records in the ordinary course of business accordance with GAAP consistently applied and on a basis consistent with the Company’s past practice;
(lv) Adopt continue its cash management practices in the Ordinary Course;
(w) not make or amend change any employee stock purchase or employee stock option planelection relating to Taxes, or change an annual accounting period, adopt or amend change any material employee benefit planaccounting method, or file any amended Tax Return, enter into any employment contract closing agreement, settle any Tax claim or collective bargaining agreement (other than offer letters and letter agreements entered into in assessment relating to the ordinary course Company, surrender any right to claim a refund of business consistent with past practice with employees who are terminable "at will")Taxes, pay any special bonus or special remuneration consent to any directorextension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company, employee or consultant except pursuant take any other similar action relating to written agreements outstanding the filing of any Tax Return or the payment of any Tax; and
(x) not authorize, or commit or agree to take, any of the foregoing actions that are prohibited by this Section 6.1. In connection with the continued operation of the Company during the period commencing on the date hereof and previously disclosed ending on the Closing Date, the Company shall be available to confer in writing to Parentgood faith on a regular and frequent basis with the Purchaser regarding operational matters and the general status of on-going operations of the Company. The Company and the Major Stockholder hereby acknowledge that the Purchaser does not and shall not waive any right it may have hereunder as a result of such consultations. The Company and the Major Stockholder shall not, or increase and shall not cause the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of Company to, take any of its directorsaction that would reasonably be expected to, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change result in any material respect any management policies representation or procedures;
(m) Make any payments outside warranty of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating the Major Stockholder set forth herein to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) abovebecome untrue.
Appears in 1 contract
Samples: Merger Agreement (PRGX Global, Inc.)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during During the period from the date of this Agreement hereof and continuing until the earlier of the termination of this Agreement pursuant to its terms, terms or the Effective Time, or such time as Parent's designees shall constitute a majority of the Company BoardClosing, the Company and each of its subsidiaries Subsidiaries shall, except as otherwise expressly contemplated by this Agreement, Disclosure Schedule or required to consummate the transaction contemplated hereunder, or to the extent that Parent the Purchaser shall otherwise consent in writing, (i) carry on its business, in all material respects, business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and consistent with the Company’s plan’s for managing its business and other operations and in material compliance in all material respects with all applicable laws and regulations, (ii) pay its debts and taxes Taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject (iii) make no material change to good faith disputes over such obligationsthe compensation arrangement or agreement with the Chief Executive Officer and other key employees of the Company, (iv) not sell, assign or transfer any material Company Intellectual Property other than in the ordinary course of business, (iv) not initiate and shall use commercially reasonable efforts to not allow, any material change or amendment to, or termination of, a material contract to which the Company or a Subsidiary is a party (other than termination through ordinary course expiration of its terms), (v) not declare or pay any dividends, and (vi) use its commercially reasonable efforts consistent with past practices and policies and its existing restructuring plans to (ix) preserve substantially intact its present business organization, (iiy) keep available the services of its present executive officers and employees, and (iiiz) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do promptly notify in writing the Purchaser of any of the following and shall not permit its subsidiaries event that it believes could reasonably be expected to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant lead to written agreements outstanding, or policies existing, a Material Adverse Effect on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) above.
Appears in 1 contract
Conduct of Business by the Company. Except During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, each of the Company and its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld), carry on its business in the usual, regular and ordinary course of business, in substantially the same manner as contemplated heretofore conducted and in compliance in all material respects with all applicable Legal Requirements, pay its debts and Taxes in the ordinary course of business consistent with past practice, subject to good faith disputes over such debts or Taxes, and pay or perform other material obligations in the ordinary course of business consistent with past practice, and use its commercially reasonable efforts consistent with past practice to (i) preserve intact its present business organization and (ii) continue to manage in the ordinary course of business its business relationships with third parties. In addition, except as permitted by the terms of this Agreement or as set forth in Section 5.1 Part 4.1 of the Company Disclosure Schedule, without the prior written consent of Parent (which consent shall not be unreasonably withheld), during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, terms or the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or repurchase of restricted stock, or reprice options granted under to any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under or take any of such plans except pursuant action with regard to written agreements outstanding, any warrant or policies existing, on the date hereof and disclosed in the Company Scheduleother right to acquire capital stock;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously made available or disclosed in the Company Schedulewriting to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rightsProperty Rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)business;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiariesstock, except repurchases of unvested shares at cost in connection with the termination of the employment or service relationship with any employee, director employee or consultant service provider pursuant to stock option agreements or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of Company Options therefor outstanding and Company Warrants, (ii) shares of Company Common Stock issuable to participants in the Company ESPP consistent with the terms thereof, or (iii) granting to employees or other service providers (other than directors or officers of the Company) Company Options to acquire no more than the number of shares set forth in Part 4.1(f) of the Company Disclosure Schedule under the Company Option Plans that are existing as of the date hereof in the ordinary course of this Agreement, and (ii) the grant of employee stock options, business consistent with the Company's established past practice in connection with periodic compensation reviews, ordinary course promotions or to new hires; provided that no Company Options permitted to be granted under this clause (iii) may provide for similarly situated employeesany acceleration of any benefit, to non-officer employees who are hired in accordance with Section 5.1((k))directly or indirectly, as a result of the transactions contemplated by this Agreement or any termination of employment or service thereafter;
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws the Company Charter Documents or other to the charter documents (or similar governing instruments of any subsidiary of its subsidiaries)the Company;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other association, business organization or other person or division thereof or, except as permitted by Section 5.1((m)) thereof; or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any material joint ventureventures, strategic partnership relationships or alliancealliances or make any material loan or advance to, or investment in, any person, except for loans or capital contributions to a subsidiary or advances of routine business or travel expenses to employees, officers or directors in the ordinary course of business consistent with past practice;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay Incur any indebtedness for borrowed money, money or guarantee any such indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securitiessecurities of the Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, in the ordinary course of business or (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employeeAdopt or, except replacements for former non-officer employeesas required by applicable Legal Requirements, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase Company Employee Plan, Employee Agreement or employee stock option plan, or adopt or amend any material other employee benefit plan or equity plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee director or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentemployee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practiceconsultants, or change in any material respect any management policies or procedures, other than salary increases for employees (other than officers and directors) in the ordinary course of business consistent with past practice;
(l) Make any capital expenditures in excess of $250,000 in the aggregate;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modifyModify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party Contract or waive, release or assign any material rights or claims thereunder, except in the ordinary course of business consistent with past practice;
(n) Enter into, modify, amend or cancel any material development services, licensing, distribution, purchase, sales, sales representation or other similar agreement or obligation with respect to any material Company Intellectual Property Rights or enter into any contract of a character required to be disclosed by Section 2.16 (except for contracts of a character required to be disclosed by subsections (g) and (l) of Section 2.16 and, to the extent addressed by (g) or (l), subsection (o) of Section 2.16, and entered into in the ordinary course of business);
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets or, except as required by GAAP, make any change in tax or accounting methods, principles or practices;
(p) Discharge, settle or satisfy any disputed claim, litigation, arbitration, disputed liability or other controversy (absolute, accrued, asserted or unasserted, contingent or otherwise), including any liability for Taxes, other than the booking of reserves discharge or satisfaction in the ordinary course of business and consistent with past practices) orpractice, except as required by a change in law or in GAAP accordance with their terms, of liabilities reflected or reserved against in the rules Company Balance Sheet or incurred since December 29, 2006 in the ordinary course of business consistent with past practice, or waive any material benefits of, or agree to modify in any material respect, any confidentiality, standstill or similar agreements to which the SECCompany or any of its subsidiaries is a party; provided, make however, that the discharge or settlement of any change disputed claim, liability or other controversy in accounting methods, principles or practices, including inventory accounting practicesthe amount of less than $250,000 shall not be deemed to be prohibited by the foregoing;
(q) Make any loansExcept as otherwise contemplated by Sections 2.23 and 5.12, advances redeem the Rights or capital contributions to, amend or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of terminate the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practiceRights Agreement;
(r) Authorize Take any action that is intended or make capital expenditures beyond those provided in would reasonably be expected to prevent or materially impede the Company's existing capital expenditure budgetconsummation of any of the transactions contemplated by this Agreement, including with respect to the Rights Agreement or any other "poison pill" or similar plan, agreement or arrangement, any other anti-takeover measure, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarterTakeover Statute;
(s) Materially accelerate Take any action that is intended or delay collection of would reasonably be expected to result in any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors conditions set forth in the first and second tiers of its distribution channel (which has Article 6 not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesbeing satisfied; or
(zt) Agree in writing or otherwise to take any of the actions described in Section 5.1(a4.1(a) through (y4.1(s) above.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Inverness Medical Innovations Inc)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during (a) During the period from commencing with the date execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to its terms, terms or the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except Company will promptly notify Parent of any material event involving its business or operations.
(b) Except as permitted or required by the terms of this Agreement, and except or as provided set forth in Section 4.1 of the Company Schedule, without the prior written consent of ParentDisclosure Letter, during such periodthe period commencing with the execution and delivery of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, the Company shall not do any of the following following, and shall not permit any of its subsidiaries to do any of the following, except to the extent that Parent shall otherwise consent in writing:
(ai) Waive waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Scheduleplans;
(bii) Grant grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in the Company Schedulewriting or made available to Parent, or adopt any new severance plan, or amend or modify or alter in any respect any severance plan, agreement or arrangement existing on the date hereof, or grant any equity-based compensation (except as permitted by Section 4.1(b)(iv) hereof), whether payable in cash or stock;
(ciii) Transfer transfer or license to any person or entity entity, or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants any agreements or make other commitments or arrangements to grant, transfer or license to any person future patent, copyright or other intellectual property rights, patent rights other than non-exclusive licenses granted to end-users in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)practice;
(div) Declaredeclare, set aside or pay any dividends on on, or make any other distributions (whether in cash, stock, equity securities or property) in respect of of, any capital stock of the Company or any of its subsidiaries, or split, combine or reclassify any such capital stock stock, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any such capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(ev) Purchasepurchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or any of its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service employment relationship with any employee, director or consultant employee pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)hereof;
(fvi) Issueissue, deliver, sell, authorize, pledge or otherwise encumber (or propose any of the foregoing with respect to) any shares of the capital stock of the Company or of any subsidiaries of its subsidiaries, the Company or any securities convertible into into, or exercisable or exchangeable for, shares of such capital stock, or any subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any kind or character obligating it the Company or any of its subsidiaries to issue any shares of such capital stock or securities convertible, or exercisable or exchangeable for, shares or convertible securitiesof such capital stock, other than (iA) the issuance, delivery and/or sale of (x) shares of Company Common Stock pursuant to the exercise of Options stock options therefor outstanding as of on the date of this Agreement, and (iiy) shares of Company Common Stock issuable to participants in the Employee Stock Purchase Plan consistent with the terms thereof, and (B) the grant granting of employee stock options, in the ordinary course of business and consistent with the Company's established past practice for similarly situated employeespractices, to non-officer newly hired employees who are hired not executive officers of the Company in accordance with an aggregate amount not to exceed the amount set forth in Section 5.1((k))4.1 of the Company Disclosure Letter;
(gvii) Causecause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(hviii) Acquire acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, limited liability company, general or limited partnership, business trust, unincorporated association or other business organization organization, entity or division thereof orthereof, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually all or in the aggregate, to the business substantially all of the Company assets of any of the foregoing, or purchase any equity interest in any of the foregoing or enter into any joint ventureventures, strategic partnership partnerships or alliancesimilar alliances;
(iix) Sellsell, lease, license, encumber or otherwise dispose of any properties or assets, except sales of inventory in the ordinary course of business consistent with past practice, and except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of the Company, except sales of inventory Company and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)its subsidiaries;
(jx) Incur, assume or pre-pay incur any indebtedness for borrowed money, money or guarantee any such indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securitiessecurities of the Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing foregoing, other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(kxi) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt adopt or amend any employee benefit plan, policy or arrangement, or employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into into, in the ordinary course of business and consistent with past practice practice, with newly hired employees who are terminable "at will"" and who are not officers of the Company), pay any special bonus or special remuneration to any director, employee director or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentemployee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants consultants;
(A) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute or contingent, asserted or unasserted, accrued or unaccrued, or otherwise) or litigation (whether or not commenced prior to the date of this Agreement), other than normal periodic salary increases for non-officer employees made the payment, discharge, settlement or satisfaction, in the ordinary course of business, business consistent with past practicepractice or in accordance with their terms as in existence as of the date hereof, or change (B) waive the benefits of, agree to modify in any material respect manner, terminate, release any management policies person from or proceduresknowingly fail to enforce any confidentiality or similar agreement to which the Company or any of its subsidiaries is a party or of which the Company or any of its subsidiaries is a beneficiary;
(mxiii) Make make any payments outside of the ordinary course of business in an aggregate excess of $250,000;300,000 in the case of any individual or series of related payments, or $1,000,000 in the aggregate, excluding payments permitted by this Section 4.1.
(nxiv) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof of its subsidiaries is a party party, or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(oxv) Enter enter into, amend renew or extend modify any contracts, agreements, agreements or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products of the Company or any of its subsidiaries, or products licensed by the CompanyCompany or any of its subsidiaries, other than agreementsnon-exclusive contracts, extensions agreements or amendments that grant non- exclusive rights to such third parties and provide for termination obligations which may be cancelled by the Company for convenience on not more than 60 days' noticewithout penalty and with prior notice of sixty (60) days or less;
(pxvi) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules GAAP, revalue any assets of the SECCompany or any of its subsidiaries, or make any change in accounting methods, principles or practices, including inventory accounting practices;
(qxvii) Make incur or enter into any loansagreement, advances contract or capital contributions to, other commitment or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and arrangement requiring the Company or another wholly-owned subsidiary any of the Company and advances of business related expenses (including expenses related its subsidiaries to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually payments in excess of $100,000 300,000 in any individual case, or $1,000,000 in the aggregate aggregate;
(xviii) engage in any action that could reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(xix) engage in any action with the intent to, directly or indirectly, adversely impact or materially delay the consummation of the Merger or any of the other transactions contemplated by this Agreement; or
(xx) hire any employee with an annual compensation level in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected 100,000, except for employees who are not executive officers and are hired on an "at-will" basis in the ordinary course of businessbusiness consistent with past practices;
(txxi) Materially delay make any Tax election that is reasonably likely to adversely affect in any material respect the Tax liabilities or accelerate payment Tax attributes of the Company or any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law subsidiaries, or settle or compromise any material tax income Tax liability, or consent to any extension or waiver of any limitations period with respect to Taxes;
(wxxii) Cancel other than fees payable to pursuant to the engagement letter referred to in Section 2.18 hereof, make any individual or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as series of related payments outside of the date ordinary course of this Agreement)business (including payments to legal, accounting or other professional service advisors) in excess of $1,000,000 in the aggregate;
(xxxiii) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree agree in writing or otherwise to take any of the actions described in Section 5.1(a4.1(b)(i) through (y) aboveSection 4.1(b)(xxii), inclusive.
Appears in 1 contract
Conduct of Business by the Company. Except as contemplated by ---------------------------------- this Agreement or as set forth otherwise approved by Parent in Section 5.1 of the Company Schedulewriting, during the period from commencing with the date execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to its terms, Article VIII hereof or the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each ------------ of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, (i) carry on its business, in all material respects, business in the usual, regular and ordinary course, course and in substantially the same manner as heretofore conducted and in material compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, due subject to good faith disputes over such debts or taxes, (ii) pay or perform other material obligations when due, subject to good faith disputes over such obligations, and (iii) use its all commercially reasonable efforts consistent with past practices and policies to (iA) preserve intact its present business organization, (iiB) keep available the services of its present officers and employees, and (iiiC) preserve its relationships with customers, suppliers, distributors, licensors, licensees, licensees and others other persons with which it has significant business dealings. In additionaddition to the foregoing, except (i) as permitted by the terms of this Agreement, and except (ii) as provided set forth in Section 5.1 of the Company Schedule, without or (iii) as otherwise ----------- approved by Parent in writing (which approval shall not be unreasonably withheld or delayed), at all times during the prior written consent period commencing with the execution and delivery of Parent, during such periodthis Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article VIII ------------ hereof or the Effective Time, the Company shall not do any of the following and shall not permit any of its subsidiaries to do any of the following:
(a) Waive waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options Company Stock Options or restricted stock, or reprice options Company Stock Options granted under any employee, consultant, director or other stock plans Company Stock Option Plans, or authorize cash payments in exchange for any options Company Stock Options granted under any of such plans employee, consultant, director or other Company Stock Option Plans;
(b) grant any severance or termination pay or benefits, or payments or benefits triggered by a change of control or merger, to any officer or employee of the Company, except pursuant to written agreements outstanding, or written policies existing, on the date hereof and as previously disclosed in the Company Schedule;
(b) Grant any severance writing or termination pay delivered to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company ScheduleParent, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof;
(c) Transfer other than in the ordinary course of business, transfer or license to any person or entity person, or otherwise extend, amend or modify in any material respect modify, any rights to the Company Intellectual Property, or enter into grants to future patent, copyright transfer or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent license to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)person future patent rights;
(d) Declaredeclare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock stock, or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(e) Purchasepurchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiariesstock, except repurchases of unvested shares at cost in connection with the termination of the service employment relationship with any employee, director or consultant employee pursuant to stock option a Company Stock Option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)hereof;
(f) Issueissue, deliver, sell, authorize, pledge or otherwise encumber (or propose any of the foregoing) any shares of the capital stock of the Company or any of its subsidiariesother securities convertible into, or any securities convertible into exercisable or exchangeable for, shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any other securities convertible into into, or exercisable or exchangeable for, shares of capital stock, or enter into other agreements or commitments of any character Contract obligating it to issue any such shares of capital stock or securities convertible securitiesinto, or exercisable or exchangeable for, shares of capital stock, or issue or grant any other equity-based compensation award (whether payable in cash and/or stock), other than (i) the issuance, delivery and/or sale issuance of shares of Company Common Stock pursuant to the exercise of Company Stock Options therefor and Company Warrants outstanding as of the date of this Agreementhereof, and (ii) the grant issuance of employee stock options, shares of Company Common Stock issuable to participants in the Company ESPP consistent with the Company's established terms thereof, or (iii) the granting of Company Stock Options to newly-hired employees of the Company (other than directors, officers and other executive level employees) in the ordinary course of business consistent with past practice in an amount not to exceed 50,000 shares of Company Common Stock in the aggregate, or 5,000 shares of Company Common Stock in any individual case; provided, however, that (x) none of such Company Stock Options, pursuant to their respective terms, will vest or be exercised prior to January 1, 2002, (y) the recipients of each such Company Stock Option waives any and all rights to acceleration of the vesting of such Company Stock Options under the applicable Company Option Plan, and (z) the agreement pursuant to which each such Company Stock Option is granted does not provide for similarly situated employees, to non-officer employees who are hired acceleration in accordance with Section 5.1((k))any circumstance;
(g) Causecause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (the Company Charter Documents or similar governing instruments of any of its subsidiaries);
(h) Acquire acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization person or division thereof orthereof, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire enter into any joint ventures, strategic partnerships or alliances;
(i) sell, lease, license, encumber or otherwise dispose of any properties or assets, except for sales of inventory in the ordinary course of business or the sale, lease or disposition (other than through licensing permitted by Section 5.1(c) hereof) of property or assets which are not -------------- material, individually or in the aggregate, to the business of the Company or enter into any joint ventureand its subsidiaries, strategic partnership or alliancetaken as a whole;
(ij) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products other than in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold business, enter into, modify, amend or terminate any existing lease, license or contract affecting the use, possession or operation of any properties or assets, or grant or otherwise create or consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days creation of any request for consent shall constitute such consent)lien on or affecting any owned or leased property or any portion thereof, or convey, assign, sublease, license or otherwise transfer all or any portion of any owned or leased property or any interest or rights therein;
(jk) Incur, assume or pre-pay incur any indebtedness for borrowed money, or guarantee any such indebtedness or obligation of another person, or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securitiessecurities of the Company, or enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business working capital consistent with past practice;
(l) Adopt adopt or amend any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than (i) offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"" and (ii) employment obligations to foreign employees under applicable Legal Requirements), or pay any special bonus or special remuneration to any director, employee director or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentemployee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants except, in each case, as may be required by applicable law;
(m) pay, discharge, settle or satisfy any litigation (whether or not commenced prior to the date hereof) or any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than normal periodic salary increases for non-officer employees made the payment, discharge, settlement or satisfaction, in the ordinary course of business, consistent business or in accordance with past practicetheir terms, or change liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports or incurred since the date of such financial statements, or waive the benefits of, agree to modify in any material respect manner, terminate, release any management policies person from or procedures;
(m) Make knowingly fail to enforce any payments outside confidentiality or similar agreement to which the Company or any of its subsidiaries is a party or of which the ordinary course Company or any of business in an aggregate excess of $250,000its subsidiaries is a beneficiary;
(n) Except except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any of its subsidiary thereof is a party party, or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter intoexcept as required by GAAP, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices;
(p) make any capital expenditures in excess of $50,000 in any individual case, including inventory accounting practicesand $400,000 in the aggregate;
(q) Make incur or enter into any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and Contract requiring the Company or another wholly-owned subsidiary any of the Company and advances its subsidiaries to pay in excess of business related expenses (including expenses related to business travel) to employees $25,000 in the ordinary course and consistent with past practiceany individual case;
(r) Authorize make any Tax election or make capital expenditures beyond those provided in the Company's existing capital expenditure budgetaccounting method change inconsistent with past practice that, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 aggregate, would adversely affect in any calendar quarter;
(s) Materially accelerate material respect the Tax liability or delay collection Tax attributes of the Company or any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law subsidiaries, taken as a whole, or settle or compromise any material tax Tax liability;
(w) Cancel , or terminate consent to any material insurance policy naming it as a beneficiary extension or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment waiver of any new products limitation period with respect to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesTaxes; or
(zs) Agree agree in writing or otherwise to take any of the actions described referred to in Section 5.1(a) through (ySection 5.1(r) above.hereof, inclusive. -------------- --------------
Appears in 1 contract
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its termsterms and the Closing (the “Interim Period”), the Effective Time, or such time as Parent's designees shall constitute a majority each of the Company Board, and the Company and each of its subsidiaries Company’s Subsidiaries shall, except to the extent that Parent BRPA shall otherwise consent in writingwriting (which consent shall not be unreasonably withheld, conditioned or delayed) or as set forth in Schedule 4.1 of the Company Schedules or as contemplated by this Agreement, carry on its business, in all material respects, business in the usual, regular and ordinary coursecourse consistent with past practices, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, Legal Requirements (except as expressly contemplated by Schedule 4.1 of the Company Schedules) and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present key officers and employees, and (iii) preserve its relationships with key customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings; provided, that, in the case of each of the preceding clauses (i)-(iii), during any period of full or partial suspension of operations related to COVID-19 or SARS-CoV-2 virus (or any mutation or variation thereof), the Company may, in connection with the COVID-19 pandemic (or any mutation or variation thereof), take such actions as are reasonably necessary (A) to protect the health and safety of the Company’s or its Subsidiaries’ employees and other individuals having business dealings with the Company or its Subsidiaries or (B) to reasonably respond to third-party supply or service disruptions caused by the COVID-19 pandemic, COVID-19 or SARS-CoV-2 virus (or any mutation or variation thereof), shall provide prompt notice to BRPA of the taking of any action permitted by this proviso. In addition, except as required or permitted or contemplated by the terms of this Agreement, and except Agreement or as provided set forth in Schedule 4.1 of the Company ScheduleSchedules, without the prior written consent of ParentBRPA, which consent shall not be unreasonably withheld, conditioned or delayed, during such periodthe Interim Period, the Company and the Company’s Subsidiaries shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans Plan or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company SchedulePlan;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) above.
Appears in 1 contract
Samples: Merger Agreement (Big Rock Partners Acquisition Corp.)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, terms or the Effective Appointment Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted consistent with past practice and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes Taxes when due, due subject to good faith disputes over such debts or taxesTaxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices practice and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, (iii) collect its accounts receivable and any other amounts payable to it when due and otherwise enforce any obligations owed to it by others substantially in accordance with their terms, and (iiiiv) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, the Company will promptly notify Parent in writing of any material event involving its business or operations. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such periodthe period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Appointment Time, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability repurchase of options or restricted stock, or reprice options granted under to any employee, consultant, director or other stock plans person or authorize cash payments in exchange for any options granted under or take any of such plans except pursuant action with regard to written agreements outstanding, any warrant or policies existing, on other right to acquire the date hereof and disclosed in the Company ScheduleCompany’s capital stock;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously made available, in the case of written agreements or written policies, or disclosed in writing, in the Company Schedulecase of existing policies, to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rightsProperty Rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)practice;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service employment relationship with any employee, director or consultant employee pursuant to stock option agreements or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)hereof;
(f) Enter into any agreement, obligation or commitment containing covenants purporting to limit or which effectively limit the Company’s or any of its subsidiaries’ freedom to compete in any line of business and/or in any geographic area or which would so limit Parent, the Company or the Surviving Corporation or any of its subsidiaries after the Effective Time or granting any exclusive distribution or other exclusive rights;
(g) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of Company Options therefor outstanding as of the date of this Agreement, and Company Warrants and (ii) the grant of employee stock options, options granted to newly hired employees consistent in amounts with the Company's established past practice for similarly situated employees, ’s prior practices and having an exercise price at least equal to non-officer employees who are hired in accordance with Section 5.1((k))the fair market value of Company Common Stock on the date any such option is granted;
(gh) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws the Company Charter Documents or other to the charter documents (or similar governing instruments of any of its subsidiaries)subsidiary;
(hi) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) thereof; or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any material joint ventureventures, strategic partnership relationships, alliances, marketing or allianceco-sale agreements or make any material loan or advance to, or investment in, any person, except for loans or capital contributions to a subsidiary or advances of routine business or travel expenses to employees, officers or directors in the ordinary course of business, consistent with past practice;
(ij) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products other than in the ordinary course of business business, consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)practice;
(jk) Incur, assume or pre-pay Incur any indebtedness for borrowed money, money or guarantee any such indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securitiessecurities of the Company or any of its subsidiaries, enter into any "“keep well" ” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing foregoing, other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee benefit plan or employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "“at will"”), pay any special bonus or special remuneration to any director, employee director or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentemployee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants consultants, other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments capital expenditures outside of the ordinary course of business in an aggregate excess of $250,000112,500 in the aggregate;
(n) Except in the ordinary course of business, modifyModify, amend or terminate any Company Contract or other material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, modify, amend or extend cancel any contractsdevelopment services, agreementslicensing, or obligations relating to the distribution, salesales, license sales representation or marketing by third parties of the Company's products other similar agreement or products licensed by the Company, obligation with respect to any Intellectual Property Rights other than agreements, extensions such agreements entered into in the ordinary course of business consistent with past practice or amendments that grant non- exclusive rights enter into any contract of a character required to such third parties and provide for termination be disclosed by the Company for convenience on not more than 60 days' noticeSection 3.14;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SECGAAP, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make Discharge, settle or satisfy any loansdisputed claim, advances litigation, arbitration, disputed liability or capital contributions toother controversy (absolute, accrued, asserted or investments inunasserted, contingent or otherwise), including any liability for Taxes, other person than the discharge or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected satisfaction in the ordinary course of business;
(t) Materially delay business consistent with past practice or accelerate payment of any account payable beyond incurred in connection with the transactions contemplated hereby, or in advance accordance with their terms, of its due date liabilities reflected or reserved against in the date such liability would have been paid Company Balance Sheet or incurred since September 30, 2005 in the ordinary course of business;
(u) Settle business consistent with past practice, or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise waive any material tax liability;
(w) Cancel benefits of, or terminate agree to modify in any material insurance policy naming it as respect, any confidentiality, standstill or similar agreements to which the Company or any of its subsidiaries is a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood party; provided, however, that the Company may renew discharge or settlement of any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors disputed claim, liability or other controversy in the first and second tiers amount of its distribution channel (which has less than $162,500 shall not been "sold through" be deemed to end-user customers and which such distributors have be prohibited by the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesforegoing; or
(zr) Agree in writing or otherwise to take any of the actions described in Section Sections 5.1(a) through (y5.1(q) above.
Appears in 1 contract
Samples: Merger Agreement (Neon Systems Inc)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during the period from Between the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such periodClosing Date, the Company shall not do any of the following and shall not permit conduct its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice, including using commercially reasonable efforts to preserve business relationships with customers, suppliers, employees and others having business relationships with the Company, and shall not take any action inconsistent with this Agreement or the consummation of the Closing. Without limiting the generality of the foregoing, the Company shall not, except as consented to by Parent in writing or as expressly required by this Agreement:
(a) issue any capital stock of the Company, or change the Company’s authorized or issued capital stock;
(lb) Adopt declare, set aside or pay any non-cash dividend or other non-cash distribution in respect of any capital stock of the Company or otherwise, split, combine or reclassify any capital stock of the Company or repurchase, redeem or otherwise acquire capital stock of the Company;
(c) amend or make a change to the Organizational Documents of the Company;
(d) (i) incur, amend, assume or guarantee any Indebtedness or make any loan, advance or capital contribution to or investment in any Person or (ii) create or assume any Encumbrances (other than Permitted Encumbrances) on any asset of the Company;
(e) (i) make, change or revoke any Tax election, (ii) change any annual Tax accounting period, (iii) adopt or change any Tax accounting method, (iv) file any amended Tax Return, (v) enter into any Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement relating to any Tax, (vi) surrender any right to claim a Tax refund, (vii) settle or compromise any claim, notice, audit report or assessment in respect of Taxes or (viii) consent to any extension or waiver of any limitation period with respect to any Tax claim or assessment;
(f) other than as required by Law or the terms of an Employee Benefit Plan in existence as of the date hereof, (i) increase or accelerate the vesting or payment of any compensation or benefits provided or payable or to become provided or payable to any officer, director, manager or employee of the Company, (ii) make any material change to, or terminate the employment (other than for cause) of, any management, supervisory or other key personnel of the Company or terminate the employment of or hire a material number of other employees of the Company, (iii) enter into any new or amend any employee stock purchase existing employment, severance, retention or employee stock option change in control agreement with any of its past or present officers, directors or employees or (iv) adopt, establish, amend or terminate any Employee Benefit Plan, or any agreement, plan, policy or adopt arrangement that would constitute an Employee Benefit Plan if it were in existence on the date hereof;
(g) (i) purchase, acquire, license, sell, lease, dispose of, or amend transfer any assets that are individually or in the aggregate, material employee benefit planto the Company or (ii) merge, consolidate, reorganize, restructure, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedurescombination;
(mh) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modifyaccelerate, amend or terminate (other than in connection with their present expiration provisions) any material contract Material Contract or agreement to which enter into any Contract that would have been a Material Contract if entered into by the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunderprior to the date hereof;
(oi) Enter into(A) cancel, amend compromise, waive or extend release any contractsmaterial right, agreements, debt or obligations relating to the distribution, sale, license or marketing by third parties claim of any the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
; (pB) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liabilityAction; or (C) delay or postpone the payment of payables, any accelerate the payment of receivables;
(wj) Cancel or terminate enter into any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement)Related Party Transaction;
(xk) Increase the aggregate dollar value of inventory owned by distributors make any capital expenditure, or commit to make a capital expenditure which are greater than $20,000 individually or $50,000 in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesaggregate; or
(zl) Agree in writing authorize, commit or otherwise agree to take any of the actions described in prohibited by this Section 5.1(a) through (y) above6.1.
Appears in 1 contract
Samples: Merger Agreement (Teladoc, Inc.)
Conduct of Business by the Company. Except as contemplated Section 5.1 Conduct of Business by the Company Pending the Merger. From the date of this Agreement until the Effective Time, (i) unless Parent shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), (ii) except as set forth in Section 5.1 of the Company Disclosure Schedule, during the period from the date of (iii) as otherwise expressly provided for in or contemplated by this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its termsor (iv) as required by applicable Law or by a Governmental Entity, the Effective TimeCompany shall, or such time as Parent's designees and shall constitute a majority cause each of the Company BoardSubsidiaries to, the Company and each of conduct its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, business in the usualordinary course consistent with past practice, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use including using its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, and goodwill and relationships with customers, third party payors (ii) including Governmental Entities, insurance carriers and other intermediaries), Company Producers and others having material business dealings with it and to keep available the services of its present current officers and key employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In additionaddition to and without limiting the generality of the foregoing, (w) unless Parent shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), (x) except as permitted by the terms set forth in Section 5.1 of this Agreement, and except as provided in the Company Disclosure Schedule, without (y) as otherwise expressly provided for in or contemplated by this Agreement or (z) as required by applicable Law or by a Governmental Entity, from the prior written consent of Parent, during such perioddate hereof until the Effective Time, the Company shall not do any of the following not, and shall not permit its subsidiaries to do any of the followingCompany Subsidiary to:
(a) Waive adopt or propose any stock repurchase rightschange in its charter, accelerate, amend or change the period code of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director regulations or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedulecomparable organizational documents;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(ci) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declaredeclare, set aside aside, make or pay any dividends on dividend or make any other distributions distribution (whether in cash, stock, equity securities stock or property) in respect of any of its capital stock, except for (A) dividends or distributions by wholly-owned Company Subsidiaries to the Company or another wholly-owned Company Subsidiary or (B) regular quarterly cash dividends paid by the Company on the Company Common Stock not in excess of $0.15 per share per quarter (appropriately adjusted to reflect any stock dividends, subdivisions, splits, combinations or other similar events relating to the Company Common Stock), with usual record and payment dates, (ii) adjust, split, combine or reclassify any of its capital stock or issue or propose or authorize the issuance of any other securities (including options, warrants or any similar security exercisable for, or convertible into, such other security) in respect of, in lieu of of, or in substitution for any for, shares of its capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(eiii) Purchaserepurchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber acquire any shares of the capital stock of the Company or any of its subsidiariesCompany Subsidiary, or any securities convertible into shares of such capital stock, other equity interests or subscriptions, any rights, warrants or options to acquire any such shares or interests;
(c) issue, sell, grant, pledge, amend, grant any rights in respect of or otherwise encumber any shares of its capital stock or other securities (including any options, warrants or any similar security exercisable for, or convertible into, such capital stock or similar security) or make any securities convertible into shares changes (by combination, merger, consolidation, reorganization, liquidation or otherwise) in the capital structure of capital stock, the Company or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securitiesCompany Subsidiary, other than (i) the issuance, delivery and/or sale issuances of shares of Company Common Stock pursuant to upon the exercise of Options therefor outstanding Company Stock Options, or Warrants in accordance with their terms in effect as of the date of this Agreementhereof, and or (ii) the grant issuances by a wholly-owned Company Subsidiary of employee capital stock options, consistent with the Company's established past practice for similarly situated employees, to nonsuch Company Subsidiary’s parent or another wholly-officer employees who are hired in accordance with Section 5.1((k))owned Company Subsidiary;
(gd) Cause, permit merge or propose consolidate with any amendments to its Certificate of Incorporation, Bylaws other Person or other charter documents (acquire any material assets or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or make a material portion investment in (whether through the acquisition of the assets of, stock or by otherwise) any other mannerPerson, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
than (i) Sellacquisitions of inventory, lease, license, encumber equipment or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products software in the ordinary course of business consistent with past practice or (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to ii) ordinary course investment portfolio transactions in accordance with the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)’s investment guidelines in effect on the date hereof;
(je) Incursell, assume lease, license, subject to a Lien, other than a Permitted Lien, encumber or pre-pay otherwise surrender, relinquish or dispose of any indebtedness for borrowed moneyassets, guarantee any indebtedness property or obligation of another person, issue product lines or sell any debt securities or options, warrants, calls businesses (including capital stock or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect equity interests of any of the foregoing other than a Company Subsidiary) except (i) pursuant to existing written contracts or commitments set forth in connection with Section 5.1 of the financing of ordinary course trade payables consistent with past practiceCompany Disclosure Schedule, (ii) pursuant to existing credit facilities in an amount not in excess of $250,000 individually or $1,000,000 in the ordinary course of business, aggregate or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent investment portfolio transactions in accordance with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into the Company’s investment guidelines in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding effect on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;hereof.
(mf) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(ni) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person Person in excess of $2,500,000 in the aggregate during any twelve (12) month period, other than by the Company or entityany Company Subsidiary to or in the Company or any Company Subsidiary or ordinary course investment portfolio transactions in accordance with the Company’s investment guidelines in effect on the date hereof, (ii) create, incur, guarantee or assume any Indebtedness, (iii) make or commit to make any capital expenditure other than capital expenditures approved by the Board of Directors of the Company prior to the date hereof or within the Company’s capital budget for fiscal 2007 previously provided to Parent or (iv) cancel any debts or waive any claims or rights of substantial value, except for loanscancellations made or waivers granted with respect to claims in the ordinary course of business consistent with past practice that, advancesin the aggregate, capital contributions or investments between any wholly-owned subsidiary of are not material to the Company and the Company Subsidiaries taken as a whole;
(g) amend or another wholly-owned subsidiary otherwise modify benefits under any Company Benefit Plan (other than immaterial amendments or modifications), accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Benefit Plan as currently in effect on the date hereof (except as expressly provided in Section 1.7 hereof), fail to make any required contribution to any Company Benefit Plan, merge or transfer any Company Benefit Plan or the assets or liabilities of any Company Benefit Plan, change the sponsor of any Company Benefit Plan, or terminate or establish any Company Benefit Plan, except to the limited extent necessary to comply with Section 409A of the Code without any material increase in liability on the part of, or cost to, the Company or any Company Subsidiary or to the extent required by an existing agreement, Company Benefit Plan or Law;
(h) grant any increase in the compensation, bonus or benefits of directors, officers, employees, consultants, representatives or agents of the Company or any Company Subsidiary, other than immaterial increases in the compensation and advances benefits of business related expenses (including expenses related to business travel) to persons who are not directors, executive officers or employees who earn more than $150,000 in annual base salary in the ordinary course and of business consistent with past practice;
(ri) Authorize enter into or make capital expenditures beyond those provided materially amend or modify any severance, consulting, retention, collective bargaining, change of control or employment agreement, plan, program or arrangement;
(j) settle or compromise any material claims or audits in the Company's existing capital expenditure budget, or that are individually an amount in excess of $100,000 750,000 individually or $2,000,000 in the aggregate (except that if a reserve has been established on the balance sheet of the Company as of December 31, 2006 for an amount less than the settlement or compromise amount, the Company may settle any such claims or audits in an amount up to $750,000 individually or $2,000,000 in the aggregate in excess of $500,000 such reserve amount), or enter into any consent decree, injunction or similar restraint or form of equitable relief in settlement of any material claims or audits that would restrict in any calendar quarter;
(s) Materially accelerate or delay collection material respect the operations of any notes or accounts receivable the business after the Effective Time, in advance of or beyond their regular due dates or the dates when the same would have been collected each case other than with respect to insurance claims in the ordinary course of business;
(tk) Materially delay (i) make or accelerate payment rescind any material election, whether express or deemed, relating to Taxes, (ii) settle or compromise any claim relating to Taxes, (iii) make a request for a written ruling of a Taxing Authority relating to Taxes, (iv) enter into a written and legally binding agreement with a Taxing Authority relating to Taxes, or (v) except as required by Law, change any account payable beyond or in advance of its due date methods of reporting income or deductions for federal income tax purposes from those employed in the date such liability would have been paid preparation of its federal income tax returns for the taxable year ended December 31, 2006;
(l) other than in the ordinary course of business, (i) modify or amend in any material respect or terminate any Material Contract, (ii) enter into any successor agreement to an expiring Material Contract that changes the terms of the expiring Material Contract in a way that is materially adverse to the Company or any Company Subsidiary, or (iii) modify, amend or enter into any new agreement that would have been considered a Material Contract if it were entered into at or prior to the date hereof;
(um) Settle enter into or compromise renew or extend any suits agreements or claims arrangements that limit or threatened suits restrict in any material respect the Company or claims for payments any Company Subsidiary or any of their respective Affiliates or any successor thereto, or that could, after the Effective Time, limit or restrict in an aggregate amount any material respect Parent or any of its Affiliates (including the Surviving Corporation) or any successor thereto, from engaging or competing in excess any material line of $500,000business or in any geographic area;
(vn) Make terminate, cancel, amend or modify any tax election insurance policies maintained by it covering the Company or the Company Subsidiaries as insureds or their respective properties which is not required replaced by law or settle or compromise any material tax liabilitya comparable amount of insurance coverage;
(wo) Cancel adopt a plan of complete or terminate any material insurance policy naming it as a beneficiary partial liquidation, dissolution, restructuring, recapitalization or a loss payable payee or permit any such policy to lapse (it being understood that other reorganization of the Company may renew or any insurance policy in effect as of the date of this Agreement)Company Subsidiary;
(xp) Increase other than a renewal transaction with any reinsurer upon the aggregate dollar value expiration of inventory owned by distributors in the first any current reinsurance agreement, enter into any new reinsurance transaction as assuming or ceding insurer, which does not contain arms’-length cancellation, termination and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998commutation provisions;
(yq) Begin shipment of alter or amend in any new products to customersmaterial respect any existing underwriting, claim handling, loss control, investment, actuarial, financial reporting or accounting practices, methods, guidelines or policies (including compliance policies), except for alpha versions and not more than 50 beta versions as may be required by (or, in the reasonable good faith judgment of the Company, advisable under) GAAP, SAP or any product delivered to customers solely for evaluation purposesGovernmental Entity or applicable Law; or
(zr) Agree in writing agree or otherwise commit to take do any of the actions described in Section 5.1(a) through (y) aboveforegoing.
Appears in 1 contract
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, terms or the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when dueTaxes in the ordinary course of business, consistent with past practice, subject to good faith disputes over such debts or taxesTaxes, pay or perform other material obligations when due, subject to good faith disputes over such obligationsin the ordinary course of business consistent with past practice, and use its commercially reasonable efforts efforts, consistent with past practices and policies practice to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, (iii) collect its accounts receivable and any other amounts payable to it when due and otherwise enforce any obligations owed to it by others substantially in accordance with their terms, and (iiiiv) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, the Company will promptly notify Parent of any material event involving its business or operations. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such periodthe period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or repurchase of restricted stock, or reprice options granted under to any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under or take any of such plans except pursuant action with regard to written agreements outstanding, any warrant or policies existing, on other right to acquire the date hereof and disclosed in the Company ScheduleCompany's capital stock;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously disclosed in the Company Schedulewriting to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)practice;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service employment relationship with any employee, director or consultant employee pursuant to stock option agreements or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor currently outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));Company Convertible Securities.
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws the Company Charter Documents or other to the charter documents (or similar governing instruments of any of its subsidiaries)subsidiary;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) thereof; or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any material joint ventureventures, strategic partnership relationships or alliancealliances or make any material loan or advance to, or investment in, any person, except for loans or capital contributions to a subsidiary or advances of routine business or travel expenses to employees, officers or directors in the ordinary course of business, consistent with past practice;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay Incur any indebtedness for borrowed money, money or guarantee any such indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securitiessecurities of the Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, practice or (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee benefit plan or employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee director or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentemployee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures; provided that, notwithstanding the foregoing, the Company may agree to pay, and may accrue, the Transaction Bonuses;
(ml) Make any payments capital expenditures outside of the ordinary course of business in an aggregate excess of $250,00010,000 in the aggregate;
(nm) Except in the ordinary course of business, modifyModify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party Contract or waive, release or assign any material rights or claims thereunder; provided, that (i) the renewal in the ordinary course of business of any software maintenance agreement that is in force on the date of this Agreement, which renewal is on terms substantially as favorable to the Company as those of the agreement currently in force, shall not be deemed to constitute a modification or amendment prohibited by this clause (m) and (ii) the consent of Parent to any such modification, amendment or termination shall not unreasonably be withheld or delayed;
(n) Enter into any development services, licensing, distribution, sales, sales representation or other similar agreement or obligation with respect to any material Intellectual Property or enter into any contract of a character required to be disclosed by Section 2.16 other than such agreements entered into in the ordinary course of business consistent with past practices, including pricing and contract terms;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SECGAAP, make any change in accounting methods, principles or practices;
(p) Discharge, settle or satisfy any disputed claim, litigation, arbitration, disputed liability or other controversy (absolute, accrued, asserted or unasserted, contingent or otherwise), including inventory accounting practicesany liability for Taxes, other than the discharge or satisfaction in the ordinary course of business consistent with past practice, or in accordance with their terms, of liabilities reflected or reserved against in the Company Balance Sheet in the ordinary course of business consistent with past practice, or waive any material benefits of, or agree to modify in any material respect, any confidentiality, standstill or similar agreements to which the Company or any of its subsidiaries is a party; provided, however, that the discharge or settlement of any disputed claim, liability or other controversy in the amount of less than $10,000 shall not be deemed to be prohibited by the foregoing;
(q) Make Take any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary action that would be reasonably likely to interfere with the treatment of the Company and Merger as a "reorganization" within the Company or another wholly-owned subsidiary meaning of Section 368 of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practiceCode;
(r) Authorize Engage in any action with the intent to directly or make capital expenditures beyond those provided in indirectly adversely affect any of the Company's existing capital expenditure budgettransactions contemplated by this Agreement, including with respect to any "poison pill" or similar plan, agreement or arrangement, or that are individually in excess of $100,000 any anti-takeover, control share acquisition, fair price, moratorium or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesother similar statute; or
(zs) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y5.1(r) above.
Appears in 1 contract
Conduct of Business by the Company. Except (a) Except: (i) as contemplated expressly permitted by this Agreement Agreement, (ii) as required by applicable law or as set forth in Section 5.1 of any Material Contract to which the Company Scheduleis a party or by which any Asset is bound, or (iii) with the written consent of Parent, during the period from commencing with the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company BoardClosing Date, the Company and each of shall conduct its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance business in all material respects in the ordinary and usual course consistent with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, past practice and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) organization and relationships with third parties and keep available the services of its present officers and employees.
(b) Without limiting the generality of Section 5.1(a), and (iii) preserve its relationships during the period commencing with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms date of this Agreement, Agreement and except as provided in continuing until the Company Schedule, without the prior written consent of Parent, during such periodClosing Date, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the followingnot:
(ai) Waive adopt or propose any stock repurchase rightschange in its articles of incorporation, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director bylaws or other stock plans or authorize cash payments in exchange constitutional documents, except for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedulechanges that would not have a Material Adverse Effect;
(bii) Grant (A) issue, authorize or sell any severance equity or termination pay to debt securities, (B) issue, authorize or sell any officer or employee except pursuant to written agreements outstandingsecurities convertible into, or policies existing, on the date hereof and disclosed in the Company Scheduleoptions with respect to, or adopt warrants to purchase or rights to subscribe for, any new severance planequity or debt securities, (C) split, combine, reclassify or make any other change in its issued and outstanding equity or debt securities, (D) redeem, purchase or otherwise acquire any of its equity or debt securities, or (E) declare any dividend or make any distribution with respect to its equity or debt securities;
(ciii) Transfer or license to any person or entity or otherwise extend, amend or modify (A) increase in any material respect any rights to manner the Company Intellectual Propertycompensation of, or enter into grants to future patentany new bonus or incentive agreement or arrangement with, copyright any of their respective directors, officers, employees or other intellectual property rights, managers other than non-exclusive licenses granted increases in compensation in the ordinary course of business and consistent with past practice and that are not material in the aggregate, (it being agreed that Parent shall not unreasonably withhold consent B) pay or agree to pay any pension, retirement allowance or other employee benefit to any non-exclusive license director, officer, employee or manager, whether past or present, other than as required by applicable law, contracts or plan documents in effect on the date of this Agreement, (C) enter into any new employment, severance, consulting, or other compensation agreement related to with any director, officer, employee or manager or other person other than in connection with any new hires or promotions in the Company's enterprise business ordinary course and that Parent's failure to reasonably object consistent with past practice, or (D) commit itself to any additional pension, profit-sharing, deferred compensation, group insurance, severance pay, retirement or other employee benefit plan, fund or similar arrangement, or adopt or amend or commit themselves to adopt or amend any of such agreement within five business days of any request for consent shall constitute such consent)plans, funds or similar arrangements in existence on the date hereof;
(div) Declare(A) enter into, set aside extend, renew or pay terminate any dividends on Material Contract, or make any change in any Material Contracts, (B) reclassify any assets or liabilities, or (C) do any other distributions act that: (whether x) would cause any representation or warranty of the Company in cashthis Agreement to be or become untrue in any material respect, stockor (y) could reasonably be expected to have a Material Adverse Effect;
(v) (A) sell, equity securities transfer, lease or property) in respect otherwise dispose of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any Assets other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock than in the ordinary course of business and consistent with past practices.
prior practice, (eB) Purchasecreate or permit to exist any new Lien or Encumbrance on any Assets, redeem (iii) assume, incur or otherwise acquire, directly or indirectly, guarantee any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, obligation for borrowed money other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice practices, (it being agreed that Parent shall not unreasonably withhold consent to iv) enter into any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to joint venture, partnership or other similar arrangement, (v) make any such agreement within five business days investment in or purchase any securities of any request for consent shall constitute such consent);
Person, (jvi) Incur, assume or pre-pay incur any indebtedness for borrowed money, guarantee any indebtedness or obligation of another personindebtedness, issue or sell any debt securities or options, warrants, calls or other rights to acquire any new debt securities, enter into any "keep well" new credit facility or other agreement to maintain make any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of businesscapital expenditures, or (iiivii) merge or consolidate with any other Person or acquire any other Person or a business, division or product line of any other Person (except as contemplated by provided for in this Agreement);
(kvi) Hire make any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect method of accounting or accounting practice except as required: (a) by reason of a concurrent change in law, SEC guidelines or GAAP, or (b) by reason of a change in the Company’s method of accounting or accounting practices that, due to law, SEC guidelines or requirements, or GAAP, requires such a change in any management policies method of accounting or procedures;accounting practice; or
(mvii) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend settle or terminate compromise any material contract Tax liability, make or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign change any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreementsTax election, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, file any tax return other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves a tax return filed in the ordinary course of business and consistent with past practices) or, except as required by prepared in a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and manner consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) above.
Appears in 1 contract
Conduct of Business by the Company. Except (i) as contemplated by this Agreement or as expressly set forth in Section 5.1 of the Company ScheduleDisclosure Letter; (ii) as expressly permitted, during contemplated or required by this Agreement; (iii) as required by applicable Law; or (iv) with the period prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed) from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Boardshall, and shall cause each Company Subsidiary to, conduct the business of the Company and each Company Subsidiary in the ordinary course of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, business consistent with past practice in all material respects; provided, in however, that no action or failure to take action with respect to matters specifically addressed by any of the usual, regular and ordinary course, in substantially provisions of the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject next sentence shall constitute a breach under this sentence unless such action or failure to good faith disputes over take action would constitute a breach of such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligationsprovision of the next sentence. In addition, and without limiting the generality of the foregoing, from the date of this Agreement to the Effective Time, the Company shall use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present the business organizationorganization of the Company and the Company Subsidiaries, (ii) keep available the services of its present executive officers and employeeskey employees on commercially reasonable terms, (iii) maintain in effect all necessary licenses, permits, consents, franchises and approvals and authorizations, and (iv) maintain satisfactory relationships of the Company and the Company Subsidiaries with any persons with which the Company or any Company Subsidiary has material business relations and with Governmental Entities that have jurisdiction over their respective businesses and operations. The Company agrees that, between the Agreement Date and the Effective Time, it shall not, directly or indirectly, take any action or knowingly fail to take any action that is intended to materially delay or prevent the consummation of the Transactions. Without limiting the generality of the foregoing, except (i) as expressly set forth in Section 5.01 of the Company Disclosure Letter; (ii) as expressly permitted or required by this Agreement; (iii) preserve its relationships as required by applicable Law; or (iv) with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of ParentParent (which shall not be unreasonably withheld, during such periodconditioned or delayed) from the date of this Agreement to the Effective Time, the Company shall not do any of the following not, and shall not permit its subsidiaries to any Company Subsidiary to, do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(bi) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declaredeclare, set aside or pay any dividends on on, or make any other distributions (whether in cash, stock, equity securities stock or propertyproperty or any combination thereof) in respect of, any of its capital stock, other equity interests or voting securities, other than dividends and distributions by a direct or indirect wholly owned Company Subsidiary to its parent; (ii) split, combine, subdivide or reclassify any of its capital stock, other equity interests or voting securities or securities convertible into or exchangeable or exercisable for capital stock or splitother equity interests or voting securities, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any its capital stock, other equity interests or voting securities, other than as permitted by Section 5.01(b); provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(eiii) Purchaserepurchase, redeem or otherwise acquire, directly or indirectlyoffer to repurchase, redeem or otherwise acquire, any capital stock or voting securities of, or equity interests in, the Company or any Company Subsidiary or any securities of the Company or any Company Subsidiary convertible into or exchangeable or exercisable for capital stock or voting securities of, or equity interests in, the Company or any Company Subsidiary, or any warrants, calls, options or other rights to acquire any such capital stock, securities or interests, except for acquisitions, or deemed acquisitions, of Company Common Stock or other equity securities of the Company in connection with (A) the payment of the exercise price of Company Stock Options with Company Common Stock (including in connection with “net exercises”), (B) required tax withholding in connection with the exercise of Company Stock Options pursuant to the Company Stock Plans, and (C) forfeitures of Company Stock Options;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than Liens imposed by applicable securities Laws) (i) any shares of capital stock of the Company or its subsidiariesany Company Subsidiary, except repurchases of unvested shares at cost in connection with the termination including under any Company Stock Plan or other equity or equity-based awards to employees, offers, directors or independent contractors of the service relationship with Company or any employee, director or consultant Company Subsidiaries other than (A) the issuance of Company Common Stock upon the exercise of Company Stock Options pursuant to stock option or purchase agreements the Company Stock Plans, in effect each case outstanding at the close of business on the date hereof of this Agreement and in accordance with their terms in effect at such time and (which repurchases B) the issuance of Company Common Stock pursuant to the ESPP during the current offering period thereunder (the “Current Offering Period”) pursuant to payroll deductions established prior to the date hereof; (ii) any other equity interests or voting securities of the Company shall be obligated or any Company Subsidiary; (iii) any securities convertible into or exchangeable or exercisable for capital stock or voting securities of, or other equity interests in, the Company or any Company Subsidiary; (iv) any warrants, calls, options or other rights to effectuate if acquire any capital stock or voting securities of, or other equity interests in, the repurchase Company or any Company Subsidiary; or (v) any rights issued by the Company or any Company Subsidiary that are linked in any way to the price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge of any class of Company Capital Stock or otherwise encumber any shares of capital stock of any Company Subsidiary, the value of the Company, any Company Subsidiary or any part of the Company or any Company Subsidiary or any dividends or other distributions declared or paid on any shares of capital stock of the Company or any Company Subsidiary;
(c) (i) amend the Company Charter or the Company Bylaws; or (ii) amend the charter or organizational documents of any Company Subsidiary, except, in the case of each of the foregoing clauses (i) and (ii), as may be required by Law or the rules and regulations of the SEC or NASDAQ;
(d) allow for the commencement of any new offering periods under the ESPP;
(e) change its financial accounting policies or procedures in effect as of December 31, 2016, other than as required by applicable Law or GAAP, or write up, write down or write off the book value of any assets of the Company or the Company Subsidiaries, other than as may be required by applicable Law or GAAP;
(f) directly or indirectly acquire or agree to acquire in any transaction any equity interest in or business of any Person or division thereof or any material properties or assets, except (i) acquisitions pursuant to Contracts in existence on the date of this Agreement (provided that such Contracts have been made available to Parent prior to the date of this Agreement) or (ii) acquisitions with respect to transactions between the Company, on the one hand, and any wholly owned Company Subsidiary, on the other hand, or between wholly owned Company Subsidiaries;
(g) except in relation to Liens to secure Indebtedness for borrowed money permitted to be incurred under Section 5.01(i), sell, lease (as lessor), license, mortgage, sell and leaseback or otherwise subject to any Lien (other than Permitted Liens), or otherwise dispose of any Owned Real Property or any of its subsidiariesmaterial properties, or any securities convertible into shares of such capital stockassets, or subscriptionslicenses, operations, rights, warrants businesses or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, interests therein (including Intellectual Property) other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice practice; (it being agreed that Parent shall not unreasonably withhold consent ii) pursuant to any non-exclusive license agreement related Contracts in existence on the date of this Agreement; or (iii) with respect to transactions between the Company's enterprise business , on the one hand, and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)wholly owned Company Subsidiary, on the other hand, or between wholly owned Company Subsidiaries;
(jh) Incurincur any additional Indebtedness except for (i) Indebtedness under the Company’s Existing Credit Agreement, assume (ii) Indebtedness between the Company, on the one hand, and any wholly owned Company Subsidiary, on the other hand, or pre-pay between wholly owned Company Subsidiaries and (iii) capital lease obligations made in the ordinary course of business;
(i) issue any indebtedness for borrowed moneydebt securities, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" securities of the Company or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practiceCompany Subsidiaries, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person (other than a Company Subsidiary), (iii) enter into any “keep well” or entityother Contract to maintain any financial statement or similar condition of another person or enter into any arrangement having the economic effect of any of the foregoing or (iv) assume, except guarantee, endorse or otherwise become liable or responsible for loansthe indebtedness or other obligations of another person (other than a guaranty by the Company on behalf of any Company Subsidiary);
(j) enter into any Collective Bargaining Agreement;
(k) assign, advancestransfer, capital contributions lease, cancel, fail to renew or investments between fail to extend any whollymaterial Company Permit;
(l) enter into, amend in a material manner, waive, renew or terminate any Material Contract (or any other Contract that would be deemed a Material Contract if it had been entered into prior to the Agreement Date), other than in the ordinary course of business in a commercially reasonable manner;
(m) settle (or propose to settle) or compromise any litigation, or release, dismiss or otherwise dispose of any Action, other than settlements or compromises of Actions that involve the payment of monetary damages in an amount not in excess of $200,000 individually by the Company or any Company Subsidiary and do not involve any injunctive or other non-owned subsidiary monetary relief or impose restrictions on the business or operations of the Company and the Company Subsidiaries, taken as whole;
(n) (i) change or another wholly-owned subsidiary adopt (or file a request to change or adopt) any method of Tax accounting or any annual Tax accounting period, (ii) make, change or rescind any material Tax election, (iii) file any Tax Return relating to the Company or any of the Company and advances Subsidiaries that has been prepared in a manner that is inconsistent in any material respect with the past practices of business related expenses the Company or such Company Subsidiary, as applicable, (including expenses related iv) settle or compromise any claim, investigation, audit or controversy relating to business travelTaxes, (v) surrender any right to employees in claim a Tax refund, (vi) file any amended Tax Return (unless required by applicable Law), (vii) enter into any closing agreement with respect to any Tax or (viii) waive or extend the ordinary course and consistent statute of limitations with past practicerespect to the assessment or determination of Taxes;
(ro) Authorize (A) increase (or make capital expenditures beyond those promise to increase) the compensation, bonus or incentives (including opportunities) or other benefits payable or provided in the Company's existing capital expenditure budgetto, or that are individually in excess grant or increase (or promise to grant or increase) any severance or termination pay or other benefits to any current or former directors, officers, employees or independent contractors of $100,000 the Company or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected Company Subsidiaries, other than in the ordinary course of business;
business consistent with past practice, (tB) Materially delay establish, adopt, enter into or accelerate payment of amend any account payable beyond Company Benefit Plan (or in advance of its due date any plan, arrangement, agreement, program, practice or the date such liability policy that would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming be a Company Benefit Plan if it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy were in effect as of the date of this Agreement)) or (C) except as required by the Company Stock Plans as in effect on the date hereof, take any action to accelerate entitlement to material compensation or benefits under any Company Benefit Plan or otherwise;
(xp) Increase fail to maintain in full force and effect the aggregate dollar value of inventory owned by distributors in existing insurance policies (or alternative policies with comparable terms and conditions to the first extent available) covering the Company and second tiers of its distribution channel (which has not been "sold through" to end-user customers the Company Subsidiaries and which such distributors have the right to return) above the aggregate value of such inventory at June 30their respective properties, 1998assets and businesses;
(yq) Begin shipment merge or consolidate the Company or any Company Subsidiary with any person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any new products of the Company Subsidiaries;
(r) other than in the ordinary course of business and in a commercially reasonable manner, abandon, disclaim, dedicate to customersthe public, except for alpha versions sell, assign, transfer or encumber (other than Permitted Liens) in, to or under any material Intellectual Property Rights of the Company, including failing to perform or cause to be performed all applicable filings, recordings and not more 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 material Intellectual Property Rights of the Company; (ii) license any Intellectual Property Rights to any third-party; (iii) develop, create or invent any Intellectual Property Rights jointly with any third-party; or (iv) disclose any confidential information or confidential Intellectual Property Rights of the Company to any person, other than 50 beta versions employees of the Company or a Company Subsidiary or third parties that are subject to confidentiality or non-disclosure agreements protecting against disclosure thereof, or to Parent or any product delivered of its Affiliates in connection with the Transactions;
(s) enter into, amend, waive or terminate (other than terminations in accordance with their terms) any Contracts between (i) the Company or any of the Company Subsidiaries and (ii) any of the Company’s Affiliates that would be required to customers solely for evaluation purposesbe disclosed by the Company under Item 404 of Regulation S-K under the Securities Act;
(t) 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; or
(zu) Agree in writing agree, resolve, announce an intention, enter into any formal or informal agreement or otherwise make a commitment, to take do any of the actions described in Section 5.1(a) through (y) aboveforegoing.
Appears in 1 contract
Samples: Merger Agreement (Mocon Inc)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its termsterms and the time Purchaser takes up and pays for the Shares (the "EFFECTIVE TIME"), the Effective Time, or such time as Parent's designees Company (which for the purposes of this Article 4 shall constitute a majority of the Company Board, include the Company and each of its subsidiaries shallsubsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing, to carry on its business, in all material respects, business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, to pay its debts and taxes when due, due subject to good faith disputes over such debts or taxes, to pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, the Company will promptly notify Parent of any breach of its representations, warranties or covenants under this Agreement. In addition, except as permitted by the terms of this Agreement, and except Agreement (other than as provided in Article 4.1 of the Company ScheduleSchedules), without the prior written consent of Parent, during such period, the Company shall not do any of the following following, and shall not permit any of its subsidiaries to do any of the following:
(ai) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, consultant or director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans plans;
(ii) Grant any severance or termination pay to any officer or employee except payments in amounts consistent with policies and past practices or pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Scheduleother, or adopt any new severance plan;
(ciii) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual PropertyCompany's intellectual property or other proprietary rights, or enter into grants to future patent, copyright or other intellectual property patent rights, other than non-exclusive licenses granted in the ordinary course of business and business, consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)practice;
(div) DeclareBuy any Intellectual Property of a third party or enter into any license agreement with respect to the Intellectual Property of any third party for an acquisition or license, set aside the price for which exceeds $50,000 individually or in the aggregate, other than "shrink wrap", "click wrap"; and similar widely available commercial end-user licenses;
(v) Declare or pay any dividends on or make any other distributions (whether in cash, stock, equity securities stock or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(evi) Purchase, redeem Repurchase or otherwise acquire, directly or indirectly, any shares of capital stock except pursuant to rights of the Company or its subsidiaries, except repurchases repurchase of unvested any such shares at cost in connection with the termination of the service relationship with under any employee, consultant or director or consultant pursuant to stock option or purchase agreements in effect plan existing on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);hereof.
(fvii) Issue, deliver, sell, authorizeauthorize or propose the issuance, pledge delivery or otherwise encumber sale of, any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuanceissuance of Shares, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options stock options therefor outstanding as of the date of this Agreement, and (ii) Shares issuable pursuant to the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k))Employee Share Purchase Plan;
(gviii) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws any charter document or other charter documents Bylaw (or similar governing instruments of any of its subsidiaries);
(hix) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnershippartnership interest, association or other business organization or division thereof orthereof, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company Company, or enter into any joint ventureventures, strategic partnership partnerships or alliancealliances;
(ix) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(lxi) Incur any indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities, or guarantee any debt securities of others;
(xii) Adopt or amend any employee benefit or employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will")contract, pay any special bonus or special remuneration to any director, employee director or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentemployee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, officers or employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(mxiii) Make Pay, discharge or satisfy any payments outside of claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business in an aggregate excess of $250,000business;
(nxv) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement involving payments of $50,000 or more to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(pxvi) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SECGAAP, make any change in accounting methods, principles or practices, including inventory accounting practices;
(qxvii) Make or change any loansmaterial election in respect of Taxes, advances adopt or capital contributions tochange any accounting method in respect of Taxes, enter into any closing agreement, settle any claim or assessment in respect of Taxes, or investments in, consent to any other person extension or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary waiver of the Company and the Company limitation period applicable to any claim or another wholly-owned subsidiary assessment in respect of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments Taxes in an aggregate amount in excess of $500,00050,000 in the aggregate;
(vxviii) Make Commence any tax election not required by law litigation or settle any litigation for an amount in excess of the greater of $50,000 in the aggregate or compromise any material tax liabilitythe amount reserved in respect thereof in the Company Balance Sheet, as set forth in Section 4.1 of the Company Schedules;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(zxix) Agree in writing or otherwise to take any of the actions described in Section 5.1(a(i) through (yxviii) above.
Appears in 1 contract
Conduct of Business by the Company. Except as contemplated by this Agreement or (i) as set forth in Section 5.1 4.1 of the Company Disclosure Schedule, (ii) as otherwise expressly contemplated by this Agreement, (iii) as consented to by Parent in writing (which consent shall not be unreasonably withheld or delayed), or (iv) as required by applicable law or regulation, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, and the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent and shall otherwise consent in writingcause its Subsidiaries to, carry on its business, in all material respects, their respective businesses in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted course consistent with past practice and in compliance in all material respects with all applicable laws and regulations, pay its their respective debts and taxes Taxes when due, subject to good faith disputes over such debts or taxes, pay or perform their other material respective obligations when due, subject to good faith disputes over such obligationsand, and use its all commercially reasonable efforts consistent with past practices and policies the other terms of this Agreement to (i) preserve intact its present their current business organizationorganizations, (ii) use all commercially reasonable efforts consistent with the other terms of this Agreement to keep available the services of its present their current officers and employeesemployees and preserve their relationships with those Persons having business dealings with them, all with the goal of preserving unimpaired in all material respects their goodwill and ongoing businesses at the Effective Time. Without 49 limiting the generality of the foregoing, senior officers of Parent and the Company shall meet on a reasonably regular basis to review the financial and operational affairs of the Company and its Subsidiaries, in accordance with applicable law, and the Company shall give due consideration to Parent's input on such matters, consistent with Section 4.4 hereof, with the understanding that, notwithstanding any other provision contained in this Agreement, Parent shall in no event be permitted to exercise control of the Company prior to the Effective Time. Except as (i) expressly contemplated by this Agreement, (ii) as disclosed in Section 4.1 of the Company Disclosure Schedule, (iii) preserve its relationships with customersas consented to by Parent in writing or (iv) required by applicable law or regulation, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by after the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, date hereof the Company shall not do any of the following not, and shall not permit its subsidiaries to do any of the followingits Subsidiaries to:
(ai) Waive any stock repurchase rights, accelerate, amend other than dividends and distributions by a direct or change the period indirect wholly owned Subsidiary of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
to its parent, (bx) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declaredeclare, set aside or pay any dividends on or on, make any other distributions (whether in cash, stock, equity securities or property) in respect of, or enter into any agreement with respect to the voting of, any of any its capital stock or (except for regular quarterly cash dividends not to exceed $0.20 per share on the Company Common Stock and regular cash dividends on the REIT Preferred Stock of the Company REIT in the amounts and at the times set forth in Section 3.1(g)(iii) of the Company Disclosure Schedule and otherwise in accordance with the terms thereof, (y) 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 of, or in substitution for any for, shares of its capital stock; provided , except upon the exercise of Company Stock Options that any are outstanding as of the Company's wholly-owned subsidiaries may declaredate hereof in accordance with their present terms, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(ez) Purchasepurchase, redeem or otherwise acquire, directly or indirectly, acquire any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock other securities of the Company or any of its subsidiariesSubsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other securities (other than (i) the issuance, delivery and/or sale of shares issuance of Company Common Stock pursuant to upon the exercise of Company Stock Options therefor that are outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired hereof in accordance with Section 5.1((k)their present terms);
(gii) Causeissue, permit deliver, sell, pledge or propose otherwise encumber or subject to any amendments to its Certificate of Incorporation, Bylaws or Lien (other charter documents (or similar governing instruments of than Company Permitted Liens) any shares of its subsidiariescapital stock, any other voting securities, including any restricted shares of Company Common Stock, or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities, including any Company Stock Options (other than the issuance of Company Common Stock upon the exercise of Company Stock Options that are outstanding as of the date hereof in accordance with their present terms);
(hiii) Acquire amend its certificate of incorporation, by-laws or other comparable organizational documents;
(iv) (A) acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or any equity interest in or a material portion of the assets securities of, or by any other manner, any business or any corporationPerson, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or except in the aggregateordinary course of business or (B) open, to the business of the Company close, sell or enter into acquire any joint venture, strategic partnership or alliancebranches;
(iv) Sellsell, lease, license, mortgage or otherwise encumber or subject to any Lien (other than Company Permitted Liens), or otherwise dispose of any of its properties or assets which are material, individually or other than securitizations and other transactions in the aggregateordinary course of business and consistent with past practices or create any security interest in such assets or properties (other than Company Permitted Liens);
(vi) except for borrowings having a maturity of not more than 30 days under existing credit facilities (or renewals, to extensions or replacements therefor that do not provide for any termination fees or penalties, prohibit pre-payments or require any pre-payment penalties, or contain any like provisions limiting or otherwise affecting the business ability of the Company, except sales of inventory and used equipmentCompany or its applicable Subsidiaries or successors from terminating or pre-paying such facilities, or the license of the Company's products contain financial terms less advantageous than existing credit facilities, such existing credit facilities, and as they may be so renewed, extended or replaced, "CREDIT FACILITIES") that are incurred in the ordinary course of business consistent with past practice (it being agreed that and with respect to which the Company consults with Parent shall on a basis not unreasonably withhold consent to any nonless frequently than bi-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request weekly, or for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls borrowings under Credit Facilities or other rights lines of credit or refinancing of indebtedness outstanding on the date hereof not to acquire any debt securitiesexceed $5,000,000, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having and except for the economic effect incurring of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities deposit liabilities in the ordinary course of business, incur any Indebtedness for borrowed money or (iii) as contemplated by this Agreement;
(k) Hire issue any employeedebt securities or assume, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt guarantee or amend any employee stock purchase or employee stock option planendorse, or adopt or amend otherwise become responsible for the obligations of any material employee benefit plan, or enter into any employment contract or collective bargaining agreement Person (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"Company or any wholly owned Subsidiary thereof), pay any special bonus or special remuneration to any directoror, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any Person other person than its wholly owned Subsidiaries and as a result of ordinary advances and reimbursements to employees and endorsements of banking instruments;
(vii) change in any material respect its accounting methods (or entityunderlying assumptions), principles or practices affecting its assets, liabilities or business, including any reserving, renewal or residual method, practice or policy, in each case, in effect on the date hereof, except as required by changes in GAAP or regulatory accounting principles, or change any of its methods of reporting income and deductions for loansFederal income tax purposes from those employed in the preparation of the Federal income tax returns of the Company for the taxable year ending December 31, advances2002, capital contributions except as required by changes in law or investments between regulation;
(viii) change in any wholly-owned subsidiary material respects its investment or risk management or other similar policies of the Company or any of its Subsidiaries;
(ix) make, change or revoke any Tax election, file any amended Tax Return, enter into any closing agreement, settle or compromise any liability with respect to Taxes, agree to any adjustment of any Tax attribute, file any claim for a refund of Taxes, or consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment;
(x) create, renew or amend, or take any other action that may result in the creation, renewal, or amendment, of any agreement or contract or other binding obligation of the Company or its Subsidiaries containing (A) any restriction on the ability of the Company and its Subsidiaries, taken as a whole, to conduct its business as it is presently being conducted or (B) any restriction on the Company or another wholly-owned subsidiary its Subsidiaries engaging in any type or activity or business;
(A) except as set forth in Section 4.1(xi) of the Company and advances Disclosure Schedule, incur any capital expenditures in excess of business related expenses $10,000 individually or $50,000 in the aggregate, (including expenses related B) enter into any agreement obligating the Company to business travelspend more than $10,000 individually or $50,000 in the aggregate, or (C) enter into any agreement, contract, lease or other arrangement of the type described in Section 3.1(f) or Section 3.1(y) of this Agreement except for any such agreements, contracts, leases or other arrangements (w) of the type described in Section 3.1(f)(i) to employees the extent not prohibited under Section 4.1(vi) and to the extent not pursuant to any agreement containing provisions that restrict, or may restrict, the conduct of the business of the issuer thereof as currently conducted in a manner more adverse to the Company than the current Credit Facilities, (x) of the type described in Section 3.1(f)(ii) to the extent not prohibited by Section 4.1(xi)(A) or (B), (y) of the type described in Section 3.1(f)(xii) or (xiv) and that is terminable on not less than 30 days notice without penalty, but only following prior consultation with Parent, or (z) of the type described in Section 3.1(f)(xiii) to the extent required by the expiration of the term of an existing lease unless reasonably objected to by Parent;
(xii) terminate, amend or otherwise modify, except in the ordinary course of business, or knowingly violate the terms of, any of the Company Material Contracts, any of the leases for the Leased Properties or the Third Party Leases or any other binding obligations material to the Company and its Subsidiaries, taken as a whole, and except for terminations, amendments or other modifications that would not result in the incurrence of additional costs or expenses, or in the loss of revenue, in excess of $50,000 on an annual basis in the aggregate, and are not made with respect to any of the Company Material Contracts described in Section 3.1(f)(iii), (vi), (vii), (ix), (x), (xi) or (xv) (B);
(xiii) except as required by agreements or instruments in effect on the date hereof, alter in any material respect, or enter into any commitment to alter in any material respect, any interest material to the Company and its Subsidiaries, taken as a whole, in any corporation, association, joint venture, partnership or business entity in which the Company directly or indirectly holds any equity or ownership interest on the date hereof (other than any interest arising from any foreclosure, settlement in lieu of foreclosure or troubled loan or debt restructuring in the ordinary course of business consistent with past practice);
(xiv) Except for payments described in Section 4.1 of the Company Disclosure Schedule (A) grant to any current or former director, Executive Officer or Key Employee of the Company or its Subsidiaries any increase in compensation, bonus or other benefits, except for salary, wage, bonus or benefit increases (x) as required from time to time by governmental legislation affecting wages, and (y) as required by the terms existing prior to the date hereof of plans or arrangements described in Section 3.1(k) the Company Disclosure Schedule, (B) grant to any such current or former director, or Executive Officer or Key Employee, any increase in severance or termination pay, (C) enter into, or amend, or take any action to clarify any provision of, any Plan or any employment, deferred compensation, consulting, severance, termination or indemnification agreement with any such current or former director, or Executive Officer or Key Employee, except as required by applicable law, (D) modify any Company Stock Option or (E) without first consulting with Parent, make any discretionary contributions to any pension plan;
(xv) except pursuant to agreements or arrangements in effect on the date hereof and disclosed in writing and provided or made available to Parent and except for compensation for service as an officer, employee or director consistent with past practice, pay, loan or advance any amount to, or sell, transfer or lease any properties or assets (real, personal or mixed, tangible or intangible) to, or enter into any agreement or arrangement with, any of its officers or directors or any affiliate or the immediate family members or associates of any of its officers or directors other than compensation in the ordinary course of business consistent with past practice;
(rxvi) Authorize agree or make capital expenditures beyond those provided consent to any material agreement or material modifications of existing agreements with any Governmental Entity in respect of the Company's existing capital expenditure budgetoperations of its business, except (i) as required by law or that are individually in excess (ii) to effect the consummation of $100,000 or in the aggregate in excess of $500,000 in any calendar quartertransactions contemplated hereby;
(sxvii) Materially accelerate pay, discharge, settle or delay collection of compromise any notes claim, action, litigation, arbitration or accounts receivable in advance of proceeding, other than any such payment, discharge, settlement or beyond their regular due dates or the dates when the same would have been collected compromise in the ordinary course of businessbusiness consistent with past practice that involves solely money damages in an amount not in excess of $50,000 individually or $100,000 in the aggregate, and that does not create precedent for other pending or potential claims, actions, litigation, arbitration or proceedings;
(txviii) Materially delay issue any broadly distributed communication of a general nature to Employees (including general communications relating to benefits and compensation) or accelerate payment customers without the prior approval of any account payable beyond Parent (which will not be unreasonably delayed or in advance of its due date or the date such liability would have been paid withheld), except for communications in the ordinary course of businessbusiness that do not relate to the Merger or other transactions contemplated hereby;
(uxix) Settle create, renew, amend or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel permit to expire, lapse or terminate or knowingly take any action reasonably likely to result in the creation, renewal, amendment, expiration, lapse or termination of any insurance policies referred to in Section 3.1(o) material insurance policy naming it to the Company and its Subsidiaries, taken as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood whole, except that the Company may renew shall be permitted to take any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors such action without Parent's consent in the first and second tiers of its distribution channel (which has not been "sold through" event that Parent shall fail to end-user customers and which reasonably consent to such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesaction; or
(zxx) Agree in writing knowingly take any action or otherwise knowingly fail to take any action which would result in any of the actions described in Section 5.1(aconditions of Article VI not being satisfied; or
(xxi) through (y) aboveauthorize, or commit or agree to take, any of the foregoing actions.
Appears in 1 contract
Samples: Merger Agreement (PNC Financial Services Group Inc)
Conduct of Business by the Company. Except (a) Except: (i) as contemplated expressly permitted by this Agreement Agreement, (ii) as required by applicable law or as set forth in Section 5.1 of any Material Contract to which the Company Scheduleis a party or by which any Asset is bound, or (iii) with the written consent of Power3, during the period from commencing with the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company BoardClosing Date, the Company and each of shall conduct its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance business in all material respects in the ordinary and usual course consistent with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, past practice and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) organization and relationships with third parties and keep available the services of its present officers and employees.
(b) Without limiting the generality of Section 5.1(a), and (iii) preserve its relationships during the period commencing with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms date of this Agreement, Agreement and except as provided in continuing until the Company Schedule, without the prior written consent of Parent, during such periodClosing Date, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the followingnot:
(ai) Waive adopt or propose any stock repurchase rightschange in its certificate of incorporation, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director bylaws or other stock plans or authorize cash payments in exchange constitutional documents, except for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedulechanges that would not have a Material Adverse Effect;
(bii) Grant (A) issue, authorize or sell any severance equity or termination pay to debt securities, (B) issue, authorize or sell any officer or employee except pursuant to written agreements outstandingsecurities convertible into, or policies existing, on the date hereof and disclosed in the Company Scheduleoptions with respect to, or adopt warrants to purchase or rights to subscribe for, any new severance planequity or debt securities, (C) split, combine, reclassify or make any other change in its issued and outstanding equity or debt securities, (D) redeem, purchase or otherwise acquire any of its equity or debt securities, or (E) declare any dividend or make any distribution with respect to its equity or debt securities;
(ciii) Transfer or license to any person or entity or otherwise extend, amend or modify (A) increase in any material respect any rights to manner the Company Intellectual Propertycompensation of, or enter into grants to future patentany new bonus or incentive agreement or arrangement with, copyright any of their respective directors, officers, employees or other intellectual property rights, managers other than non-exclusive licenses granted increases in compensation in the ordinary course of business and consistent with past practice and that are not material in the aggregate, (it being agreed that Parent shall not unreasonably withhold consent B) pay or agree to pay any pension, retirement allowance or other employee benefit to any non-exclusive license director, officer, employee or manager, whether past or present, other than as required by applicable law, contracts or plan documents in effect on the date of this Agreement, (C) enter into any new employment, severance, consulting, or other compensation agreement related to with any director, officer, employee or manager or other person other than in connection with any new hires or promotions in the Company's enterprise business ordinary course and that Parent's failure to reasonably object consistent with past practice, or (D) commit itself to any additional pension, profit-sharing, deferred compensation, group insurance, severance pay, retirement or other employee benefit plan, fund or similar arrangement, or adopt or amend or commit themselves to adopt or amend any of such agreement within five business days of any request for consent shall constitute such consent)plans, funds or similar arrangements in existence on the date hereof;
(div) Declare(A) enter into, set aside extend, renew or pay terminate any dividends on Material Contract, or make any change in any Material Contracts, (B) reclassify any assets or liabilities, or (C) do any other distributions act that: (whether x) would cause any representation or warranty of the Company in cashthis Agreement to be or become untrue in any material respect, stockor (y) could reasonably be expected to have a Material Adverse Effect;
(A) sell, equity securities transfer, lease or property) in respect otherwise dispose of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any Assets other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock than in the ordinary course of business and consistent with past practices.
prior practice, (eB) Purchasecreate or permit to exist any new Lien or Encumbrance on any Assets, redeem (iii) assume, incur or otherwise acquire, directly or indirectly, guarantee any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, obligation for borrowed money other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice practices, (it being agreed that Parent shall not unreasonably withhold consent to iv) enter into any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to joint venture, partnership or other similar arrangement, (v) make any such agreement within five business days investment in or purchase any securities of any request for consent shall constitute such consent);
Person, (jvi) Incur, assume or pre-pay incur any indebtedness for borrowed money, guarantee any indebtedness or obligation of another personindebtedness, issue or sell any debt securities or options, warrants, calls or other rights to acquire any new debt securities, enter into any "keep well" new credit facility or other agreement to maintain make any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of businesscapital expenditures, or (iiivii) merge or consolidate with any other Person or acquire any other Person or a business, division or product line of any other Person (except as contemplated by provided for in this Agreement);
(kvi) Hire make any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect method of accounting or accounting practice except as required: (a) by reason of a concurrent change in law, SEC guidelines or GAAP, or (b) by reason of a change in the Company’s method of accounting or accounting practices that, due to law, SEC guidelines or requirements, or GAAP, requires such a change in any management policies method of accounting or procedures;accounting practice; or
(mvii) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend settle or terminate compromise any material contract Tax liability, make or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign change any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreementsTax election, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, file any tax return other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves a tax return filed in the ordinary course of business and consistent with past practices) or, except as required by prepared in a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and manner consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) above.
Appears in 1 contract
Conduct of Business by the Company. Except as contemplated by The Company (which for the purposes of this Agreement or as set forth in Section 5.1 of the Company Scheduleincludes its Subsidiaries) covenants and agrees that, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to is terminated by its terms, unless the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent Offeror shall otherwise consent agree in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner except as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to otherwise (i) preserve intact its present business organizationexpressly permitted or specifically contemplated by this Agreement, (ii) required by Law or (iii) as otherwise set forth in the Company Disclosure Letter:
(a) the business of the Company shall be conducted only in, and the Company shall not take any action except in, the ordinary course of business consistent with past practices. The Company shall use commercially reasonable best efforts to maintain and preserve its business organization and goodwill and assets, to keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do make any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance business, assets, liabilities, operations, capital or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock affairs of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products changes in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)practices;
(jb) Incurwithout limiting the generality of Section 5.1(a), assume the Company shall not, and shall not permit any of its Subsidiaries to, directly or preindirectly, do or permit to occur any of the following:
(i) amend its or any of its Subsidiaries notices of articles, articles, charter or by-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls laws or other rights to acquire any debt securities, enter into any "keep well" comparable organizational documents;
(ii) amend the Stock Option Plan or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect terms of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing its outstanding securities including any outstanding indebtedness and credit facilities in the ordinary course of business, or facilities;
(iii) as contemplated declare, set aside or pay any dividend or other distribution or payment (whether in cash, shares or property) in respect of the Common Shares owned by this Agreementany Person or the securities of any Subsidiary owned by a Person other than the Company other than any dividends payable to the Company or any other wholly-owned Subsidiary of the Company;
(kiv) Hire issue, sell or pledge or agree to issue, sell or pledge any employeeCommon Shares, including Common Shares which qualify as “flow-through shares” as defined in subsection 66(15) of the Tax Act, other securities of the Company, any securities of the Subsidiaries or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire Common Shares, or securities of any Company Subsidiaries, other than Common Shares issuable upon exercise of the currently outstanding Options and Warrants;
(v) redeem, purchase or otherwise acquire any of its outstanding Common Shares or other securities;
(vi) split, consolidate or reclassify any of its Common Shares;
(vii) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or reorganization of the Company or any of its Subsidiaries;
(viii) reorganize, amalgamate or merge the Company or any of its Subsidiaries with any other Person;
(ix) acquire, encumber or divest a shareholding or equity interest in any other entity (including for the avoidance of doubt, each of its Subsidiaries) or any business;
(x) sell, lease, pledge, dispose of or encumber any assets, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practicepractices or except for assets with an aggregate value of less than $100,000;
(lxi) Adopt acquire (by merger, amalgamation, consolidation, acquisition of shares or amend assets or otherwise) another Person or division thereof or make any employee stock investment either by purchase of shares or employee stock option plansecurities, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement contribution of capital (other than offer letters and letter agreements entered into to wholly-owned Subsidiaries), property transfer or purchase of any property or assets of any other Person or division thereof having a value in excess of $50,000 individually or $100,000 in the aggregate;
(xii) incur, extend, renew or replace any indebtedness or any other liability or obligation or issue any debt securities or assume, guarantee, endorse or otherwise become responsible for, the obligations of any other Person (other than in respect of the Company or one of its Subsidiaries) or make any loans or advances, except for fluctuations in working capital in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedurespractices;
(mxiii) Make expend or commit to expend any payments outside of the ordinary course of business amounts with respect to capital expenditures in an aggregate excess of $250,000;
(n) Except 100,000 individually or $250,000 in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves aggregate except in the ordinary course of business and consistent with past practices and except consistent with the Company forecast of expenditures for the period between the date hereof and the termination of this Agreement to be agreed upon by each of the Offeror and the Company (the “Company Budget”);
(xiv) pay, discharge or satisfy any material claims, liabilities or obligations other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the Financial Statements or of liabilities incurred since August 31, 2009 in the ordinary course of business consistent with past practices or incurred in connection with transactions contemplated by this Agreement, as set out in the Company Disclosure Letter;
(xv) excluding investments of available cash in short-term bankers’ acceptances and similar investments, enter into any xxxxxx, Swaps or other financial instruments or like transactions;
(xvi) enter into, terminate, waive, modify, amend or release any Person from any obligation under any Material Contract;
(xvii) make any changes in financial or tax accounting methods, principles, policies or practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practicesby Law;
(qxviii) Make make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax Tax election not required by law or settle or compromise any material tax Tax liability;
(wxix) Cancel enter into any Contracts or terminate other transactions with any material insurance policy naming officer, director or trustee of the Company or any of the Subsidiaries, or any person who at the time the Contract would be entered into owned 10% or more of the outstanding Common Shares;
(xx) except in accordance with Sections 6.1 and 6.2 hereof, enter into any transaction or perform any act which might interfere with or be materially inconsistent with the successful completion of the acquisition of Common Shares by the Offeror pursuant to the Offer or which would render, or which reasonably may be expected to render, inaccurate any of the Company’s representations and warranties set forth in this Agreement or interfere with the completion of the Offer;
(xxi) settle any action, claim or proceeding brought (i) against it as a beneficiary and/or its Subsidiaries or a loss payable payee (ii) by any present or permit former holder of its securities or any such policy to lapse (it being understood other person in connection with the transactions contemplated by this Agreement, provided that the Company may renew settle any insurance policy in effect as such action, claim or proceeding that has a value of less than $100,000, provided that the Offeror shall be given notice of the date commencement of this Agreement);
(x) Increase any action by the aggregate dollar value of inventory owned by distributors in the first and second tiers Company or any of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesSubsidiaries; or
(zxxii) Agree in writing authorize or otherwise to take propose any of the actions described foregoing, or enter into or modify any Contract to do any of the foregoing;
(c) the Company shall use its commercially reasonable efforts to cause the current insurance (or re-insurance) policies of the Company not to be cancelled or terminated or any of the coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies providing coverage similar to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in Section 5.1(afull force and effect;
(d) through the Company shall (and cause each of its Subsidiaries to) (i) duly and timely file all Tax Returns required to be filed by it on or after the date hereof and all such Tax Returns will be true, complete and correct in all material respects; (ii) timely withhold, collect, remit and pay all Taxes which are to be withheld, collected, remitted or paid by it to the extent due or payable, except for any Taxes contested in good faith pursuant to applicable Laws, provided that the applicable Laws do not require payment of Taxes in dispute during the Tax contest; (iii) not make or rescind any election relating to Taxes; (iv) not make a request for a Tax ruling or enter into a closing agreement with any Tax authorities; (v) not settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes; (vi) not change any of its methods of reporting income, deductions or accounting for income tax purposes from those employed in the preparation of its income tax return for the tax year for which it last filed its Tax Return under the Tax Act, except as may required by applicable Laws; and (vii) promptly inform the Offeror in writing about any proceedings, investigations assessments, reassessments, actions, suits, audits or claims pending or threatened against the Company or any of its Subsidiaries in respect of any Taxes;
(e) the Company shall duly and timely file all material forms, reports, schedules, statements and other documents required to be filed pursuant to any applicable corporate Laws or Securities Laws;
(f) the Company promptly notify the Offeror orally and in writing of (i) any material change (within the meaning of the Securities Act (British Columbia)), in the operation of its business or in the operation of its properties and of any material governmental or third party complaints, investigations or hearings (or communications indicating that the same may be contemplated); and (ii) the occurrence, or failure to occur, of any event or state of facts which occurrence or failure would or would be likely to (x) cause any of the representations or warranties of the Company contained herein to be untrue or inaccurate; or (y) aboveresult in the failure in any material respect of the Company to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied prior to the Effective Time;
(g) except as disclosed in the Company Disclosure Letter, the Company shall not create any new Officer Obligations and the Company shall not grant to any officer, director or Employee an increase in compensation in any form, make any loan, or grant any options to any officer, director or Employee, or take any action with respect to the grant of any severance or termination pay arising from the Offer or a change of control of the Company or enter into any employment agreement with, any officer, director or Employee, or enter into any other agreement with respect to any increase of benefits payable under its current severance or termination pay or any other policies, other than to permit the accelerated vesting of Options in accordance with the provisions of the Stock Option Plan;
(h) the Company shall not adopt or amend or make any contribution to any bonus, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation, other compensation or other similar plan, agreement, trust, fund or arrangements for the benefit of Employees except: with respect to its obligations under existing provisions of any of the Company Plans;
(i) the Company shall not undertake any reorganization of the Company or its Subsidiaries or enter into any transaction or series of transactions, take any action or permit any action that would have the effect of preventing the Offeror from obtaining a full tax cost “bump” pursuant to paragraph 88(1)(d) of the Tax Act in respect of the shares of any affiliates or subsidiaries and other non-depreciable capital property directly owned by the Company on March 21, 2010; and
(j) the Company shall, to the extent the Company has the right to direct the sale of Common Shares owned by Kinross Gold Corporation (“Kinross”) contained in section 5 of the Equity Participation Agreement, exercise that right in favour of, and cause such Common Shares to be tendered to, the Offer, but if such rights cannot be complied with without contravening the Equity Participation Agreement, the Company agrees to forego any rights to direct a sale of such Common Shares that it has under Section 5 of the Equity Participation Agreement during the currency of the Offer.
Appears in 1 contract
Conduct of Business by the Company. Except as expressly contemplated by this Agreement or as set forth described in Section 5.1 of the Company Disclosure Schedule, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant hereof to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Boardshall conduct its and its Subsidiaries’ business in the ordinary course consistent with past practice and, the Company and each of its subsidiaries shall, except to the extent that Parent consistent therewith, shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present and its Subsidiaries’ current business organizationorganizations, (ii) keep available the services service of its present and its Subsidiaries’ current officers and key employees, and (iii) preserve its and its Subsidiaries’ relationships with customers, suppliers, distributors, licensors, licensees, suppliers and others having significant business dealings with which it has business dealingsand its Subsidiaries. In additionWithout limiting the generality of the foregoing, except as permitted expressly contemplated by this Agreement or as described in Section 5.1 of the terms of this AgreementCompany Disclosure Schedule, during the period from the date hereof to the Effective Time, the Company shall not, and except as provided in the Company Scheduleshall not permit its Subsidiaries to, without the prior written consent of Parent, during such period, the Company which consent shall not do any of the following and shall not permit its subsidiaries to do any of the followingbe unreasonably withheld or delayed:
(a) Waive propose to adopt any stock repurchase rights, accelerate, amendments to or amend its articles of incorporation or change the period of exercisability of options bylaws or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedulecomparable organizational documents;
(b) Grant authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any severance Company Securities or termination pay to any officer or employee Subsidiary Securities (including, for the avoidance of doubt, restricted stock), except (i) pursuant to written agreements outstanding, or policies existing, on Stock Options outstanding prior to the date hereof and disclosed in accordance with the Company Schedule, existing terms of such Stock Options or adopt any new severance plan;
(c) Transfer or license pursuant to any person award or entity or otherwise extend, amend or modify in any material respect any rights grant already made under an Employee Plan prior to the Company Intellectual Propertydate hereof, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(dii) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor Warrants outstanding as of prior to the date of this Agreementhereof, and (iiiii) the issuance of shares of restricted stock with a fair market value at the time of grant of employee stock options, consistent with not to exceed $475,000 in the aggregate to the Company's established past practice for similarly situated employees, to non-officer ’s employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice in connection with annual year-end performance reviews and equity awards and (it being agreed that Parent shall not unreasonably withhold consent iv) the issuance of up to any non-exclusive license agreement related 17,500 shares of restricted stock to the Company's enterprise business and that Parent's failure ’s independent directors in accordance with the Company’s customary year-end awards;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities;
(d) other than cash dividends made by any wholly-owned Subsidiary of the Company to reasonably object to the Company or one of its wholly-owned Subsidiaries, split, combine or reclassify any such agreement within five business days shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any request for consent shall constitute such consentshares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(jf) Incurexcept in connection with capital expenditures that do not trigger the thresholds set forth in Sections 5.1(p)(iii), (iv) and (v), (i) incur or assume any long-term or preshort-pay any indebtedness for borrowed money, guarantee any indebtedness term debt or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any except for (A) debt securities, enter into any "keep well" or other incurred under the Company’s existing credit agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any fund operations of the foregoing other than (i) business in connection with the financing of ordinary course trade payables of business consistent with past practicepractice and (B) loans or advances to wholly-owned Subsidiaries, (ii) pursuant assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to existing credit facilities obligations of wholly-owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person except for travel advances in the ordinary course of business consistent with past practice to employees of the Company or any of its Subsidiaries or (iv) mortgage or pledge any of its or its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Encumbrances);
(g) other than in the ordinary course of business, enter into, amend, modify, terminate (partially or completely), grant any waiver under, or give any consent with respect to, any Material Contract or license material to the Company other than in the ordinary course of business or as required by Law;
(h) undertake any action set forth in Section 3.10(l), except, in the case of employees other than the officers of the Company, (i) in response to offers of employment from third parties, (ii) in connection with the assumption by an employee of new duties or responsibilities, (iii) as contemplated by this Agreementincreases in compensation to employees of the Company in connection with annual year-end performance reviews in amounts consistent with the ordinary course consistent with past practices or (iv) to the minimum extent necessary to comply with Section 409A of the Code without increasing the benefits provided to any Person; provided, however, that in the case of the general managers of each of the Company’s properties, the Company shall consult with Parent prior to taking any such actions;
(i) forgive any loans to employees, officers or directors or any of their respective Affiliates or Associates;
(j) make any deposits or contributions of cash or other property to or take any other action to fund or in any other way secure the payment of compensation or benefits under the Employee Plans or agreements subject to the Employee Plans or any other plan, agreement, contract or arrangement of the Company other than (i) matching contributions (including, without limitation, discretionary matching contributions) in accordance with the terms of any Employee Plan that is intended to qualify under Section 401(a) of the Code and (ii) deposits and contributions that are required pursuant to the terms of the Employee Plans or any agreements subject to the Employee Plans;
(k) Hire enter into any employeeCollective Bargaining Agreement;
(l) acquire, sell, lease, license or dispose of any property or assets in any single transaction or series of related transactions, except replacements for former non-officer employees(i) obsolete equipment, hired (ii) inventory in the ordinary course of business or (iii) pursuant to existing contracts or commitments and slot participation agreements entered into after the date hereof in the ordinary course of business consistent with past practice;
(lm) Adopt except as may be required as a result of a change in Law or amend in GAAP, make any employee stock purchase change in any of the accounting principles or employee stock option plan, practices used by it;
(i) make or adopt or amend change any material employee benefit planTax election (unless required by applicable Law), (ii) settle or compromise any material federal, state, local or foreign income Tax liability, other than with respect to any proceeding relating to a Tax liability that (A) is in progress as of the date hereof or (B) is in an amount less than or equal to the liability or reserve that has been recorded with respect thereto on the Balance Sheet or (iii) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes;
(i) enter into any employment lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) or (ii) modify, amend or exercise any right to renew any lease or sublease of real property;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, (ii) enter into any contract or collective bargaining agreement (other than offer letters in the ordinary course of business which would be reasonably likely to result in a Company Material Adverse Effect, (iii) authorize, incur or commit to incur any new capital expenditure(s) at or adjacent to the Company’s Rail City Casino property in Sparks, Nevada, which individually deviates by more than $200,000 or in the aggregate deviates by more than $1,000,000 when compared to the amounts set forth in the budget for such expenditure in the budget set forth on Schedule 5.1(p)(iii) of the Company Disclosure Schedule; (iv) authorize, incur or commit to incur any other new capital expenditure(s) which individually deviates by more than $200,000 or in the aggregate deviates by more than $1,000,000 when compared to the amounts set forth in the budget for such expenditure in the budget set forth on Schedule 5.1(p)(iv) of the Company Disclosure Schedule or (v) authorize, incur or commit to incur any other new capital expenditure(s) for fiscal year 2007 which individually deviates by more than $200,000 or in the aggregate deviates by more than $1,000,000 when compared to the Company’s budget for capital expenditures adopted for fiscal 2007, which new budget shall not exceed five percent of the Company’s net revenue and letter agreements entered into shall be provided to Parent following adoption; provided, that none of the foregoing shall limit any capital expenditure required pursuant to existing contracts or commitments;
(q) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, liability or obligation (absolute or accrued, asserted or unasserted, contingent or otherwise), other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings, claims, liabilities or obligations (i) reflected or reserved against in full in the financial statements of the Company and its Subsidiaries at December 31, 2005 or incurred since December 31, 2005 in the ordinary course of business consistent with past practice with employees who are terminable "at will")or (ii) the settlement, pay compromise, discharge or satisfaction of which does not include any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits obligation (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made the payment of money) to be performed by the Company or its Subsidiaries following the Effective Time and is in an amount of less than $200,000 individually or $1,000,000 in the ordinary course of businessaggregate;
(r) except as required by applicable Law or GAAP, consistent with past practice, or change revalue in any material respect any management policies of its properties or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend assets including without limitation writing-off notes or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, accounts receivable other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate except as required by applicable Law, convene any regular or delay collection special meeting (or any adjournment thereof) of any notes or accounts receivable in advance the stockholders of or beyond their regular due dates or the dates when Company other than the same would have been collected in the ordinary course of business;Company Stockholders Meeting; or
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as enter into a beneficiary or a loss payable payee or permit any such policy Contract to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take do any of the actions described foregoing or knowingly take any action which results or is reasonably likely to result in Section 5.1(a) through (y) aboveany of the conditions to the Merger set forth in Article VI not being satisfied.
Appears in 1 contract
Samples: Merger Agreement (Herbst Gaming Inc)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, terms or the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writingwriting and except as otherwise expressly provided in this Agreement or in Section 5.1 of the Company Disclosure Letter, carry on its business, in all material respects, business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes Taxes when due, due subject to good faith disputes over such debts or taxesdebts, and pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available . Without limiting the services generality of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Scheduleforegoing, without the prior written consent of Parent, during such periodthe period from the date of this Agreement and continuing until the earlier of 31 the termination of this Agreement pursuant to its terms or the Effective Time, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following, except as may be expressly contemplated or specifically permitted by this Agreement or as set forth in Section 5.1 of the Company Disclosure Letter:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans plans;
(b) Adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than the Merger);
(c) Grant any severance or termination pay to any officer, director or employee except pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance or amend any existing severance, retention or change in control plan;
(cd) Transfer or license to any person or entity or otherwise extend, amend amend, modify, permit to lapse or modify in fail to preserve any material respect any rights to of the Company Intellectual Property, Property Rights material to the Company's business as presently conducted or enter into grants planned to future patent, copyright or other intellectual property rightsbe conducted, other than non-exclusive nonexclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent or disclose to any non-exclusive license person who has not entered into a confidentiality agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)Trade Secrets;
(de) Declare, set aside aside, or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(ef) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, or any instrument or security that consists of a right to acquire such shares, except repurchases of unvested shares at cost in connection with the termination of the service employment relationship with any employee, director or consultant employee pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)hereof;
(fg) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into or exchangeable for shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of the Company Common Stock pursuant to the exercise of Options stock options or warrants therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired hereof in accordance with Section 5.1((k))their present terms;
(gh) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(hi) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) thereof; or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company Company; or enter into or amend any material joint ventureventures, strategic partnership partnerships or alliancealliances;
(ij) Sell, transfer, lease, license, mortgage, pledge, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(jk) Incur, Incur or assume or pre-pay any indebtedness for borrowed moneymoney or guarantee or otherwise become liable or responsible for (whether directly, guarantee contingently or otherwise) any such indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any securities of the foregoing Company other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, practice or (ii) pursuant to existing credit facilities as in effect on the date hereof in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee benefit plan or employee stock purchase or employee stock option plan, or adopt enter into or amend any material employee benefit planemployment contract, or enter into any employment contract consulting agreement or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"and as may be required by applicable Law), pay any special bonus or special remuneration to any director, employee officer or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentemployee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, officers or employees or consultants other than normal periodic salary increases for to non-officer employees made in the ordinary course of business, business consistent with past practice, or make any loans to any of its directors, officers or employees, agents or consultants, or make any change in its existing borrowing or lending arrangements for or on behalf of any of such persons pursuant to an employee benefit plan or otherwise;
(m) Pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any director or officer or pay or agree to pay or make any accrual or arrangement for payment to any officers or directors of the Company or any of its subsidiaries of any amount relating to unused vacation days; adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any Company or Company subsidiary director or officer, whether past or present, or amend in any material respect any management policies such existing plan, agreement or procedures;
(m) Make any payments outside of arrangement in a manner inconsistent with the ordinary course of business in an aggregate excess of $250,000foregoing;
(n) Except in the ordinary course of business, modifyModify, amend or terminate any material contract Material Contract or agreement to which the Company or any subsidiary thereof is a party party, including any joint venture agreement, or cancel any material debts or waive, release or assign any material rights or claims thereunder;
(o) Pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its subsidiaries;
(p) Enter intointo any leases (including any amendments, amend extensions or extend replacements of leases existing as of the date hereof) or any purchase, acquisition licensing, distribution, collaboration, sponsorship, advertising or other similar contracts, agreements, or obligations relating material to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(pq) Materially revalue Permit any material insurance policy naming it as a beneficiary or a loss payee to be cancelled or terminated;
(r) Revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practicesexcept as required by GAAP;
(qs) Make or change any election relating to Taxes, adopt or change any accounting method relating to Taxes, enter into any closing agreement relating to Taxes, file any amended Tax Return, settle or consent to any claim or assessment relating to Taxes, incur any obligation to make any payment of, or in respect of, any Taxes, or agree to extend or waive the statutory period of limitations for the assessment or collection of Taxes; or
(t) Fail to notify and consult with Parent promptly (i) after receipt of any material communication from the FDA and before giving any material submission to the FDA, and (ii) prior to making any material change to a study protocol, the addition of new trials, or a material change to the development timeline for any of its product candidates or programs;
(u) Authorize any single capital expenditure in excess of $200,000 or capital expenditure which in the aggregate exceed $500,000;
(v) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any (other than to wholly-owned subsidiary subsidiaries of the Company and the Company or another wholly-owned subsidiary of the Company and customary advances of business related expenses (including expenses related to business travel) to employees in the ordinary course for travel and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected business expenses in the ordinary course of business);
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(uw) Settle or compromise any suits or claims pending or threatened suits suit, action or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law claim which is material or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy which relates to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement)transactions contemplated hereby;
(x) Increase the aggregate dollar value of inventory owned by distributors Effectuate a "plant closing" or "mass layoff," as those terms are defined in the first Worker Adjustment and second tiers Retraining Notification Act of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 301988, 1998or effectuate any similar action under any foreign Law;
(y) Begin shipment Modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality agreement or non-competition Agreement to which Company is a party;
(z) Commence any litigation or arbitration other than in accordance with past practice or settle any litigation or arbitration for money damages or other relief in excess of $100,000, or if as part of such settlement the Company or any new products of its subsidiaries would agree to customersany restrictions on its operations, except for alpha versions and not more than 50 beta versions of any product delivered or which relates to customers solely for evaluation purposesthis Agreement or the Transactions; or
(zaa) Agree Enter into any written agreement, contract, commitment or arrangement to do any of the foregoing, or authorize, recommend, propose or agree, in writing or otherwise otherwise, or announce an intention to take do any of the actions described in Section 5.1(a) through (y) aboveforegoing.
Appears in 1 contract
Samples: Merger Agreement (Genzyme Corp)
Conduct of Business by the Company. Except as contemplated by During the period from the date of this Agreement or to the Effective Time, except as set forth in Section 5.1 4.01(a) of the Company ScheduleDisclosure Schedule or as consented to in writing in advance by Parent or as otherwise permitted pursuant to Section 4.01(a)(i) through (xiv) of this Agreement, the Company shall, and shall cause each of its Subsidiaries to, carry on its business (including making maintenance expenditures) in the ordinary course consistent with past practice and in compliance in all material respects with all applicable laws, rules, regulations and treaties and, to the extent consistent therewith, use all commercially reasonable efforts to preserve intact its current business organizations, keep available the services of its current officers, employees and consultants and preserve its relationships with customers, suppliers and others having business dealings with it with the intention that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time except as Parent's designees shall constitute a majority otherwise set forth in Section 4.01(a) of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall Disclosure Schedule or as otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as expressly permitted by the terms of or required pursuant to this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following not, and shall not permit its subsidiaries to do any of the followingits Subsidiaries to, without Parent’s prior written consent:
(ai) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(bx) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declaredeclare, set aside or pay any dividends on on, or make any other distributions (whether in cash, stock, equity securities property or propertyotherwise) in respect of, any of any capital stock its Capital Stock, except for dividends and distributions (including liquidating distributions) by a direct or indirect wholly owned Subsidiary of the Company to its parent, (y) split, combine or reclassify any capital stock of its Capital Stock, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside its Capital Stock or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(ez) Purchasepurchase, redeem or otherwise acquire, directly or indirectly, acquire any shares of capital stock Capital Stock or any other rights, warrants, calls or options to acquire any such Capital Stock, except for purchases, redemptions or other acquisitions of (A) Capital Stock or other securities of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination forfeiture of any Company Stock Options or Company Restricted Shares outstanding on the service relationship with date hereof and (B) the Convertible Notes;
(ii) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any employeeLien any of its Capital Stock or any securities convertible into, director or consultant exchangeable for, or any rights, warrants, calls or options to acquire, any such Capital Stock or convertible or exchangeable securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights, stock-based performance units or other equity or equity-based interests that are linked to the value of Company Common Stock, including pursuant to stock option or purchase agreements Contracts as in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (iA) the issuance, delivery and/or sale issuance of shares of Company Common Stock pursuant to upon the exercise of Company Stock Options therefor outstanding as of on the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired hereof in accordance with Section 5.1((k)their terms on the date hereof and (B) the issuance of shares of Company Common Stock upon conversion of the Convertible Notes);
(giii) Cause, permit amend the Company Certificate or propose any amendments to its Certificate of Incorporation, the Company Bylaws or other comparable charter or organizational documents (or similar governing instruments of any of its subsidiaries)the Company’s Subsidiaries except as may be required by the SEC or the Nasdaq Global Market;
(hiv) Acquire directly or agree to indirectly acquire (x) by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any person or division, business or equity interest of any corporationperson or (y) other than capital expenditures permitted by clause (vii) below or deferred taxes, partnership(A) any non-current asset or assets that, association or other business organization or division thereof individually, has a purchase price in excess of $75,000 or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to have a purchase price in excess of $500,000 and (B) current assets acquired outside the ordinary course of business of the Company or enter into any joint venture, strategic partnership or alliancein a manner inconsistent with past practice;
(iv) Selldirectly or indirectly (x) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or subject to any Lien or otherwise dispose of any of its properties or other assets which are materialor any interests therein (including securitizations), individually or in the aggregate, to the business of the Company, except other than sales of inventory and used equipment, or the license of the Company's products obsolete equipment in the ordinary course of business consistent with past practice or sales of unimproved land which is not used or contemplated to be used in the Company’s or any of the Company’s subsidiaries’ operations or (it being agreed y) enter into, modify or amend any lease of property, except for modifications or amendments that Parent shall are not unreasonably withhold consent to adverse in any non-exclusive license agreement related material respect to the Company's enterprise business and that Parent's failure to reasonably object to Company or any such agreement within five business days of any request for consent shall constitute such consent)its Subsidiaries;
(jvi) Incur, assume or pre-pay (x) incur any indebtedness for borrowed money, money or guarantee any such indebtedness or obligation of another person, issue or sell any debt securities or calls, options, warrants, calls warrants or other rights to acquire any debt securitiessecurities of the Company or any of its Subsidiaries, guarantee any debt securities of another person, enter into any "“keep well" ” or other agreement Contract to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing foregoing, other than (iA) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former nonshort-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into term borrowings incurred in the ordinary course of business consistent with past practice not to exceed $1,000,000 at any time outstanding, (B) letters of credit issued to support payment obligations in respect of equipment for the St. Gxxxxxx expansion project with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess face value not to exceed $50,000,000 at any time outstanding and (C) letters of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves credit issued in the ordinary course of business and consistent with past practicespractice to support payment obligations under sales contracts with an aggregate face value not to exceed $10,000,000 at any time outstanding, (y) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary (other than extensions of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected trade credit in the ordinary course of businessbusiness consistent with past practice or loans, advances or capital contributions to, or investments in, the Company or any wholly owned Subsidiary) or (z) repay, redeem, repurchase or otherwise retire, or otherwise make any payment in respect of, any indebtedness for borrowed money or any debt securities, or any rights, warrants, calls or options to acquire any debt securities, other than as required by their terms as in effect on the date of this Agreement;
(tvii) Materially delay or accelerate payment of make any account payable beyond or in advance of its due date or the date such liability would have been paid capital expenditure, other than (A) normal recurring capital expenditures which, in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount aggregate, are not in excess of $500,000;
18,000,000 for 2007 and (vB) Make any tax election not required by law or settle or compromise any material tax liability;
(wcapital expenditures for the St. Gxxxxxx expansion project in accordance with Section 4.01(a)(vii) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy of the Company Disclosure Schedule; provided that, notwithstanding and in addition to lapse (it being understood that the foregoing, the Company may renew purchase chlorine rail cars so long as the aggregate number of chlorine rail cars owned and leased by the Company (after giving effect to any insurance policy in effect such purchase) does not exceed the number of chlorine rail cars owned and leased by the Company as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) above.
Appears in 1 contract
Conduct of Business by the Company. Except as contemplated by Pending the Closing. Between the date of this Agreement or and the earlier of the Effective Time and the valid termination of this Agreement in accordance with Article 7, except as set forth in Section 5.1 of the Company Schedule, during the period from the date Disclosure Schedule or as otherwise expressly contemplated by any other provision of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective TimeAgreement, or such time as Parent's designees shall constitute a majority with the prior written consent of the Company BoardParent (not to be unreasonably withheld, conditioned or delayed), the Company shall, and shall cause each of its subsidiaries shallSubsidiaries to, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact conduct its present operations only in the ordinary course of business organizationin a manner consistent with past practice, and (ii) keep available the services of the current officers, employees and consultants of the Company and each of its present officers Subsidiaries and employees, to preserve the goodwill and (iii) preserve current relationships of the Company and each of its relationships Subsidiaries with customers, suppliers, distributors, licensors, licensees, suppliers and others other Persons with which it the Company or any of its Subsidiaries has business dealingsrelations. In additionWithout limiting the foregoing, except as permitted set forth in Section 5.1 of the Company Disclosure Schedule or as otherwise expressly contemplated by the terms any other provision of this Agreement, and except as provided in the Company Scheduleshall not, and shall not permit any of its Subsidiaries to, between the date of this Agreement and the earlier of the Effective Time and the valid termination of this Agreement in accordance with Article 7, directly or indirectly, take any of the following actions without the prior written consent of ParentParent (not to be unreasonably withheld, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:conditioned or delayed):
(a) Waive any stock repurchase rights, accelerate, amend its certificate of incorporation or change the period of exercisability of options bylaws or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Scheduleequivalent organizational documents;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstandingissue, or policies existingsell, on the date hereof and disclosed in the Company Schedulepledge, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect dispose of, in lieu of grant, transfer or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, encumber any shares of capital stock of the Company of, or its subsidiariesother Equity Interests in, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiariesSubsidiaries of any class, or any securities convertible into into, or exchangeable or exercisable for, any shares of such capital stockstock or other Equity Interests, or subscriptions, rightsany options, warrants or options other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities of the Company or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securitiesits Subsidiaries, other than (i) the issuance, delivery and/or sale issuance of shares of Company Common Stock pursuant to Shares upon the exercise of Company Options therefor or settlement of Company RSUs, in each case, outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired hereof in accordance with Section 5.1((k))their terms;
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) above.
Appears in 1 contract
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, terms and the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, (which for the purposes of this Article V shall include the Company and each of its subsidiaries shallsubsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing, to carry on its business, business diligently and in all material respects, accordance with good commercial practice and to carry on its business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, to pay its debts and taxes when due, due subject to good faith disputes over such debts or taxes, to pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, the Company will promptly notify Parent of any material event involving its business or operations. In addition, except as permitted by the terms of this Agreement, and except Agreement (other than as provided in Article 5.1 of the Company ScheduleSchedules), without the prior written consent of Parent, during such period, the Company shall not do any of the following following, and shall not permit any of its subsidiaries to do any of the following:
(ai) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, consultant or director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans plans;
(ii) Grant any severance or termination pay to any officer or employee except payments in amounts consistent with policies and past practices or pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Scheduleother, or adopt any new severance plan;
(ciii) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual PropertyCompany's intellectual property or other proprietary rights, or enter into grants to future patent, copyright or other intellectual property patent rights, other than non-exclusive licenses granted in the ordinary course of business and business, consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)practice;
(div) DeclareBuy any Intellectual Property of a third party or enter into any license agreement with respect to the Intellectual Property of any third party for an acquisition or license, set aside the price for which exceeds $50,000 individually (or in the aggregate for a single third party), other than "shrink wrap," "click wrap," and similar widely available commercial end-user licenses;
(v) Declare or pay any dividends on or make any other distributions (whether in cash, stock, equity securities stock or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(evi) Purchase, redeem Repurchase or otherwise acquire, directly or indirectly, any shares of capital stock except pursuant to rights of the Company or its subsidiaries, except repurchases repurchase of unvested any such shares at cost in connection with the termination of the service relationship with under any employee, consultant or director or consultant pursuant to stock option or purchase agreements in effect plan existing on the date hereof (which repurchases repurchase rights the Company shall be obligated to effectuate exercise if the repurchase price is less than the Offer PriceMerger Consideration);.
(fvii) Issue, deliver, sell, authorizeauthorize or propose the issuance, pledge delivery or otherwise encumber sale of, any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuanceissuance of Shares, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options stock options therefor outstanding as of the date of this Agreement, and (ii) Shares issuable pursuant to the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k))Option Plans;
(gviii) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws any charter document or other charter documents Bylaw (or similar governing instruments of any of its subsidiaries);
(hix) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnershippartnership interest, association or other business organization or division thereof orthereof, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company Company, or enter into any joint ventureventures, strategic partnership partnerships or alliancealliances;
(ix) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(lxi) Incur any indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities, or guarantee any debt securities of others;
(xii) Adopt or amend any employee benefit or employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit planplan (other than is necessary to comply with law), or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will")contract, pay any special bonus or special remuneration to any director, employee director or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentemployee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, officers or employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(mxiii) Make Pay, discharge or satisfy any payments outside of claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than in the ordinary course of business in an aggregate excess of $250,000business;
(nxiv) Make any grant of exclusive rights to any third party; or
(xv) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement involving payments of $50,000 or more to which the Company or any subsidiary Subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(pxvi) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SECGAAP, make any change in accounting methods, principles or practices, including inventory accounting practices;
(qxvii) Make or change any loansmaterial election in respect of Taxes, advances adopt or capital contributions tochange any accounting method in respect of Taxes, enter into any closing agreement, settle any claim or assessment in respect of Taxes, or investments in, consent to any other person extension or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary waiver of the Company and the Company limitation period applicable to any claim or another wholly-owned subsidiary assessment in respect of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments Taxes in an aggregate amount in excess of $500,00050,000 in the aggregate;
(vxviii) Make Commence any tax election not required by law litigation or settle any litigation for an amount in excess of the greater of $100,000 in the aggregate or compromise any material tax liabilitythe amount reserved in respect thereof in the Company Balance Sheet, as set forth in Section 5.1 of the Company Schedules;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(zxix) Agree in writing or otherwise to take any of the actions described in Section 5.1(a(i) through (yxviii) above.
Appears in 1 contract
Conduct of Business by the Company. Except as contemplated expressly permitted by this Agreement SECTION 4.1 or required by the terms of this Agreement, and except as set forth provided in Section 5.1 SECTION 4.1 of the Company Schedule, without the prior written consent of Parent, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, terms or the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore previously conducted and in material compliance in all material respects with all applicable laws and regulations, pay its material debts and taxes when due, due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as expressly permitted or contemplated by the terms of this Agreement, and except as provided in SECTION 4.1 of the Company Schedule, without the prior written consent of Parent, during such periodthe period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerateaccelerate (except in connection with the termination of the Company Option Plan), amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in the Company Schedulewriting or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright transfer or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent license to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)person future patent rights;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiariesCompany, except repurchases of unvested shares at cost in connection with the termination of the service employment relationship with any employee, director or consultant employee pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)or granted hereafter;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than than: (ix) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Company Stock Options therefor or Company Warrants outstanding as of the date of this Agreement, Agreement or granted pursuant to clause (y) hereof; and (iiy) the grant granting of employee stock optionsoptions to purchase up to seventy-five thousand (75,000) shares in the aggregate (and the issuance of Company Common Stock upon exercise thereof), in the ordinary course of business and consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k))practices;
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries)the Company Charter Documents;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof orthereof, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or (other than in the aggregate, to the business ordinary course of the Company business) or enter into any joint ventureventures, strategic partnership partnerships or alliancealliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory and the grant of end-user licenses in the ordinary course of business consistent with past practice, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay Incur any indebtedness for borrowed money, money or guarantee any such indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securitiessecurities of the Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, practice or (ii) pursuant in a principal amount not to existing credit facilities exceed $150,000 in the ordinary course of business, or (iii) as contemplated by this Agreementaggregate;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee director or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentemployee, or increase the salaries or wage rates (except for increases in the ordinary course of business for non-officer employees) or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants consultants;
(i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) or litigation (whether or not commenced prior to the date of this Agreement), other than normal periodic salary increases for non-officer employees made the payment, discharge, settlement or satisfaction, in the ordinary course of business, business consistent with past practicepractice or in accordance with their terms, of liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports or incurred since the date of such financial statements, or change (ii) waive the benefits of, agree to modify in any material respect manner, terminate, release any management policies person from or proceduresfail to enforce (without resorting to litigation) any confidentiality or similar agreement to which the Company is a party or of which the Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (including payments to financial, legal, accounting or other professional service advisors) in an aggregate excess of $250,000100,000 per month (except that such limit shall be $500,000 for the first month following the execution of this Agreement and except that the $100,000 limit shall not apply to amounts owed to the Principal Shareholder or for legal services performed through the date of this Agreement);
(n) Except in the ordinary course of businessbusiness consistent with past practice, materially modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, amend into or extend materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue Revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required or permitted by a change in law or in GAAP or the rules of the SECGAAP, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make Incur or enter into any loansagreement, advances contract or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary commitment outside of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practiceof business requiring payments by the Company in excess of $100,000 individually;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of the Company or settle or compromise any material income tax liability;; provided, however, that nothing in this SECTION 4.1(R) or elsewhere in this Agreement shall prohibit the Company from selling state tax losses to the extent permitted by applicable taxing authorities.
(ws) Cancel Amend or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as all of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesRelated Agreements; or
(zt) Agree in writing or otherwise to take any of the actions described in Section 5.1(aSECTION 4.1(A) through (ySECTION 4.1(S) above. In the event the Company shall request Parent to consent in writing to an action pursuant to this SECTION 4.1, Parent shall not unreasonably delay its determination as to whether to withhold such consent.
Appears in 1 contract
Samples: Merger Agreement (Medjet Inc)
Conduct of Business by the Company. Except as contemplated by this Agreement or (i) as set forth in Section 5.1 of the Company ScheduleDisclosure Letter, during (ii) as expressly permitted, contemplated or required by this Agreement, (iii) as required by applicable Law or (iv) with the period prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Boardshall, and shall cause each Company Subsidiary to, (x) conduct the business of the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, Company Subsidiary in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance course of business consistent with past practice in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and (y) use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributorspartners, licensors, licensees, distributors and others having business dealings with which it has with the intention that its goodwill and ongoing business dealingswill not be materially impaired on the Closing Date; provided, however, that no action or failure to take action with respect to matters specifically addressed by any of the provisions of the next sentence shall constitute a breach under this sentence unless such action or failure to take action would constitute a breach of such provision of the next sentence. In addition, and without limiting the generality of the foregoing, except (i) as permitted set forth in Section 5.01 of the Company Disclosure Letter, (ii) as expressly permitted, contemplated or required by the terms of this Agreement, and except (iii) as provided in the Company Schedule, without required by applicable Law or (iv) with the prior written consent of ParentParent (which shall not be unreasonably withheld, during such periodconditioned or delayed) from the date of this Agreement to the Effective Time, the Company shall not do any of the following not, and shall not permit its subsidiaries to any Company Subsidiary to, do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(bi) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declaredeclare, set aside or pay any dividends on (except for quarterly cash dividends consistent with past practice) on, or make any other distributions (whether in cash, stock, equity securities stock or propertyproperty or any combination thereof) in respect of, any of its capital stock, other equity interests or voting securities, other than dividends and distributions by a direct or indirect Company Subsidiary to its parent, (ii) split, combine, subdivide or reclassify any of its capital stock, other equity interests or voting securities or securities convertible into or exchangeable or exercisable for capital stock or splitother equity interests or voting securities, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any its capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside other equity interests or pay dividends voting securities, other than as permitted by Section 5.01(b), or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(eiii) Purchaserepurchase, redeem or otherwise acquire, directly or indirectlyoffer to repurchase, redeem or otherwise acquire, any capital stock or voting securities of, or equity interests in, the Company or any Company Subsidiary or any securities of the Company or any Company Subsidiary convertible into or exchangeable or exercisable for capital stock or voting securities of, or equity interests in, the Company or any Company Subsidiary, or any warrants, calls, options or other rights to acquire any such capital stock, securities or interests, except for acquisitions, or deemed acquisitions, of Common Stock or other equity securities of the Company in connection with (A) the withholding of Taxes in connection with the exercise, vesting and settlement of Company Stock Awards, (B) forfeitures of Company Stock Awards, (C) any distribution or payment (including upon settlement of any conversions) under the Convertible Notes and (D) the settlement of any Capped Call Transactions; provided that the Company may repay the Convertible Notes at scheduled maturity thereof in accordance with the terms of the Convertible Note Indenture;
(b) except for (x) transactions among the Company and one or more Company Subsidiaries or among one or more Company Subsidiaries and (y) arrangements in connection with or comprising the Capped Call Transactions, issue, sell, grant, pledge or otherwise encumber or subject to any Lien (other than Liens imposed by applicable securities Laws) (i) any shares of capital stock of the Company or its subsidiariesany Company Subsidiary other than the issuance of Common Stock upon the exercise, vesting or settlement of Company Stock Awards or conversion of the Convertible Notes, in each case in accordance with the terms thereof, (ii) any other equity interests or voting securities of the Company or any Company Subsidiary (except repurchases of unvested shares at cost pursuant to any Liens created in connection with the termination Credit Agreement), (iii) any securities convertible into or exchangeable or exercisable for capital stock or voting securities of, or other equity interests in, the Company or any Company Subsidiary, (iv) any warrants, calls, options or other rights to acquire any capital stock or voting securities of, or other equity interests in, the Company or any Company Subsidiary, (v) any rights issued by the Company or any Company Subsidiary that are linked in any way to the price of any class of Capital Stock or any shares of capital stock of any Company Subsidiary, the value of the service relationship Company, any Company Subsidiary or any part of the Company or any Company Subsidiary or (vi) any Company Voting Debt;
(c) (i) amend the Company Charter or the Company Bylaws, except as may be required by Law or the rules and regulations of the SEC or the NYSE, (ii) amend in any material respect the comparable charter or organization documents of any Company Subsidiary, or (iii) adopt a shareholders’ rights plan or enter into any agreement with respect to the voting of its capital stock;
(d) make or adopt any employeechange in its accounting methods, director principles or consultant pursuant practices, change its fiscal year or revalue of any of its material assets, except, in each case, insofar as may be required by a change in GAAP or Law (or interpretations thereof);
(e) directly or indirectly acquire or agree to stock option acquire in any transaction any material equity interest in or purchase agreements material business of any Person or material division thereof (including by way of acquisition of any material properties or assets thereof), except acquisitions (i) to the extent permitted under Section 5.01(o), (ii) acquisitions with a value in effect an amount not to exceed $2,000,000 in the aggregate or (iii) acquisitions with respect to transactions between the Company, on the date hereof (which repurchases one hand, and any Company Subsidiary, on the other hand, or between Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)Subsidiaries;
(f) Issue, deliver, sell, authorizelease (as lessor), pledge license, mortgage, sell and leaseback or otherwise encumber subject to any shares Lien (other than Permitted Liens), or otherwise dispose of the capital stock of the Company any material properties or assets or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, material interests therein other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practiceall material respects, (ii) in an amount not to exceed $1 million in the aggregate, (iii) with respect to transactions between the Company, on the one hand, and any Company Subsidiary, on the other hand, or between Company Subsidiaries, (iv) imposition of Liens on all assets of the Company and the Company Subsidiaries pursuant to existing credit facilities the terms of the Credit Agreement and any ancillary agreements contemplated thereby or (v) assets that are at the end of their useful life or statutory term;
(g) assign, transfer, cancel, amend, modify, fail to use commercially reasonable efforts to renew or fail to use commercially reasonable efforts to extend any material Company Permit;
(h) settle or compromise any material litigation, or release, dismiss or otherwise dispose of any claim, liability, obligation or arbitration, other than settlements or compromises of litigation or releases, dismissals or dispositions of claims, liabilities, obligations or arbitration that involve the payment of monetary damages (excluding monetary damages that are fully covered by the Company’s insurance policies) in an amount not in excess of $1 million individually or $2 million in the aggregate by the Company or any Company Subsidiary and do not impose material restrictions on the business or operations of the Company and the Company Subsidiaries, taken as whole, in each case, except as permitted by Section 6.05 and except for claims and litigation with respect to which an insurer (but neither the Company nor any Company Subsidiary) has the right to control the decision to settle;
(i) abandon, allow to lapse, cancel, convey title to (in whole or in part) or exclusively license any material Intellectual Property Rights owned by the Company or any Company Subsidiary, other than in the ordinary course of business;
(j) cancel, materially reduce, terminate or fail to use commercially reasonable efforts to (iiii) keep in force material insurance policies and (ii) in the event of a termination, cancellation or lapse of any material insurance policies, obtain replacement policies (which may be via self-insurance) providing insurance coverage with respect to the material assets, operations and activities of the Company and the Company Subsidiaries as contemplated by this Agreementis currently in effect in all material respects;
(k) Hire make, change or revoke any employeematerial election with respect to Taxes (other than any initial elections with respect to any newly formed entity), file any amended material Tax Return, settle or compromise any material Tax liability, enter into any closing agreement with respect to any material Tax or surrender any right to claim a material Tax refund, in each case other than in the ordinary course of business consistent with past practice in all material respects;
(l) (i) materially increase the compensation or benefits payable to any current or former director, officer or employee of the Company or any Company Subsidiary, except replacements for market-based increases and merit or promotion-based increases in compensation as part of the Company’s and the Company Subsidiaries’ normal review process; (ii) accelerate the time of payment, funding or vesting of any compensation or benefits payable to any current or former non-director, officer employeesor employee of the Company or any Company Subsidiary; or (iii) terminate or materially amend any material Company Benefit Plan or adopt or enter into any plan, hired agreement or arrangement that would be a material Company Benefit Plan if in effect on the date hereof, in each case other than (A) as required by the terms of any Company Benefit Plan or (B) in the ordinary course of business consistent with past practice in all material respects;
(i) hire any employees whose annual base salary exceeds $215,000, other than hiring any such employee to (1) replace an employee who dies, becomes disabled, resigns or whose employment is terminated or (2) fill a requisition that is open as of the date of this Agreement or (ii) terminate the employment of any employee whose annual base salary exceeds $215,000, other than terminations of employment for cause as determined by such employee’s employing entity;
(n) (i) recognize or certify any Labor Organization as the bargaining representative for any employees of the Company or its Subsidiaries or (ii) implement any employee layoffs, furloughs, reductions in force, plant closings, material reductions in compensation or other similar actions, in each case, that require notice to affected employees pursuant to the Worker Adjustment and Retraining Notification Act of 1988 and any similar foreign, state or local law (“WARN”);
(o) make or authorize capital expenditures except (i) as budgeted in the Company’s current plan that was made available to Parent (the “Capital Expenditures Plan”); (ii) otherwise in an amount not to exceed $10 million in the aggregate; (iii) emergency capital expenditures; or (iv) to the extent permitted under Section 5.01(e)(i);
(p) adopt a plan of complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization of the Company or any Company Subsidiaries;
(q) except with respect to any intercompany arrangements, (i) incur any Indebtedness for borrowed money or guarantee the Indebtedness for borrowed money, except for (1) Indebtedness incurred under the Credit Agreement for working capital purposes or in connection with payments to be made under the Convertible Notes, including without limitation the retirement or repayment of the Convertible Notes (together with all accrued interest, fees and other expenses) at maturity, in each case, in accordance with their respective terms or (2) capital leases, purchase money financing for personal property, equipment financing and letters of credit in the ordinary course of business consistent with past practice;
; (lii) Adopt make any loans or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration advances to any director, employee or consultant Person that is not a Company Subsidiary (except pursuant for extensions of credit to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made customers in the ordinary course of business, consistent with past practice); or (iii) make any capital contributions to, or change in investments in, any material respect any management policies or proceduresPerson that is not a Subsidiary of the Company;
(mr) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter under, or enter into, amend renew, affirmatively determine not to renew, materially amend, materially modify, terminate, cancel, exercise any options or extend rights of first offer or refusal under or terminate any contractsMaterial Contract, agreementsmaterial Real Estate Lease, Filed Company Contract, or obligations relating to any Contract that would be a Filed Company Contract, Material Contract or material Real Estate Lease if in existence on the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarterdate hereof;
(s) Materially accelerate conduct business or delay collection of any notes operations in Russia, including selling or accounts receivable in advance of delivering the Company’s products into Russia or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of businessseeking exemptions to U.S. economic sanctions for such activities;
(t) Materially delay engage in any transaction with, or accelerate payment enter into any agreement, arrangement or understanding with, any Affiliate of any account payable beyond the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC, in advance of its due date or the date such liability each case, that would have been paid in the ordinary course of business;be required to be disclosed pursuant to Item 404; or
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise agree to take any of the actions described in Section 5.1(a) through (y) aboveforegoing actions.
Appears in 1 contract
Samples: Merger Agreement (KAMAN Corp)
Conduct of Business by the Company. Except as contemplated by this Agreement or (i) as set forth in Section 5.1 on Schedule 5.1(a) of the Company ScheduleDisclosure Letter, during (ii) as required in the period event of an emergency to protect life or protect against an imminent and substantial threat to property or the environment, (iii) as required as required by Law, (iv) as expressly required or expressly permitted by this Agreement, or (v) as otherwise consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company BoardClosing Date, the Company shall, and shall cause each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and Subsidiaries to:
(i) use its commercially reasonable efforts to (A) conduct its business accordance with its ordinary course of business consistent with past practices and policies to practice, (iB) preserve substantially intact its present business organizationorganization in accordance with its ordinary course of business consistent with past practice, (iiC) keep available the services of its present directors, officers and employees, and key employees on commercially reasonable terms (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course for terminations of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request employment services for consent shall constitute such consent);
(dcause) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice and (D) preserve substantially intact its existing business relationships with its material customers, lenders, suppliers, lessors, lessees, working interest owners and others having material business relationships with it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection accordance with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the its ordinary course of business consistent with past practice;
(lii) Adopt or amend any employee stock purchase or employee stock option planother than Permitted Leakage, or adopt or amend any material employee benefit plannot make, permit or enter into any employment contract Leakage transactions or collective bargaining agreement Leakage payments;
(iii) not split, combine or reclassify any Interests of the Company;
(iv) not make or commit to make any capital expenditures for the period prior to January 1, 2025 in excess of 115% of the aggregate amount in the capital expenditure budget set forth on Schedule 5.1(a)(iv) of the Company Disclosure Letter (the “2024 Company Capital Expenditures Budget”), other than offer letters capital expenditures to repair damage resulting from insured casualty events or operational conditions of the Wxxxx or required on an emergency basis or for the safety of individuals, assets or the environment (provided that the Company shall notify Parent of any such emergency expenditure as soon as reasonably practicable);
(v) except as reasonably required in order to conduct any operations or expenditures contemplated under the DC&E Well Detail portion of the 2024 Company Capital Expenditures Budget, not (A) affirmatively terminate or materially amend any Oil and letter agreements entered Gas Leases in a materially detrimental manner to the Company or any of its Subsidiaries, (B) terminate, materially amend, waive, modify, or extend any Company Material Contracts or enter into any new contract which would constitute a Company Material Contract if executed prior to the date of this Agreement, other (x) than the execution or extension of a Contract for the sale, exchange or marketing of Hydrocarbons in the ordinary course of business consistent with past practice with employees who are that is terminable "at will"), pay any special bonus by the Company or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees Subsidiaries without penalty or consultants other payment (other than normal periodic salary increases any ongoing obligation pursuant to such contract that is not caused by such termination) upon ninety (90) days’ or less notice or (y) amendments, refinancings or replacements of the Existing Credit Agreement permitted by the proviso to the definition thereof, (C) or other than Preferential Rights arising under customary A.A.P.L. form joint operating agreements, unit agreements or participation agreements, grant or create any Preferential Right with respect to the Company Assets or any consent (other than any consent that cannot, by its terms, be unreasonably withheld, conditioned or delayed by the holder thereof) with respect to the Properties of the Company;
(vi) not transfer, sell, exchange, hypothecate, encumber or otherwise dispose of any portion of the Company Assets; except for non-officer employees (A) sales and dispositions of Hydrocarbons or equipment and materials that are surplus, obsolete or replaced made in the ordinary course of business consistent with past practices, (B) the exchange or swap of Properties or other assets in the ordinary course of business consistent with past practice, (C) pursuant to an agreement of the Company or any of its Subsidiaries set forth in Schedule 5.1(a)(vi) of the Company Disclosure Letter, or (D) other sales and dispositions of the Company Assets in the ordinary course of business consistent with past practices, with value not exceeding $250,000,000 in the aggregate or (E) transactions solely between the Company and any of its Wholly Owned Company Subsidiary (or solely between Wholly Owned Company Subsidiaries);
(vii) not enter into, commence, settle or compromise any litigation affecting the Company Assets or the Company or any of its Subsidiaries other than (A) the settlement of such litigation involving only the payment of money (not covered by insurance) by the Company or any of its Subsidiaries of any amount not exceeding $20,000,000 individually or $50,000,000 in the aggregate and which does not involve any material non-monetary restriction on future activity or conduct or an admission of criminal wrongdoing by the Company or any of its Subsidiaries, and (B) such litigation in respect of Taxes, which shall be governed exclusively by Section 5.1(a)(xix);
(viii) not amend or otherwise change the Organizational Documents of the Company or its Subsidiaries (other than ministerial changes);
(ix) not issue, sell, deliver, grant, pledge, transfer, dispose of or otherwise subject to any Encumbrance (other than any Permitted Encumbrance) any Interests of the Company or any of its Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any such shares, or any other Interest in the Company or any of its Subsidiaries, other than issuances by the a Subsidiary that is wholly owned, directly or indirectly by the Company (a “Wholly Owned Company Subsidiary”), to the Company or any other Wholly Owned Company Subsidiary;
(x) not acquire or agree to acquire (including by merging or consolidating with, purchasing any equity interest in or a substantial portion of the assets of, licensing, or by any other manner) any corporation, partnership, limited liability company, other business organization or division thereof or any material amount of assets, or enter into (or agree to enter into) any joint venture, strategic alliance, exclusive dealing, noncompetition or similar contract or arrangement other than (A) transactions solely between the Company and a Wholly Owned Company Subsidiary (or solely among wholly-owned Subsidiaries of the Company), (B) acquisitions of fee minerals, non-participating royalty interests, overriding royalty interests, royalty interests, executive rights, leasehold royalty interests, production payments, net profits interests or carried interests in the ordinary course of business consistent with past practice where the aggregate amount of the consideration paid or transferred by the Company or any of its Subsidiaries in connection with all such acquisitions would not exceed $250,000,000, (C) acquisitions as to which the aggregate amount of the consideration paid or transferred by the Company or any of its Subsidiaries in connection with all such acquisitions is $50,000,000 in the aggregate, (D) acquisitions, leases, transfer, exchange or swap of inventory in the ordinary course of business consistent with past practice or (E) non-exclusive licenses of Intellectual Property Rights in the ordinary course of business;
(xi) not adopt any plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization, merger, consolidation or other reorganization, other than such transactions among Wholly Owned Company Subsidiaries;
(xii) (x) not incur any Indebtedness for borrowed money or assume, guarantee or endorse, or otherwise become responsible for, any such Indebtedness of any Person, or make any loans of borrowed money, except for (A) Indebtedness under the Existing Credit Agreement in the ordinary course of business consistent with past practice, (B) Indebtedness incurred among Wholly Owned Company Subsidiaries and/or the Company, (C) guarantees by the Company or any of its Subsidiaries of Indebtedness of a Wholly Owned Company Subsidiary, (D) advances for expenses required under customary joint operating agreements to operators of Properties of the Company or any of its Subsidiaries in the ordinary course of business consistent with past practice, or change (E) advances for reimbursable employee expenses in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business consistent with past practice; or (y) not make or assume any Derivatives, including any Derivative intended to benefit from or reduce or eliminate the risk of fluctuations in an aggregate excess the price of $250,000;
(n) Except Hydrocarbons or other commodities, other than in the ordinary course of businessthe Company’s business in accordance with the Company’s current policies;
(xiii) except as required by a Company Benefit Plan in accordance with its terms as in effect as of the date hereof and set forth on Schedule 3.16(e) of the Company Disclosure Letter, modifynot (A) accelerate or permit the acceleration of any vesting, payment or funding of, the compensation or benefits payable or to become payable or the benefits provided to any current or former employee, officer, director other individual service provider of the Company or any of its Subsidiaries, (B) increase the compensation or benefits payable to or to become payable to any current or former employee, officer, director or other individual service provider of the Company or any of its Subsidiaries (or any of their respective dependents or beneficiaries), including forgiving any indebtedness, (C) grant or announce the grant of or commit to grant any cash or equity or equity-based incentive awards (including awards under the Company Phantom Equity Plan or the Company LTIP), bonus, retention, change in control, transaction, severance or similar compensation or any increase in the salaries, bonuses or other compensation and benefits payable to any current or former employee, officer, director or other individual service provider of the Company or any of its Subsidiaries (or any of their respective dependents or beneficiaries), (D) enter into any employment, severance, or retention agreement with any of its current or former directors, executive officers, employees or other service providers, (E) establish, adopt or agree to adopt, amend or terminate any material contract Company Benefit Plan or any other benefit or compensation plan, policy, program, agreement or arrangement that would constitute a Company Benefit Plan if in effect on the date hereof, or (F) provide any funding for any rabbi trust or similar arrangement;
(xiv) not hire, or permit the hiring of, any additional employee or individual service provider providing services to which the Company or any subsidiary thereof is of its Subsidiaries, who would be a party Vice President or waiveabove or whose annual target total direct compensation opportunity (i.e., release the sum of annual base compensation, target short-term incentive compensation opportunity and target long-term incentive compensation opportunity) and would exceed $400,000 (each, a “Company Covered Individual”), and not promote any Company Covered Individual or assign any material rights or claims thereunderan individual who would be a Company Covered Individual following such promotion;
(oxv) Enter into, amend or extend any contracts, agreementsnot terminate, or obligations relating to permit the distributiontermination of, sale, license or marketing by third parties of the Company's products or products licensed by the Companyany Company Covered Individual, other than agreements“for cause”, extensions and not effectuate or amendments provide notice of any plant closing, relocation of work or mass layoff that grant non- exclusive rights to such third parties and provide for termination by would require notice or incur any liability or obligation under the Company for convenience on not more than 60 days' noticeWARN Act;
(pxvi) Materially revalue not enter into any Labor Agreement or recognize or certify any labor union, labor organization, works council, employee representative or group of employees as the bargaining representative for any employees of the Company or any of its assets Subsidiaries;
(xvii) not waive or release any noncompetition, nonsolicitation, nondisclosure or other restrictive covenant obligation of any current or former employee or independent contractor of the Company or any of its Subsidiaries;
(xviii) not make any material change in any method of accounting or accounting practice or policy, except as required by GAAP or applicable Law;
(xix) not (A) make (other than the booking of reserves with respect to any election made in the ordinary course of business and consistent with past practices) orpractice), except as required by a change in law or in GAAP or the rules of the SEC, make revoke any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary material Tax election of the Company and or any of its Subsidiaries, (B) change any annual Tax accounting period of the Company or another wholly-owned subsidiary any of its Subsidiaries, (C) change any material method of accounting of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
Subsidiaries for Tax purposes, (uD) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle settle, or compromise any material tax liability;
Tax Proceeding with respect to any Taxes of the Company or any of its Subsidiaries, (wE) Cancel or terminate file any material insurance policy naming it amended Tax Return with respect to the Company or any of its Subsidiaries or file any material Tax Return of the Company or any of its Subsidiaries in a manner materially inconsistent with past practice of the Company or any of its Subsidiaries, (F) enter into any closing agreement with respect to Taxes of the Company or any of its Subsidiaries or (G) voluntarily and affirmatively act to surrender any right to claim a material Tax refund of the Company or any of its Subsidiaries, each case if such action is reasonably likely to result in an increase to a Tax liability of the Company or its Subsidiaries that is material to the Company or any of its Subsidiaries, taken as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposeswhole; or
(zxx) Agree in writing not enter into an agreement or otherwise commitment that would cause the Company or its Subsidiaries to take violate any of the actions described in Section 5.1(a) through (y) aboveforegoing covenants.
Appears in 1 contract
Conduct of Business by the Company. Except During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing, except: (a) to the extent that Parent shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed); or (b) as expressly contemplated by this Agreement or the Company Disclosure Letter, the Company shall conduct its operations in the ordinary course consistent with past practice and use reasonable best efforts to preserve the present business and operations and goodwill of the Company, keep available the services of its officers and employees and maintain satisfactory relationships with licensors, suppliers, distributors, clients and others having business relationships with them (with the Company’s actions taken in response to COVID-19 prior to the date of this Agreement being deemed to be in the ordinary and usual course of business, consistent with past practice when determining whether actions taken after the date of this Agreement are in the ordinary and usual course of business consistent with past practice; provided, that, during any period of full or partial suspension of operations related to COVID-19, the Company may take reasonable actions outside of the ordinary and usual course of business (x) to the extent reasonably necessary to protect the health and safety of the employees of the Company or (y) in response to COVID-19 Measures; and provided, further, that, with respect to any material action taken, or omitted to be taken, by the Company that is a material change from recent past custom and practice as of the date hereof (including, for the avoidance of doubt, recent past custom and practice in light of COVID-19), the Company shall, where reasonably practicable, provide prior notice to Parent with respect thereto (and where such prior notice has not been provided, provide notice to Parent reasonably promptly thereafter), and, where reasonably practicable, consult with Parent in good faith in connection therewith). Without limiting the generality of the foregoing, except as required or expressly permitted by the terms of this Agreement or as set forth in Section 5.1 on Schedule 5.01 of the Company ScheduleDisclosure Letter, or as required by Applicable Legal Requirements, without the prior written consent of Parent (which will not be unreasonably withheld, conditioned or delayed), during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, terms or the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such periodClosing, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive except as otherwise required by any stock repurchase rightsexisting Company Benefit Plan, acceleratethis Agreement or Applicable Legal Requirements: (i) increase or grant any increase in the compensation, bonus, fringe or other benefits of, or pay, grant or promise any bonus to, any current or former employee, director or independent contractor except for any such Person with an annual base salary or wage rate of less than $250,000 in the ordinary course of business consistent with past practice; (ii) grant or pay any severance or change in control pay or benefits to, or otherwise increase the severance or change in control pay or benefits of, any current or former employee, director or independent contractor; (iii) enter into, amend or change the period of exercisability of options terminate any Company Benefit Plan or restricted stockany employee benefit plan, policy, program, agreement, trust or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments arrangement that would have constituted an Company Benefit Plan if it had been in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, effect on the date hereof and disclosed of this Agreement (other than annual renewal of welfare plans in the ordinary course of business consistent with past practice that do not result in more than a de minimis increase in cost to the Company); (iv) take any action to accelerate the vesting or payment of, or otherwise fund or secure the payment of, any compensation or benefits under any Company ScheduleBenefit Plan; (v) grant any equity or equity-based compensation awards; or (vi) hire or engage any new employee or consultant if such new employee or consultant will receive annual base compensation in excess of $250,000, other than in the ordinary course of business consistent with past practice; or terminate the employment or engagement, other than for cause or due to death or disability, of any employee or consultant receiving annual base compensation in excess of $250,000;
(b) Grant (i) transfer, sell, assign, license, sublicense, covenant not to assert, encumber, subject to a Lien (other than a Permitted Lien), impair, abandon, fail to diligently maintain, allow to lapse, transfer or otherwise dispose of, any severance right, title or termination pay interest of the Company in or to any officer or employee except pursuant Intellectual Property material to written agreements outstanding, or policies existing, on any of the date hereof and disclosed in businesses of the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses of Owned Intellectual Property granted to customers in the ordinary course of business and consistent with past practice practice); (it being agreed that Parent shall not unreasonably withhold consent ii) extend, amend, waive, cancel or modify any material rights in or to any non-exclusive license agreement related Intellectual Property material to any business of the Company's enterprise ; (iii) fail to diligently prosecute the Patent applications owned by the Company other than applications that are immaterial or that the Company, in the exercise of its good faith business and that Parent's failure judgment, has determined to reasonably object abandon; (iv) disclose, divulge, furnish to or make accessible to any such third party who is not subject to an enforceable written agreement within five business days to maintain the confidentiality thereof any Trade Secrets constituting Owned Intellectual Property or any Trade Secrets of any request for consent shall constitute such consent)Person to whom the Company has a confidentiality obligation; or (v) subject any material Software constituting Owned Intellectual Property to Copyleft Terms;
(dc) Declare(i) declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any membership interests, capital stock or any other Equity Interests, as applicable, in the Company except pursuant to existing rights of first refusal or rights of first offer in favor of the Company existing as of the date of this Agreement; (iii) grant, issue, transfer, sell or otherwise dispose, or authorize to issue sell, or otherwise dispose any membership interests, capital stock or any other Equity Interests (such as stock options, stock units, restricted stock or other Contracts for the purchase or acquisition of such capital stock), as applicable, in the Company's wholly-owned subsidiaries may ; (iv) declare, set aside or pay dividends any dividend or make any other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
distribution; or (ev) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issueissue, deliver, sell, authorize, pledge or otherwise encumber encumber, or agree to any of the foregoing with respect to, any shares of the capital stock of the Company or any of its subsidiaries, other Equity Interests or ownership interests or any securities convertible into or exchangeable for shares of such capital stockstock or other Equity Interests or ownership interests, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or other Equity Interests or ownership interests or any securities convertible into or exchangeable for shares of capital stockstock or other equity securities or other ownership interests, or enter into other agreements or commitments of any character obligating it to issue any such shares shares, equity securities or other ownership interests or convertible or exchangeable securities;
(d) amend the Company Organizational Documents, other than or form or establish any Subsidiary;
(e) (i) the issuancemerge, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and consolidate or combine with any Person; or (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest Equity Interest in or a material substantial 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, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliancethereof;
(if) Sellsell, lease, license, encumber sublicense, abandon, divest, transfer, cancel, abandon or permit to lapse or expire, dedicate to the public, or otherwise dispose of, or agree to do any of the foregoing, or otherwise dispose of any properties real or tangible assets which are materialor properties, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing any disposition of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired obsolete assets in the ordinary course of business consistent with past practice;
(lg) Adopt (i) issue or amend sell any employee stock purchase debt securities or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) acquire any debt securities of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or guarantee any subsidiary thereof is a party debt securities of another Person; (ii) make, incur, create or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make assume any loans, advances or capital contributions to, or investments in, or guarantee any other person or entityIndebtedness of, any Person except for loans, advances, advances or capital contributions pursuant to and in accordance with the terms of agreements or investments between any wholly-owned subsidiary legal obligations existing as of the date of this Agreement, in each case as set forth on Schedule 5.01(g) of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses Disclosure Letter; (including expenses related to business traveliii) to employees except in the ordinary course and of business consistent with past practice, create any material Liens on any material property or assets of the Company in connection with any Indebtedness thereof (other than Permitted Liens); (iv) cancel or forgive any Indebtedness owed to the Company; or (v) make, incur or commit to make or incur any material capital expenditures, other than in the ordinary course of business consistent with past practice;
(rh) Authorize release, assign, compromise, settle or agree to settle any Legal Proceeding material to the Company or its respective properties or assets;
(i) (A) modify, terminate, cancel, or modify or amend in any material respect, any Company Material Contract; (B) enter into any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement; (C) waive, delay the exercise of, release or assign any material rights or claims under any Company Material Contract; or (D) incur or enter into a Contract requiring the Company to make any capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 250,000 in any calendar quartertwelve-month period;
(sj) Materially accelerate except as required by U.S. GAAP (or delay collection any interpretation thereof) or Applicable Legal Requirements, make any change in accounting methods, principles or practices;
(i) make or change any material Tax election; (ii) settle or compromise any material Tax Liability or claim or assessment for a material amount of Taxes; (iii) change (or request to change) any notes method of accounting for Tax purposes; (iv) file an amendment to any material Tax Return; (v) waive or accounts receivable extend any statute of limitations in advance respect of a period within which an assessment or beyond their regular due dates reassessment of material Taxes may be issued (other than any extension pursuant to an extension to file any Tax Return); (vi) knowingly surrender any claim for a refund of Taxes; (vii) enter into any “closing agreement” as described in Section 7121 of the Code (or the dates when the same would have been collected any similar Legal Requirement) with any Governmental Entity; (viii) incur any Liability for Taxes other than in the ordinary course of business; or (ix) prepare any Tax Return in a manner inconsistent with past practice;
(tl) Materially delay authorize, recommend, propose or accelerate payment announce an intention to adopt a plan of complete or partial liquidation, restructuring, recapitalization, dissolution or winding-up of the Company;
(m) subject to clause (c) above, enter into or amend any agreement with, or pay, distribute or advance any assets or property to, any of its officers, directors, employees, partners, stockholders or other Affiliates, other than payments or distributions relating to obligations in respect of arms-length commercial transactions pursuant to the agreements set forth on Schedule 5.01(m) of the Company Disclosure Letter as existing on the date of this Agreement;
(n) form or commence the operation of any account payable beyond business or any corporation, partnership, joint venture, business association or other business organization or division thereof or engage in advance of its due date or the date such liability would have been paid in the ordinary course any material new line of business;
(uo) Settle implement any employee layoffs, plant closings, or compromise similar events that individually or in the aggregate would give rise to any suits obligations or claims Liabilities on the part of the Company under WARN or threatened suits any similar state or claims for payments in an aggregate amount in excess of $500,000local “mass layoff” or “plant closing” Legal Requirement;
(vp) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel enter into, amend or terminate any material insurance policy naming it as collective bargaining agreement or other agreement with a beneficiary labor union, works council or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposessimilar organization; or
(zq) Agree agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 5.1(a5.01(a) through (yp) above. Nothing contained in this Agreement shall give Parent, directly or indirectly, any right to control or direct the operations of the Company prior to the Closing. Prior to the Closing, each of the Company and Parent shall exercise, consistent with the other terms and conditions of this Agreement, complete control and supervision over their respective businesses.
Appears in 1 contract
Samples: Merger Agreement (D8 Holdings Corp.)
Conduct of Business by the Company. Except (a) During the Interim Period, except as contemplated expressly required by this Agreement or as set forth in Section 5.1 of the Company Schedule, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of ParentAcquiror (which consent shall not be unreasonably withheld, during such periodconditioned or delayed), Member shall, and shall cause its Affiliates (including Parent and the Company) to, use commercially reasonable efforts to (x) cause the Company shall not do any of to conduct the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products Business in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent including by continuing to any non-exclusive license agreement make capital expenditures and otherwise managing the working capital of the Company in the ordinary course of business consistent with past practice) and in compliance with all applicable Laws and (y) use commercially reasonable efforts to maintain and preserve the Company’s present business organization and goodwill related to the Business with third parties and keep available the services of the persons acting as officers or employees of the Company (even if employed by Affiliates of the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days ).
(b) Without limiting the generality of any request for the foregoing, during the Interim Period, except as expressly required by this Agreement or with the prior written consent of Acquiror (which consent shall constitute such consentnot be unreasonably withheld, conditioned or delayed), Member and the Company shall not, and shall cause their Affiliates not to, (solely with respect to the Business), directly or indirectly:
(i) amend the Organizational Documents of the Company or create any subsidiary of the Company;
(jii) Incurissue, assume redeem, sell, pledge, split or encumber the capital stock of the Company or other securities of the Company (including any warrants, options, convertible or exchangeable securities, subscriptions, rights (including any pre-pay any indebtedness for borrowed money, guarantee any indebtedness emptive or obligation of another person, issue or sell any debt securities or options, warrantssimilar rights), calls or other rights to purchase or acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition securities of the Company) or enter into any arrangement having agreement with respect thereto or make any changes (by recapitalization, reclassification, stock dividend, stock split, combination, reorganization or otherwise) in the economic effect capital structure of, or amend the terms of any equity interest in the Company;
(iii) sell, lease, convey, transfer, exchange, swap or otherwise dispose of or incur any Encumbrance (other than a Permitted Encumbrance) on any assets or properties of the foregoing other than Business (iincluding equity interests in the Company), except for (A) in connection with the financing any such sale, lease, conveyance, transfer, exchange, swap or disposal of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities assets or properties having a value which individually or does not exceed $50,000 and which is in the ordinary course of business, business consistent with past practice or (iiiB) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired sales of inventory in the ordinary course of business consistent with past practice;
(liv) Adopt or amend make any employee stock purchase or employee stock option plandistribution with respect to the equity of the Company, or adopt otherwise make any payments in cash or amend any material employee benefit planin kind, or enter into advance or loan any employment contract funds to, the Parent or collective bargaining agreement any of its Affiliates, except for (other than offer letters and letter A) payments of sums owed to Parent or its Subsidiaries in accordance with the terms of any agreements entered into or arrangements in effect at the date of this Agreement (including the Inventory Note) or obligations incurred by the Company after the date of this Agreement in the ordinary course of business consistent with past practice prior to the Calculation Time or (B) dividends or distributions of sums received with employees who are terminable "at will"), pay any special bonus or special remuneration regard to any directorProject and related Customer Agreement in the ordinary course of business consistent with past practice shortly prior to either its achievement of Permission to Operate from the applicable utility or the time that it is placed in service;
(v) enter into or adopt a plan or agreement of complete or partial liquidation, employee dissolution, merger, consolidation, restructuring, recapitalization or consultant except pursuant to written agreements outstanding other reorganization of the Company;
(vi) enter into, assume, assign, cancel, terminate, renew, modify, release or amend any Material Contract or Contract that would be a Material Contract if in effect on the date hereof and previously disclosed in writing to Parenthereof, or assign, compromise, release or waive any rights thereunder;
(vii) incur, create, refinance, replace, prepay, guarantee, assume, increase the salaries balance of or wage rates repay or fringe benefits decrease the balance of any Indebtedness (other than required payments of principal or interest with regard to Indebtedness that exists at the date of this Agreement), other than in the ordinary course of business consistent with past practice in an aggregate principal amount not to exceed $50,000 or incur, create, refinance, replace, prepay, guarantee, assume, increase the balance of or repay or decrease the balance of any loan advance or indebtedness between or among the Company, Parent or any of their respective Affiliates, other than Indebtedness incurred in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $50,000;
(viii) make any loans, advances, capital contributions or commitments to or investments in any Person in excess of $50,000, except for advances of out-of-pocket expenses made in the ordinary course of business consistent with past practice;
(ix) make any capital expenditures other than (A) maintenance capital expenditures in the ordinary course of business or (B) as set forth in the capital expenditure forecast set forth in Section 5.1(b)(ix) of the Member Disclosure Schedule;
(x) except as required by changes in applicable Law or GAAP, or changes made by Parent that apply to itself and its consolidated subsidiaries, make any change in financial accounting methods, principles or practices;
(xi) enter into, amend or modify in any material or adverse respect or assign or terminate any Material Contract or any Contract that would be a Material Contract if existing on the date hereof, other than as required by Section 5.11;
(xii) acquire, including by way of merger, consolidation or purchase of any capital stock or assets, or make any investment in any interest in any corporation, partnership or other business organization or division thereof, except with respect to the equity or ownership interests of any Company Joint Venture or any other Person to the extent necessary in respect of a financing of a Project that will be developed or owned by the Company or a Company Joint Venture in which the Company will have an interest;
(xiii) except (A) to the extent required by applicable Law, or (B) to the extent required by any Employee Plan, policy or Contract as in effect on the date of this Agreement, (1) with respect to any Business Employee who is designated to be a Transferred Employee or a possible Transferred Employee, grant any (x) increase in the compensation, commissions or benefits, including severance pay, or (y) grant or promise to pay or accelerate the payment or vesting of, conditionally or otherwise any bonus, equity-based awards or benefits; (2) hire or terminate (other than for cause) the employment of any Business Employee (including rights to severance any officer) having a title that is at or indemnificationabove Vice President, annual total compensation opportunity in excess of $150,000 or that is named on Section 6.2(f) of the Acquiror Disclosure Schedules; (3) grant any equity award or other long-term incentive compensation; or (4) enter into any Contract which provides for, or amend any Contract to provide for, payment in connection with a change in control or similar event (either alone or together with any other event);
(xiv) enter into any Collective Bargaining Agreement with any Union or other representative of its directorsany Business Employees;
(xv) except to the extent required by applicable Law, officersmake, employees change, or consultants revoke any Tax election, change any Tax accounting method, policy or practice, file any amended Tax Return, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or non-U.S. applicable Law), surrender any right to claim a material Tax refund, settle or compromise any material Tax claim or liability, incur any liability for Taxes other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend waive or extend any contracts, agreementsstatute of limitations in respect of Taxes or period within which an assessment or reassessment of material Taxes may be issued, or obligations prepare or file any Tax Return, in a manner inconsistent with past practices, elections, and methods of the Company (or Parent or its relevant Affiliates, as applicable), in each case relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by Taxes imposed on the Company for convenience as a separate taxpayer and not imposed on not more than 60 days' notice;
(p) Materially revalue the Company because it is included on a consolidated or combined return, it being understood that nothing in this Agreement will affect the right of Parent or any of its assets Affiliates (other than the booking of reserves in the ordinary course of business and consistent Company) to take any action it deems desirable with past practices) or, except as required by a change in law regard to Taxes it pays or in GAAP Tax returns it files or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practicesanything that may affect them;
(qxvi) Make compromise, settle or agree to settle any loansProceeding relating to the Business, advances other than settlements without (A) the admission of wrongdoing or capital contributions toa nolo contendere or similar plea, (B) the imposition of injunctive or investments inother equitable relief, (C) restrictions on the future activity or conduct, by, of or on behalf of the Company, and (D) any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary obligation on the part of the Company or Acquiror and its Affiliates, other than solely monetary obligations of the Company in an amount not greater than $100,000 individually or $250,000 in the aggregate; provided that Parent agrees in writing to indemnify Acquiror and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses for all Losses related to business travel) to employees in the ordinary course and consistent with past practicesuch monetary obligations;
(rxvii) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee cause or permit the Company to enter into any such policy to lapse new line of business or discontinue any existing line of business (it being understood that the Company may renew any insurance policy in effect as extensions of the date existing lines of this Agreementbusiness, including into new markets and channels shall not constitute new lines of business);
(xxviii) Increase amend, terminate or allow to lapse (to the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to returnextent lapse can be prevented) above the aggregate value of such inventory at June 30, 1998any Business Permit;
(yxix) Begin shipment enter into any agreement or understanding, or take any other action, that could reasonably be expected to have the effect of any new products to customers, except for alpha versions and not more than 50 beta versions preventing or delaying completion of any product delivered to customers solely for evaluation purposesthe Merger or of the Member’s or Parent’s obligations under this Agreement or the Ancillary Agreements; or
(zxx) Agree in writing agree or otherwise commit to take do any of the actions described foregoing.
(c) In addition to the foregoing, the Company shall give Acquiror three (3) Business Days advanced written notice prior to (i) the entry into any Builder Agreement or Installer Agreement or (ii) the purchase of Inventory or other assets in excess of $1,000,000 in an individual purchase order or agreement or $2,000,000 in the aggregate, in each case, together with a copy of the proposed purchase order or agreement, as applicable.
(d) Nothing contained in Section 5.1(a) through (y) aboveis intended to give Acquiror the right to control or direct the operations of the Company prior to the Closing. Prior to the Closing, the Company shall exercise complete control and supervision over its operations.
Appears in 1 contract
Samples: Merger Agreement (Sunnova Energy International Inc.)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its termsterms and the Closing (the “Interim Period”), the Effective Time, or such time as Parent's designees shall constitute a majority each of the Company Board, and the Company and each of its subsidiaries Company’s Subsidiaries shall, except to the extent that Parent BRPA shall otherwise consent in writingwriting (which consent shall not be unreasonably withheld, conditioned or delayed) or as set forth in Schedule 4.1 of the Company Schedules or as contemplated by this Agreement, carry on its business, in all material respects, business in the usual, regular and ordinary coursecourse consistent with past practices, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, Legal Requirements (except as expressly contemplated by Schedule 4.1 of the Company Schedules) and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present key officers and employees, and (iii) preserve its relationships with key customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings; provided, that, in the case of each of the preceding clauses (i)-(iii), during any period of full or partial suspension of operations related to COVID-19 or SARS-CoV-2 virus (or any mutation or variation thereof), the Company may, in connection with the COVID-19 pandemic (or any mutation or variation thereof), take such actions as are reasonably necessary (A) to protect the health and safety of the Company’s or its Subsidiaries’ employees and other individuals having business dealings with the Company or its Subsidiaries or (B) to reasonably respond to third-party supply or service disruptions caused by the COVID-19 pandemic, COVID-19 or SARS-CoV-2 virus (or any mutation or variation thereof), shall provide prompt notice to BRPA of the taking of any action permitted by this proviso. In addition, except as required or permitted or contemplated by the terms of this Agreement, and except Agreement or as provided set forth in Schedule 4.1 of the Company ScheduleSchedules, without the prior written consent of ParentBRPA, which consent shall not be unreasonably withheld, conditioned or delayed, during such periodthe Interim Period, the Company and the Company’s Subsidiaries shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans Plan or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company SchedulePlan;
(b) Grant any material severance or termination pay to (i) any officer or employee (ii) any employee, except pursuant to applicable Legal Requirements, written agreements outstanding, or Plans or policies existing, existing on the date hereof and as previously or concurrently disclosed or made available to the other Party, or in the case of the Company Scheduleand its Subsidiaries except in connection with the promotion, hiring or adopt firing of any new severance planemployee in the ordinary course of business consistent with past practice;
(c) Transfer Abandon, dispose of, allow to lapse, transfer, sell, assign, or exclusively license to any person or entity Person or otherwise extend, amend or modify in any material respect any rights to the Company existing or future Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)Property Rights;
(d) Fail to pay its accounts payable or collect its accounts receivable in accordance with past practices;
(e) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or other equity securities (other than any such dividend or distribution by a Subsidiary of the Company to the Company or another such Subsidiary), or split, combine or reclassify any capital stock or other equity securities or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(ef) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director other equity securities or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)ownership interests;
(fg) Issue, deliver, sell, authorize, pledge or otherwise encumber encumber, or agree to any of the foregoing with respect to, any shares of the capital stock of the Company or any of its subsidiaries, other equity securities or ownership interests or any securities convertible into or exchangeable for shares of such capital stockstock or other equity securities or ownership interests, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or other equity securities or ownership interests or any securities convertible into or exchangeable for shares of capital stockstock or other equity securities or other ownership interests, or enter into other agreements or commitments of any character obligating it to issue any such shares shares, equity securities or other ownership interests or convertible securitiesor exchangeable securities at an implied equity valuation of the Company of less than $500,000,000; provided that this clause (g) shall not prohibit the issuances of shares in respect of any exercise of Company Stock Options, other than (i) which shares, for the issuanceavoidance of doubt, delivery and/or sale will be converted into the Per Share Merger Consideration pursuant to Section 1.3(b); provided, further, that the Company may grant equity compensation awards in respect of shares of Company Common Stock in connection with the hiring of new employees or promotions of employees or pursuant to the exercise of Options therefor outstanding Plans existing as of the date hereof, which equity awards shall be treated for all purposes of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries)Agreement as Company Stock Options;
(h) Amend its Charter Documents in any material respect;
(i) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association association, or other business organization or division thereof orthereof, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire outside the ordinary course of business any assets which are material, individually or in the aggregate, to the business of the Company such Party or enter into any joint ventureventures, strategic partnership partnerships or alliancealliances, or other arrangements that provide for exclusivity of territory or otherwise restrict such Party’s ability to compete or to offer or sell any products or services to other Persons. For purposes of this paragraph, “material” includes the requirement that, as a result of such transaction, financial statements of the acquired, merged, or consolidated entity be included in the Registration Statement;
(ij) Sell, lease, license, encumber or otherwise dispose of any properties or assets, except the sale, lease or disposition of property or assets which in the ordinary course of business consistent with past practices that are not material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire Except as contemplated by Section 5.15 hereunder, or as otherwise required by applicable Legal Requirements or pursuant to an existing Plan, policy or Company Contract, (i) adopt or materially amend any employeePlan (including any Plan that provides for severance) or collective bargaining agreement (in each case, except replacements for former non-officer employees, hired other than in the ordinary course of business consistent with past practice;
), (lii) Adopt pay any special bonus or amend special remuneration to any employee stock purchase director or employee stock option planemployee, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into except in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentpractices, or (iii) materially increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made consultants, except in the ordinary course of business, business consistent with past practice, or change in any material respect any management policies or procedurespractices;
(ml) Make (i) Pay, discharge, settle or satisfy any payments outside material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction of any claims, liabilities or obligations in the ordinary course of business consistent with past practices or in accordance with their terms, or recognized or disclosed in the most recent Company Financial Statements, as applicable, or incurred since the date of such financial statements, (ii) settle any material litigation where the consideration given by the Party is other than monetary or to which an aggregate excess officer, director or employee of $250,000such Person is a party in his or her capacity as such, or (iii) waive the benefits of, agree to modify in any material manner, terminate, release any Person from or knowingly fail to enforce any material confidentiality or similar agreement to which the Company or any of its Subsidiaries is a party or of which the Company any of its Subsidiaries is a beneficiary (other than with customers and other counterparties in the ordinary course of business consistent with past practices);
(nm) Except in the ordinary course of businessbusiness consistent with past practices, modify, amend modify in any material respect or terminate (other than in accordance with its terms) any material contract or agreement to which the Material Company or any subsidiary thereof is a party Contract or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(on) Enter intoExcept as required by law or U.S. GAAP, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law any manner or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(qo) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses Except (including expenses related to business traveli) to employees in the ordinary course and of business consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budgetpractices, or that are individually (ii) in excess connection with the promotion, hiring or firing of $100,000 any employee, incur or in the aggregate enter into any agreement, contract or commitment requiring such Party to pay in excess of $500,000 in any calendar quarter12-month period;
(sp) Materially accelerate Make, revoke, amend, or delay collection rescind any material Tax elections that, individually or in the aggregate, would be reasonably likely to adversely affect the Tax liability or Tax attributes of such Party, settle or compromise any notes material income Tax liability outside the ordinary course of business or, except as required by applicable Legal Requirements, change any material method of accounting for Tax purposes or accounts receivable prepare or file any material Return in advance of a manner inconsistent with past practice;
(q) Form or beyond their regular due dates or the dates when the same would have been collected establish any Subsidiary except in the ordinary course of businessbusiness consistent with prior practice or as contemplated by this Agreement;
(tr) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount Make capital expenditures in excess of $500,000;
(vs) Make any tax election not required by law or settle or compromise Enter into any material tax liabilitytransaction with or distribute or advance any assets or property to any of its officers, directors, partners, stockholders, managers, members or other Affiliates other than (i) the payment of salary and benefits and the advancement of expenses in the ordinary course of business consistent with prior practice or (ii) such distributions or advancements by a Subsidiary of the Company to the Company or another such Subsidiary;
(wt) Cancel Close any facility or terminate discontinue any material insurance policy naming it as a beneficiary line of business or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesmaterial business operations; or
(zu) Agree in writing or otherwise agree or commit to take any of the actions described in Section 5.1(a4.1(a) through (yt) above.
Appears in 1 contract
Conduct of Business by the Company. Except as contemplated by During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing, other than with respect to the Reorganization, the Company shall and shall cause its Subsidiaries to, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), carry on their businesses in the usual, regular and Ordinary Course, in substantially the same manner as heretofore conducted, and use their commercially reasonable efforts to (i) preserve substantially intact their present business organization, (ii) keep available the services of their present officers and key employees, consultants and managers (provided that they shall not be obligated to increase the compensation of, or make any other payments or grant any concessions to, such Persons), (iii) keep in full force and effect all of their material insurance policies and (iv) preserve their relationships with significant customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings (provided, that they shall not be obligated to make any payments or grant any concessions to such Persons other than payments in the Ordinary Course). Furthermore, except as required or permitted by the terms of this Agreement, or as set forth in Section 5.1 Schedule 5.1, without the prior written consent of the Company ScheduleParent (which consent shall not be unreasonably withheld, conditioned or delayed), during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, terms or the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such periodClosing, the Company shall not do any of the following not, and shall cause its Subsidiaries not permit its subsidiaries to to, do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock Equity Interests or split, combine or reclassify any capital stock Equity Interests or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided Equity Interests, in each case that would (i) cause a default or event of default under any Contract evidencing outstanding Indebtedness of the Company's wholly-owned subsidiaries may declareCompany or its Subsidiaries, set aside or pay dividends or (ii) not permit Seller to make other distributions with respect a Minimum Required Contribution pursuant to their capital stock in the ordinary course of business and consistent with past practices.Section 7.2(e);
(eb) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)Equity Interests;
(fc) Issue, deliver, sell, authorize, pledge or otherwise encumber encumber, or agree to any shares of the capital stock of the Company or foregoing with respect to, any of its subsidiaries, Equity Interests or any securities convertible into shares of such capital stockor exchangeable for Equity Interests, or subscriptions, rights, warrants or options to acquire any shares of such capital stock Equity Interests or any securities convertible into shares of capital stockor exchangeable for Equity Interests, or enter into other agreements or commitments of any character obligating it to issue any such shares securities or interests or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k))or exchangeable securities or interests;
(gd) CauseExcept to the extent required to comply with its obligations hereunder or applicable Legal Requirements, permit or propose any amendments to amend its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries)Fundamental Documents;
(he) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof orthereof, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are materialvessels or any material assets, individually or in the aggregate, to the business of the Company or enter into any joint ventureventures, strategic partnership partnerships or alliancealliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s ability to compete or to offer or sell any products or services;
(if) Sell, lease, license, charter, encumber or otherwise dispose of any vessels or other properties or assets which are materialassets, individually or except for (i) the time-chartering of vessels to customers at market rates in the aggregate, to Ordinary Course so long as the business duration of any such charter does not exceed six (6) 63 months and notice thereof (together with a complete copy of the Companyrelevant charter) is promptly provided to Parent, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)ii) Company Permitted Liens;
(jg) Incur, assume (A) Incur any Indebtedness or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation Indebtedness of another personPerson, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "“keep well" ” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing foregoing, (B) make any loans, advances or capital contributions to, or investments in, any other Person (other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to any Material Company Contract existing credit facilities in as of the ordinary course of businessdate hereof), or (iiiC) as contemplated by this Agreementrepay or satisfy any Indebtedness other than repayment of Indebtedness in accordance with the terms thereof;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(lh) Adopt or amend any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will")agreement, pay any special bonus or special remuneration to any director, officer, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentconsultant, or or, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except to the extent required to comply with any of applicable Legal Requirement; provided, that the Company shall be permitted to increase salaries or wage rates or fringe benefits (including rights to severance or indemnification) and pay regular bonuses to its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or proceduresOrdinary Course;
(mi) Make Grant any payments outside of severance, retention or termination pay to any officer, employee or consultant except pursuant to applicable Legal Requirements, or adopt any new severance plan, agreement or arrangement, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the ordinary course of business in an aggregate excess of $250,000date hereof;
(nj) Except in the ordinary course of businessOrdinary Course, modifypay, discharge, settle or satisfy any claims, Liabilities or obligations other than (i) such payment, discharge, settlement or satisfaction that does not exceed US$100,000 for any individual claim, Liability or obligation and US$500,000 in the aggregate, or (ii) Liabilities recognized or disclosed in the Financial Statements;
(k) Modify, amend or terminate any material contract or agreement to which the Material Company or any subsidiary thereof is a party Contract, or waive, delay the exercise of, release or assign any material rights or claims thereunder, in each case outside the Ordinary Course;
(ol) Enter intoExcept as required by IFRS, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(m) Enter into any material Contract outside the Ordinary Course;
(n) Depart from any normal drydock and maintenance practices or discontinue replacement of spares in operating any vessel;
(o) Defer any scheduled maintenance on any vessel;
(p) Settle any Proceeding;
(q) Make or rescind any loansmaterial Tax elections, advances settle or capital contributions tocompromise any material income tax liability, agree to any extension or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary waiver of the Company and statute of limitations with respect to the Company assessment or another wholly-owned subsidiary determination of the Company and advances Taxes, surrender any right to claim a refund, or, 66 except as required by applicable Legal Requirement, materially change any method of business related expenses (including expenses related to business travel) to employees accounting for Tax purposes or prepare or file any Tax Return in the ordinary course and consistent a manner inconsistent with past practice;
(r) Authorize or make Make more than US$250,000 of capital expenditures beyond those provided expenditures, in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarteraggregate;
(s) Materially accelerate Enter into any transaction with or delay collection distribute or advance any assets or property to any of any notes its officers, directors, managers, consultants, stockholders, equityholders or accounts receivable in advance Affiliates other than the payment of or beyond their regular due dates or the dates when the same would have been collected salary and benefits in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesOrdinary Course; or
(zt) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 5.1(a) through (y) aboves).
Appears in 1 contract
Samples: Merger Agreement (Pangaea Logistics Solutions Ltd.)
Conduct of Business by the Company. Except (a) During the Option Agreement Term, Company shall (i) conduct its Business in the ordinary course and in accordance with applicable Laws, (ii) comply with the terms of the Organizational Documents (including with respect to any amendment, restatement or waiver thereof) and (iii) use Commercially Reasonable Efforts to complete the HF-BCC Phase II Trial and the Phase III Trial.
(b) Without limiting the generality of Section 5.5(a) and except as expressly contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parentthe Optionee, during such periodthe Option Agreement Term, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the followingnot:
(ai) Waive initiate or make any stock repurchase rightschanges to the activities of the Company and its Business in the form of (A) entering new business and/or product areas, accelerate, amend and (B) exiting one or more business and/or product areas in which the Company has business as of the Agreement Date;
(ii) make any amendment to the Organizational Documents so as to alter or change the period powers, preferences or rights of exercisability shares of options Capital Stock held by the Optionee so as to affect such shares adversely relative to the powers, preferences or restricted stock, rights of shares of Capital Stock of the same class or reprice options granted under any employee, consultant, director or series held by holders of Capital Stock other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on than the date hereof and disclosed in the Company ScheduleOptionee;
(biii) Grant any severance or termination pay fail to any officer or employee except pursuant to written agreements outstandingmaintain, or policies existing, on the date hereof and disclosed in the Company Scheduleallow to lapse, or adopt abandon, including by failure to pay the required fees in any new severance plan;
(c) Transfer or license to jurisdiction, any person or entity Intellectual Property Rights used in or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rightsBusiness, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed practices regarding Intellectual Property Rights that Parent shall are not unreasonably withhold consent to any non-exclusive license agreement related material to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days conduct of any request for consent shall constitute such consent)the Business;
(div) Declaresell, set aside lease, license or pay otherwise transfer, or create, incur, assume or suffer to exist any dividends on or make any Lien (other distributions than Permitted Liens (whether as defined in cashthe Merger Agreement)) on, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declarematerial assets, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) PurchaseIntellectual Property, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuanceproperties, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit interests or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business businesses of the Company, except other than sales of inventory and used equipment, or the license licenses of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired Company Product in the ordinary course of business consistent with past practice;
(lv) Adopt (A) issue, transfer, deliver, sell, pledge or amend otherwise encumber any employee stock purchase or employee stock option planof the Company’s assets, shares of any Capital Stock, Equity Incentive Options, or adopt or amend any material employee benefit planother Company Securities, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into an issuance of (x) Equity Incentive Options granted to employees or other service providers of the Company in the ordinary course of business consistent with past practice practice, (y) any shares of Common Stock upon the exercise of Equity Incentive Options, (z) any shares of Capital Stock issued in accordance with employees who are terminable "at will")Section 5.12, pay or (B) amend any special bonus term of any Company Security (whether by merger, consolidation or special remuneration to any director, employee or consultant except pursuant to written agreements otherwise) outstanding on as of the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or proceduresthis Agreement;
(mvi) Make give notice of or propose any payments outside resolution to wind up or dissolve the Company, file or make any petition, application or notice for the appointment or intended appointment of an administrator or liquidator or provisional liquidator or invite any person to appoint a receiver, administrative receiver or administrator in respect of the ordinary course whole or any part of the business in an aggregate excess or assets of $250,000the Company;
(nvii) Except in present a petition or convene a meeting for the ordinary course of businessCompany’s bankruptcy, modifywinding-up, amend recovery or terminate similar proceedings (including a general agreement with any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereundercreditors);
(oviii) Enter into, amend propose or extend make any contracts, agreementsarrangement or compromise with, or obligations relating assign for the benefit of, its creditors generally, or enter into any agreement for or in connection with the scheduling, restructuring or re-adjustment of any material part of its Indebtedness by reason of, or with a view to the distributionavoiding, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' noticefinancial difficulties;
(pix) Materially revalue declare, set aside or pay any dividend or other distribution (whether in cash, stock, debt or property or any combination thereof) in respect of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) orany Company Securities, except as required by a change in law or in GAAP redeem, repurchase or the rules of the SECotherwise acquire or offer to redeem, make repurchase, or otherwise acquire any change in accounting methods, principles or practices, including inventory accounting practicesCompany Securities;
(qx) Make take any action intended to obstruct or restrict the Optionee’s exercise of the Option or the Merger;
(xi) make any loans, advances or capital contributions to, or investments in, any other person or entityPerson, except other than to the extent provided for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practiceBudget;
(rxii) Authorize or make capital expenditures beyond those provided enter into any transactions with any Related Person (as defined in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Merger Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(zxiii) Agree in writing or otherwise enter into any agreement to take do any of the actions things described in Section 5.1(athe preceding clauses (i) through (yxvi). Notwithstanding anything to the contrary in this Section 5.5, the Company shall be permitted to adopt a carveout bonus plan for the benefit of its employees, provided that any payments under such plan shall be deducted from the Merger Consideration (as defined in the Merger Agreement) aboveas Company Transaction Expenses (as defined in the Merger Agreement).
Appears in 1 contract
Conduct of Business by the Company. Except During the period from the date of this Agreement to the Effective Time, except with the prior written consent of Parent (the decision with respect to which shall not be unreasonably delayed) as specifically contemplated by this Agreement or as set forth in Section 5.1 3.01(a) of the Company ScheduleLetter, the Company shall, and shall cause each of its Subsidiaries to, carry on their respective businesses in the ordinary course consistent with past practice and use commercially reasonable efforts to comply with all applicable Laws and, to the extent consistent therewith, use commercially reasonable efforts to keep available the services of their present officers, software developers and other key employees and to preserve their assets and technology and preserve their relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with them and maintain their material franchises, rights and Permits. Without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during Parent (the decision with respect to which shall not be unreasonably delayed) or as specifically contemplated by this Agreement or as set forth in Section 3.01(a) of the Company Letter (with specific reference to the subsection of this Section 3.01 to which the information stated in such perioddisclosure relates), the Company shall not do any of the following not, and shall not permit its subsidiaries to do any of the followingits Subsidiaries to:
(ai) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(bA) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declaredeclare, set aside or pay any dividends on (other than in the ordinary course and consistent with past practice), or make any other distributions (whether in cash, stock, equity securities shares or property) in respect of, any shares in its capital or other equity or voting interests, except for dividends by a direct or indirect wholly owned Subsidiary of any capital stock or the Company to its parent, (B) split, combine or reclassify any capital shares in its stock or other equity or voting interests, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any shares in its capital stock; provided that any of the Company's wholly-owned subsidiaries may declareor other equity or voting interests, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(eC) Purchasepurchase, redeem or otherwise acquire, directly or indirectly, acquire any shares of in its capital stock or any other securities of the Company or any of its subsidiariesSubsidiaries or any options, warrants, calls or rights to acquire any such shares or other securities (including any Stock Options or RSUs, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option the forfeiture or purchase agreements repurchase conditions of such RSUs as in effect on the date hereof of this Agreement) or (which repurchases D) take any action that would result in any amendment, modification or change of any term of any indebtedness of the Company shall be obligated to effectuate if or any of its Subsidiaries or (E) take any action described in Section 2.01(g)(i)(D)-(F) or (I) (assuming for purposes of this Section 3.01(a)(i)(E) only that such representations and warranties contained in such Section 2.01(g) apply during the repurchase price is less than period following the Offer Pricedate of this Agreement);
(fii) Issueissue, deliver, sell, authorize, pledge or otherwise encumber any shares in its capital, any other equity or voting interests or any securities convertible into, or exchangeable for, or any options, warrants, calls or rights to acquire, any such shares, interests or securities or any stock appreciation rights, phantom stock awards or other rights that are linked to the value of Company Common Shares or the capital stock value of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, part thereof (other than (i) the issuance, delivery and/or sale of shares issuance of Company Common Stock pursuant to Shares upon the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k)Stock Options);
(giii) Cause, permit amend or propose any amendments to amend its Certificate of Incorporation, Bylaws articles or other charter documents bylaws (or similar governing instruments of any of its subsidiariesorganizational documents);
(hiv) Acquire acquire or agree to acquire (A) by merging merging, amalgamating or consolidating with, or by purchasing any equity interest in all or a material substantial portion of the assets of, or by purchasing all or a substantial equity or voting interest in, or by any other manner, any business or any corporation, partnership, association or other business organization person or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire B) any other assets which are material, individually or other than assets acquired in the aggregate, to the ordinary course of business of the Company or enter into any joint venture, strategic partnership or allianceconsistent with past practice;
(iv) Sellsell, lease, license, encumber sell and lease back, mortgage or otherwise subject to any Lien or otherwise dispose of any of its material properties or assets which are material(including any shares, individually equity or in the aggregatevoting interests or other rights, to the business of the Companyinstruments or securities), except the licensing of its Intellectual Property and Software and sales of inventory and products or used equipment, or the license of the Company's products equipment in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to and except for Permitted Liens incurred in the Company's enterprise ordinary course of business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)consistent with past practice;
(jvi) Incur(A) repurchase, assume prepay or pre-pay incur any indebtedness for borrowed moneyindebtedness, including by way of a guarantee any indebtedness or obligation an issuance or sale of another persondebt securities, or issue or and sell any debt securities or options, warrants, calls or other rights to acquire any debt securitiessecurities of the Company or any of its Subsidiaries, enter into any "“keep well" ” or other agreement Contract to maintain any financial statement or similar condition of another person or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iiiB) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person person, other than the Company or entity, except for loans, advances, capital contributions any direct or investments between any wholly-indirect wholly owned subsidiary Subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company other than customary travel and other advances of business related expenses (including expenses related to business travel) to employees employees, officers and directors in the ordinary course and of business consistent with past practice;
(rvii) Authorize incur or make commit to incur any capital expenditures beyond those provided in the Company's existing capital expenditure budgetexpenditures, or any obligations or liabilities in connection therewith, that individually are individually in excess of $100,000 2,000,000 or in the aggregate are in excess of $500,000 in any calendar quarter10,000,000;
(sviii) Materially accelerate (A) pay, discharge, settle or delay collection satisfy any material claims (including any claims of Shareholders and any Shareholder litigation relating to this Agreement or any transaction contemplated by this Agreement or otherwise), liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice, or as required by their terms as in effect on the date of this Agreement, of claims, liabilities or obligations reserved against in the Company’s most recent financial statements contained in the Baseline Financials (for amounts not in excess of such reserves) or incurred since the date of such financial statements in the ordinary course of business consistent with past practice, in each case, the payment, discharge, settlement or satisfaction of which does not include any obligation (other than the payment of money) to be performed by the Company or its Subsidiaries following the Effective Date, (B) waive, relinquish, release, grant, transfer or assign any right of material value or (C) waive any material benefits of, or agree to modify in any adverse respect, or fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar Contract to which the Company or any of its Subsidiaries is a party;
(ix) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), or modify, amend or exercise any right to renew any lease or sublease of real property (other than in the ordinary course of business consistent with past practice) or acquire any interest in real property; provided that in no event shall the Company or any of its Subsidiaries enter into any extension or renewal of any notes lease or accounts receivable sublease of real property or otherwise materially increase any of their obligations thereunder unless the Company shall have provided Parent with ten Business Days prior notice;
(x) modify or amend in advance any material respect in a manner that is adverse to the Company, or accelerate, terminate or cancel, any material Contract;
(xi) except as required to ensure that any Benefit Plan or Benefit Agreement in effect on the date of this Agreement is in compliance with applicable Law, including Section 409A of the Code, or beyond their regular due dates as specifically required pursuant to this Agreement and except as required to comply with the terms of any Benefit Plan or Benefit Agreement in effect on the date hereof or applicable Law, (A) adopt, enter into, terminate, amend or modify in any material respect that increases the Company’s obligation thereunder any Benefit Plan or Benefit Agreement, (B) increase in any manner the compensation or benefits of, or pay any bonus to, or grant any loan to, any Company Personnel except for any such increases, payments or grants to Company Personnel who are not directors or officers in the ordinary course of business consistent with past practice, (C) pay or provide to any Company Personnel any compensation or benefits not provided for under a Benefit Plan or Benefit Agreement as in effect on the date of this Agreement other than the payment of base compensation or benefits in the ordinary course of business consistent with past practice, (D) grant any awards under any Benefit Plan (including the grant of options, share appreciation rights, performance units, restricted shares, share purchase rights or other equity-based or equity-related awards) or remove or modify existing restrictions in any Benefit Plan or Benefit Agreement or awards made thereunder, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or Benefit Agreement, (F) take any action to accelerate the time of payment or vesting of any compensation or benefits under any Benefit Plan or Benefit Agreement or (G) make any determination under any Benefit Plan or Benefit Agreement that is inconsistent with the ordinary course of business or past practice;
(xii) enter into any Contract containing any restriction on the ability of the Company or any of its Subsidiaries to assign all or any portion of its rights, interests or obligations thereunder, unless such restriction expressly excludes any assignment to Parent and any of its Subsidiaries in connection with or following the consummation of the Arrangement or the dates when other transactions contemplated by this Agreement;
(xiii) take any action or fail to take any action if such action or failure to act is reasonably likely to result in (A) any representation and warranty of the same would have been collected Company set forth in this Agreement that is qualified as to materiality becoming untrue (as so qualified) or (B) any such representation and warranty that is not so qualified becoming untrue in any material respect;
(xiv) except as required by applicable Law, adopt or enter into any collective bargaining agreement or other labour union Contract applicable to the employees of the Company or any of its Subsidiaries or terminate (other than for cause, as a result of death or disability or in the ordinary course of business) the employment of any Company Personnel who has an employment, severance or similar Contract with the Company or any of its Subsidiaries;
(txv) Materially delay or accelerate payment of write-down any account payable beyond or in advance of its due date material assets, including any Intellectual Property, or the date such liability would have been paid make any material change in any financial or tax accounting principle, method or practice, other than those required by GAAP or applicable Law;
(xvi) except in the ordinary course of businessbusiness consistent with past practice, engage in (A) any promotional sales or discount activity with any customers or distributors with the effect of accelerating to prior fiscal quarters (including the current fiscal quarter) sales to the trade or otherwise that would otherwise be expected to occur in subsequent fiscal quarters, (B) any practice which would have the effect of accelerating to prior fiscal quarters (including the current fiscal quarter) collections of receivables that would otherwise be expected to be made in subsequent fiscal quarters, (C) any practice which would have the effect of postponing to subsequent fiscal quarters payments by the Company or any of its Subsidiaries that would otherwise be expected to be made in prior fiscal quarters (including the current fiscal quarter) or (D) any other promotional sales or discount activity;
(uxvii) Settle take any action or compromise fail to take any suits action which action or claims failure to act would result in the material loss or threatened suits or claims for payments reduction in an aggregate amount in excess value of $500,000the Intellectual Property of the Company and its Subsidiaries, taken as a whole;
(vxviii) Make enter into, extend or renew (A) any tax election not required by law Contract or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy amendment thereof which, if executed prior to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement, would have been required to have been disclosed pursuant to Section 2.01(i)(i)(A);
, (xB), (H), (J)(2) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel or (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) above.L),
Appears in 1 contract
Samples: Arrangement Agreement (Cognos Inc)
Conduct of Business by the Company. Except as expressly contemplated by this Agreement or as set forth described in Section 5.1 of the Company Disclosure Schedule, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant hereof to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Boardshall conduct its and its Subsidiaries’ business in the ordinary course consistent with past practice and, the Company and each of its subsidiaries shall, except to the extent that Parent consistent therewith, shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present and its Subsidiaries’ current business organizationorganizations, (ii) keep available the services service of its present and its Subsidiaries’ current officers and key employees, and (iii) preserve its and its Subsidiaries’ relationships with customers, suppliers, distributors, licensors, licensees, suppliers and others having significant business dealings with which it has business dealingsand its Subsidiaries. In additionWithout limiting the generality of the foregoing, except as permitted expressly contemplated by this Agreement or as described in Section 5.1 of the terms of this AgreementCompany Disclosure Schedule, during the period from the date hereof to the Effective Time, the Company shall not, and except as provided in the Company Scheduleshall not permit its Subsidiaries to, without the prior written consent of Parent, during such period, the Company which consent shall not do any of the following and shall not permit its subsidiaries to do any of the followingbe unreasonably withheld or delayed:
(a) Waive propose to adopt any stock repurchase rights, accelerate, amendments to or amend its articles of incorporation or change the period of exercisability of options bylaws or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedulecomparable organizational documents;
(b) Grant authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any severance Company Securities or termination pay to any officer or employee Subsidiary Securities (including, for the avoidance of doubt, restricted stock), except (i) pursuant to written agreements outstanding, or policies existing, on Stock Options outstanding prior to the date hereof and disclosed in accordance with the Company Schedule, existing terms of such Stock Options or adopt any new severance plan;
(c) Transfer or license pursuant to any person award or entity or otherwise extend, amend or modify in any material respect any rights grant already made under an Employee Plan prior to the Company Intellectual Propertydate hereof, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(dii) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor Warrants outstanding as of prior to the date of this Agreementhereof, and (iiiii) the issuance of shares of restricted stock with a fair market value at the time of grant of employee stock options, consistent with not to exceed $475,000 in the aggregate to the Company's established past practice for similarly situated employees, to non-officer ’s employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice in connection with annual year-end performance reviews and equity awards and (it being agreed that Parent shall not unreasonably withhold consent iv) the issuance of up to any non-exclusive license agreement related 17,500 shares of restricted stock to the Company's enterprise business and that Parent's failure ’s independent directors in accordance with the Company’s customary year-end awards;
(c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities;
(d) other than cash dividends made by any wholly-owned Subsidiary of the Company to reasonably object to the Company or one of its wholly-owned Subsidiaries, split, combine or reclassify any such agreement within five business days shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any request for consent shall constitute such consentshares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(jf) Incurexcept in connection with capital expenditures that do not trigger the thresholds set forth in Sections 5.1(p)(iii), (iv) and (v), (i) incur or assume any long-term or preshort-pay any indebtedness for borrowed money, guarantee any indebtedness term debt or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any except for (A) debt securities, enter into any "keep well" or other incurred under the Company’s existing credit agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any fund operations of the foregoing other than (i) business in connection with the financing of ordinary course trade payables of business consistent with past practicepractice and (B) loans or advances to wholly-owned Subsidiaries, (ii) pursuant assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to existing credit facilities obligations of wholly-owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person except for travel advances in the ordinary course of business consistent with past practice to employees of the Company or any of its Subsidiaries or (iv) mortgage or pledge any of its or its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Encumbrances);
(g) other than in the ordinary course of business, enter into, amend, modify, terminate (partially or completely), grant any waiver under, or give any consent with respect to, any Material Contract or license material to the Company other than in the ordinary course of business or as required by Law;
(h) undertake any action set forth in Section 3.10(l), except, in the case of employees other than the officers of the Company, (i) in response to offers of employment from third parties, (ii) in connection with the assumption by an employee of new duties or responsibilities, (iii) as contemplated by this Agreementincreases in compensation to employees of the Company in connection with annual year-end performance reviews in amounts consistent with the ordinary course consistent with past practices or (iv) to the minimum extent necessary to comply with Section 409A of the Code without increasing the benefits provided to any Person; provided, however, that in the case of the general managers of each of the Company’s properties, the Company shall consult with Parent prior to taking any such actions;
(i) forgive any loans to employees, officers or directors or any of their respective Affiliates or Associates;
(j) make any deposits or contributions of cash or other property to or take any other action to fund or in any other way secure the payment of compensation or benefits under the Employee Plans or agreements subject to the Employee Plans or any other plan, agreement, contract or arrangement of the Company other than (i) matching contributions (including, without limitation, discretionary matching contributions) in accordance with the terms of any Employee Plan that is intended to qualify under Section 401(a) of the Code and (ii) deposits and contributions that are required pursuant to the terms of the Employee Plans or any agreements subject to the Employee Plans;
(k) Hire enter into any employeeCollective Bargaining Agreement;
(l) acquire, sell, lease, license or dispose of any property or assets in any single transaction or series of related transactions, except replacements for former non-officer employees(i) obsolete equipment, hired (ii) inventory in the ordinary course of business or (iii) pursuant to existing contracts or commitments and slot participation agreements entered into after the date hereof in the ordinary course of business consistent with past practice;
(lm) Adopt except as may be required as a result of a change in Law or amend in GAAP, make any employee stock purchase change in any of the accounting principles or employee stock option plan, practices used by it;
(i) make or adopt or amend change any material employee benefit planTax election (unless required by applicable Law), (ii) settle or compromise any material federal, state, local or foreign income Tax liability, other than with respect to any proceeding relating to a Tax liability that (A) is in progress as of the date hereof or (B) is in an amount less than or equal to the liability or reserve that has been recorded with respect thereto on the Balance Sheet or (iii) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes;
(i) enter into any employment lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) or (ii) modify, amend or exercise any right to renew any lease or sublease of real property;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, (ii) enter into any contract or collective bargaining agreement (other than offer letters in the ordinary course of business which would be reasonably likely to result in a Company Material Adverse Effect, (iii) authorize, incur or commit to incur any new capital expenditure(s) at or adjacent to the Company’s Rail City Casino property in Sparks, Nevada, which individually deviates by more than $200,000 or in the aggregate deviates by more than $1,000,000 when compared to the amounts set forth in the budget for such expenditure in the budget set forth on Schedule 5.1(p)(iii) of the Company Disclosure Schedule; (iv) authorize, incur or commit to incur any other new capital expenditure(s) which individually deviates by more than $200,000 or in the aggregate deviates by more than $1,000,000 when compared to the amounts set forth in the budget for such expenditure in the budget set forth on Schedule 5.1(p)(iv) of the Company Disclosure Schedule or (v) authorize, incur or commit to incur any other new capital expenditure(s) for fiscal year 2007 which individually deviates by more than $200,000 or in the aggregate deviates by more than $1,000,000 when compared to the Company’s budget for capital expenditures adopted for fiscal 2007, which new budget shall not exceed five percent of the Company’s net revenue and letter agreements entered into shall be provided to Parent following adoption; provided, that none of the foregoing shall limit any capital expenditure required pursuant to existing contracts or commitments;
(q) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, liability or obligation (absolute or accrued, asserted or unasserted, contingent or otherwise), other than the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings, claims, liabilities or obligations (i) reflected or reserved against in full in the financial statements of the Company and its Subsidiaries at December 31, 2005 or incurred since December 31, 2005 in the ordinary course of business consistent with past practice with employees who are terminable "at will")or (ii) the settlement, pay compromise, discharge or satisfaction of which does not include any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits obligation (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made the payment of money) to be performed by the Company or its Subsidiaries following the Effective Time and is in an amount of less than $200,000 individually or $1,000,000 in the ordinary course of businessaggregate;
(r) except as required by applicable Law or GAAP, consistent with past practice, or change revalue in any material respect any management policies of its properties or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend assets including without limitation writing-off notes or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, accounts receivable other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate except as required by applicable Law, convene any regular or delay collection special meeting (or any adjournment thereof) of any notes the stockholders of the Company other than the Company Stockholders Meeting; or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as enter into a beneficiary or a loss payable payee or permit any such policy Contract to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take do any of the actions described foregoing or knowingly take any action which results or is reasonably likely to result in Section 5.1(a) through (y) aboveany of the conditions to the Merger set forth in Article VI not being satisfied.
Appears in 1 contract
Samples: Merger Agreement (Sands Regent)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth described in Section 5.1 of the Company Disclosure Schedule, or as required by applicable Law, during the period from the date of hereof to the Effective Time or the date this Agreement and continuing until the earlier of the termination of this Agreement is terminated pursuant to its termsArticle VII herein, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Boardapplicable, the Company shall use its reasonable best efforts to conduct its and each of its subsidiaries shallSubsidiaries’ business in the ordinary course consistent with past practice and, except to the extent that Parent consistent therewith, shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject use reasonable best efforts to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present and its Subsidiaries’ current business organizationorganizations, (ii) keep available the services service of its present and its Subsidiaries’ current officers and employees, employees and (iii) preserve its and its Subsidiaries’ relationships and goodwill with customers, suppliers, distributorsGovernmental Entities, licensorsemployees, licensees, business associates and others having significant business dealings with which it has business dealingsand its Subsidiaries. In additionWithout limiting the generality of the foregoing, except as permitted contemplated by the terms of this Agreement, and except as provided described in Section 5.1 of the Company Disclosure Schedule, or as required by GAAP or applicable Law, during the period from the date hereof to the Effective Time, the Company shall not, and shall not permit its Subsidiaries to, without the prior written consent of Parent, during such period, the Company Buyer (which consent shall not do any of the following and shall not permit its subsidiaries to do any of the following:be unreasonably conditioned, delayed or withheld):
(a) Waive amend its certificate of incorporation or bylaws or comparable organizational documents in any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedulematerial respect;
(b) Grant issue, pledge, dispose of, grant, transfer, encumber, sell, deliver or agree or commit to issue pledge, dispose of, transfer, encumber, sell, deliver or grant (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any severance shares of any class or termination pay to any officer other securities or employee equity equivalents (including, without limitation, any Stock Options) except pursuant to written agreements outstanding, or policies existing, on for the date hereof issuance and disclosed sale of Shares in compliance with the terms of outstanding Stock Options set forth in Section 3.4(b) of the Company Schedule, Disclosure Schedule or adopt any new severance planthe Convertible Notes in accordance with their existing terms;
(c) Transfer other than dividends made by any Subsidiary of the Company to the Company or license one of its wholly-owned Subsidiaries, split, combine or reclassify any shares of capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of, or redeem or repurchase, any shares of capital stock or make any other actual, constructive or deemed distribution in respect of the shares of capital stock;
(d) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(e) incur debt, excluding ordinary course of business drawdowns on the Credit Agreement revolver, in excess of $2,500,000, other than pursuant to the Short Term Liquidity Facility (or other indebtedness in lieu thereof of the type provided in the third to last sentence of this Section 5.1), the proceeds of which are used solely for the refinancing of the Convertible Notes and paying related costs and expenses (including without limitation associated tax liabilities, if any) (other than assumption or incurrence of debt in connection with the acquisition of companies or assets in Medicare DMEPOS competitive bidding areas in which the Company has not been awarded a competitive bidding contract);
(f) except in connection with the acquisition of assets intended to enable the Company to service patients in competitive bidding areas in which the Company has not been awarded a competitive bidding contract, (i) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except in the ordinary course of business consistent with past practice, or (ii) make any loans, advances or capital contributions to any person other Person (other than customary loans or entity advances to employees, in each case in the ordinary course of business consistent with past practice) and in an amount not exceeding $500,000 in the aggregate at any time outstanding);
(i) except as may be required by Law (including amendments necessary to comply with, and prevent the imposition of any tax, penalty or otherwise extendinterest under, Section 409A of the Code), enter into, adopt or amend or modify in any material respect or terminate any rights to the Company Intellectual Propertybonus, or enter into grants to future patentprofit sharing, copyright compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other intellectual property rightsemployee benefit agreement, trust, plan or fund; (ii) other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock non-executive employees, make any increase in the ordinary course compensation or fringe benefits of business and consistent with past practices.
any employee (eprovided that such employee is not a director or officer); or (iii) Purchase, redeem increase in any manner the compensation or otherwise acquire, directly fringe benefits of any director or indirectly, any shares of capital stock of the Company or its subsidiariesofficer, except repurchases of unvested shares at cost in connection with the termination of the service relationship with as may be required by any employee, director or consultant pursuant to stock option or purchase agreements contract in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date hereof as listed on Section 5.1(g) of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries)Company Disclosure Schedule;
(h) Acquire acquire, sell, lease or agree dispose of any material amount of property or assets in any single transaction or series of related transactions except (i) pursuant to acquire by merging existing contracts or consolidating with, or by purchasing any equity interest commitments disclosed in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business 5.1 of the Company Disclosure Schedule, (ii) if such transaction or enter into any joint venture, strategic partnership transactions (A) individually have a fair market value of less than $2,000,000 or alliance;
(iB) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregateaggregate have a fair market value of less than $5,000,000, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products (iii) in the ordinary course of business consistent with past practice or (it being agreed that Parent shall iv) for the acquisition of companies or assets in Medicare DMEPOS competitive bidding areas in which the Company has not unreasonably withhold consent been awarded a competitive bidding contract;
(i) grant or forgive any loans to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)officers or directors;
(j) Incurexcept as may be required as a result of a change in Law or in GAAP, assume change any of the financial accounting principles or pre-pay practices used by it;
(k) (i) change any indebtedness material method of Tax accounting, or change any material Tax election, (ii) file any amended Tax Return involving a material amount of additional Taxes (except as required by Law), (iii) settle or compromise any Tax liability, or any claim for borrowed money, guarantee any indebtedness or obligation a material refund of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition Taxes or enter into any arrangement having the economic effect of closing agreement with respect to any material Tax, except for an agreement or compromise with respect to a Tax for an amount that is not materially in excess of the foregoing amount reserved thereof on the financial statements of the Company and its Subsidiaries included in the SEC Reports, and (iv) agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of Taxes (other than extensions and waivers granted during the ordinary course of an audit or examination);
(i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein except either (A) pursuant to existing contracts or commitments disclosed in connection with Section 5.1 of the financing Company Disclosure Schedule, (B) if such transaction or transactions (x) individually have a fair market value of less than $2,000,000, or (y) in the aggregate have a fair market value of less than $5,000,000 (other than transactions to acquire companies or assets in Medicare DMEPOS competitive bidding areas in which the Company has not been awarded a competitive bidding contract), or (C) in the ordinary course trade payables of business consistent with past practice, (ii) take any action which would be reasonably likely to result in a Company Material Adverse Effect or (iii) authorize any new capital expenditure or expenditures which (A) in the aggregate are in excess of $5,000,000, or (B) are related to Project Symphony and in the aggregate are in excess of $1,000,000; provided, that none of the foregoing shall limit any capital expenditure required pursuant to existing credit facilities contracts or commitments that have been disclosed to Buyer or made in the ordinary course of business consistent with past practices (it being acknowledged that any capital expenditure related to Project Symphony shall not be deemed to be in the ordinary course of business consistent with past practices);
(m) except in connection with the acquisition of companies or assets intended to enable the Company to service patients in Medicare DMEPOS competitive bidding areas in which the Company has not been awarded a competitive bidding contract, or except in the ordinary course of business, enter into, amend, cancel or (iii) as contemplated by modify any Material Contract or any contract that would be a Material Contract if in effect on the date of this Agreement;
(kn) Hire revalue in any employee, except replacements for former nonmaterial respect any of its properties or assets including without limitation writing down the value of inventory or writing-officer employees, hired off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(lo) Adopt fail to maintain in full force and effect the material insurance policies covering the Company and its Subsidiaries and their respective properties, assets and businesses in a form and amount consistent with past practices;
(p) settle, release, waive or amend compromise any employee pending or threatened Legal Proceeding (i) for an amount in excess of $5,000,000; (ii) for an amount in excess of $1,000,000 in excess of the amount currently reserved for such matters; (iii) entailing obligations that would impose any material restrictions on the business or operations of the Company or any of its Subsidiaries; or (iv) that is brought by any current, former or purported holder of any capital stock purchase or employee stock option plandebt securities of the Company or any of its Subsidiaries relating to the transactions contemplated by this Agreement;
(q) cancel any debts or waive any claims or rights of substantial value (including the cancellation, compromise, release or assignment of any indebtedness owed to, or adopt claims held by, the Company or amend any material employee benefit planof its Subsidiaries), except for cancellations made or enter into any employment contract or collective bargaining agreement (waivers granted with respect to claims other than offer letters and letter agreements entered into indebtedness in the ordinary course of business consistent with past practice with employees who which, in the aggregate, are terminable "at will"), pay any special bonus not material or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants for claims other than normal periodic salary increases for non-officer employees made indebtedness which are cancelled or waived in connection with the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside settlement of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of businessactions referred to in, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating and to the distributionextent permitted by, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
clause (p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practiceabove;
(r) Authorize effect or make capital expenditures beyond permit a “plant closing” or “mass layoff” as those provided terms are defined in the Company's existing capital expenditure budgetWorker Adjustment and Retraining Notification Act (together with any similar state or local statute, rule or that are individually in excess regulation, “WARN”) without complying with the notice requirements and all other provisions of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;WARN; or
(s) Materially accelerate enter into an agreement, contract, commitment or delay collection arrangement to do any of any notes or accounts receivable in advance the foregoing that would materially impair the ability of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew to consummate the Merger in accordance with the terms hereof. The Company shall (x) redeem on September 1, 2008 all of the Convertible Notes the holders of which have elected to have the Company so redeem pursuant to the current terms thereof using only the proceeds of the Short Term Liquidity Facility or, solely to the extent such proceeds are not available, pursuant to other indebtedness incurred in lieu thereof, provided that such other indebtedness shall be prepayable by the Company at any insurance policy in effect time and shall be on market terms as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first such other indebtedness is incurred and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment with the proceeds of the Financing from the Buyer, repay and discharge the indebtedness pursuant to the Short Term Liquidity Facility or the other indebtedness incurred in lieu thereof and the Credit Agreement on the Closing. The Company shall use it reasonable best efforts to obtain the financing contemplated by the Short Term Liquidity Facility. The Company shall, except as prohibited by applicable Law or as would jeopardize attorney-client privilege (but in such event, the Company will use its commercially reasonable efforts to keep Buyer fully informed), keep Buyer fully informed, on a current basis, of any new products material events, discussions, notices or changes with respect to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing Legal Proceeding involving the Company or otherwise to take any of the actions described in Section 5.1(a) through (y) aboveits Subsidiaries.
Appears in 1 contract
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during During the period from ---------------------------------- the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, terms or the Effective Appointment Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted course consistent with past practice and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes Taxes when due, due subject to good faith disputes over such debts or taxesTaxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable best efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, licensees and others with which it has business dealings. In addition, during that period the Company will promptly notify Parent of any material event involving its business or operations consistent with the agreements contained herein. In addition, except as permitted by the terms of this Agreement, the Transaction Option Agreement or the Stockholders' Agreements, and except as provided in contemplated by this Agreement, the Company ScheduleTransaction Option Agreement or the Stockholders' Agreements, without the prior written consent of ParentParent during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Appointment Time, during such periodexcept as set forth in Section 5.1 of the Company Disclosure Schedule, the ----------- Company shall not do any of the following and shall not permit any of its subsidiaries to do any of the following:
(a) Waive Except as provided in this Agreement, waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans plans;
(b) Grant any increase in compensation or fringe benefits, bonus or severance or termination pay to any director, officer or employee other than in the ordinary course of business, consistent with past practice, except pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay as required by applicable law), copies of which have been provided to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company ScheduleParent, or adopt or enter into any new severance planplan or agreement;
(c) Transfer Enter into any licensing or other agreement with regard to the acquisition, distribution or licensing of any Intellectual Property, or transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patentother than non- exclusive licenses, copyright distribution or other intellectual property rights, other than non-exclusive licenses granted similar agreements entered in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)practice;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock of the Company or split, combine or reclassify any capital stock of the Company or any subsidiary or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for for, any capital stock; provided that any stock of the Company's wholly-owned subsidiaries may declare, set aside Company or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.any subsidiary;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or any of its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service employment relationship with any employee, director or consultant employee pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this AgreementCompany Options, and (ii) the grant pursuant to grants of employee stock options, consistent with the Company's established past practice for similarly situated employees, Company Options to non-officer newly hired employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection accordance with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters terms and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary conditions of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related Option Plan pursuant to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998Company Option was granted;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) above.
Appears in 1 contract
Samples: Merger Agreement (Agfa Corp)
Conduct of Business by the Company. Except as contemplated by this Agreement or as for matters set forth in Section 5.1 5.01 of the Company ScheduleDisclosure Letter or otherwise contemplated or required by this Agreement, during or as required by a Governmental Entity or by applicable Law, or as required in connection with any Proceedings, or with the period prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Boardshall use commercially reasonable efforts to, (x) conduct its business in the Company and each ordinary course of business in all material respects, (y) maintain in effect all material Permits necessary for the lawful conduct of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its businessbusiness and (z) preserve intact, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers goodwill and existing relationships with employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, suppliers and others Governmental Entities and any other Person having a material business relationship with which it has business dealingsit. In addition, and without limiting the generality of the foregoing, except as permitted set forth in the Company Disclosure Letter or otherwise contemplated or required by the terms of this Agreement, and except or as provided required by a Governmental Entity or by applicable Law, or as required in the Company Scheduleconnection with any Proceedings, without or with the prior written consent of ParentParent (which consent shall not be unreasonably withheld, during such periodconditioned or delayed), from the date of this Agreement until the Effective Time, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(ai) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declaredeclare, set aside or pay any dividends on on, or make any other distributions (whether in cash, stock, equity securities stock or propertyproperty or any combination thereof) in respect of, any of its capital stock, other equity interests or voting securities, except for (A) quarterly cash dividends payable by the Company in respect of shares of Company Common Stock on a schedule consistent with the Company’s past practices in an amount per share of Company Common Stock not in excess of (1) $0.385 for quarterly dividends declared before June 1, 2020 and (2) $0.41 for quarterly dividends declared on or after June 1, 2020, (B) dividend equivalents accrued or payable by the Company in respect of Company Restricted Stock in accordance with the applicable award agreements, and (C) a “stub period” dividend to holders of record of Company Common Stock as of immediately prior to the Effective Time equal to the product of (1) the number of days from the record date for payment of the last quarterly dividend paid by the Company prior to the Effective Time, multiplied by (2) a daily dividend rate determined by dividing the amount of the last quarterly dividend paid prior to the Effective Time by ninety-one (91);
(ii) amend any of its Organizational Documents (except for immaterial or ministerial amendments or amendments required by changes in Law);
(iii) split, combine, consolidate, subdivide or reclassify any of its capital stock, other equity interests or voting securities, or securities convertible into or exchangeable or exercisable for capital stock or splitother equity interests or voting securities, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for its capital stock, other equity interests or voting securities;
(iv) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any capital stock; provided that stock or voting securities of, or equity interests in, the Company or any securities of the Company convertible into or exchangeable or exercisable for capital stock or voting securities of, or equity interests in, the Company's wholly-owned subsidiaries may declare, set aside or pay dividends any warrants, calls, options, “phantom” stock or make units, stock appreciation rights, or other distributions rights to acquire any such capital stock, securities, interests or rights, except for (A) the acquisition by the Company of shares of Company Common Stock in the open market to satisfy its obligations under all Company Benefit Plans and (B) the withholding of shares of Company Common Stock to satisfy Tax obligations with respect to their capital stock awards granted pursuant to the Company Stock Plan;
(v) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien any Equity Securities or Company Voting Debt, in each case, except for the settlement of Company Restricted Stock, Company Performance Stock or Company Unpaid Performance Stock;
(vi) (A) grant to any Company Personnel any increase in compensation or benefits (including paying to any Company Personnel any amount not due) except in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, but in any shares event not exceeding increases with a value in the aggregate of capital stock 6.10% of the current cost of compensation and benefits provided to Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding Personnel as of the date of this Agreement, and (iiB) the grant of employee stock optionsto any Company Personnel any increase in change-in-control, consistent with the Company's established past practice for similarly situated employeesseverance, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Causeretention or termination pay, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into or amend any joint venturechange-in-control, strategic partnership severance, retention or alliance;
termination agreement with any Company Personnel, (iC) Sellestablish, leaseadopt, licenseenter into, encumber amend in any material respect or otherwise dispose of terminate any properties Company Benefit Plan or assets which are materialCompany Benefit Agreement (or any plan or agreement that would be a Company Benefit Plan or Company Benefit Agreement if in existence on the date hereof), individually or in the aggregate, to the business of the Companyeach case, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice practices or (it being agreed that Parent shall not unreasonably withhold consent D) take any action to accelerate the time of vesting, funding or payment of any non-exclusive license agreement related compensation or benefits under any Company Benefit Plan or Company Benefit Agreement, except in the case of the foregoing clause (A) through (D) for actions required pursuant to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days terms of any request for consent shall constitute such consentCompany Benefit Plan or Company Benefit Agreement existing on the date hereof that has been made available to Parent, or as expressly required by the terms and conditions of this Agreement;
(vii) make any material change in accounting methods, principles or practices, except to the extent as may have been required by a change in applicable Law or GAAP or by any Governmental Entity (including the SEC or the Public Company Accounting Oversight Board);
(jviii) Incurmake any acquisition or disposition, assume sale or pretransfer of an asset or business (including by merger, consolidation or acquisition of stock or any other equity interests or assets) except for (A) any acquisition or disposition for consideration that is individually not in excess of $25,000,000 and in the aggregate not in excess of $50,000,000 or (B) any disposition of obsolete or worn-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities out equipment in the ordinary course of business, or (iii) as contemplated by this Agreement;
(kix) Hire incur any employeeIndebtedness, except replacements for former non-officer employees(A) as reasonably necessary to finance any capital expenditures permitted under Section 5.01(a)(x), hired (B) Indebtedness in replacement of existing Indebtedness (provided that the aggregate commitments or principal amounts thereunder shall not be increased), (C) guarantees by the Company of existing Indebtedness, (D) guarantees and other credit support by the Company of obligations of the Trust in the ordinary course of business consistent with past practice, (E) borrowings under existing revolving credit facilities (or replacements thereof on comparable terms) in the ordinary course of business or (F) Indebtedness in amounts necessary to maintain the capital structure of the Company or the Trust, as authorized by the PUCT and the NMPRC, and to maintain the present capital structure of the Company consistent with past practice in all material respects;
(lx) Adopt make, or agree or commit to make, any capital expenditure, except (A) in accordance with the capital plan set forth in Section 5.01(a)(x) of the Company Disclosure Letter, plus a 10% variance for each principal category set forth in such capital plan, (B) with respect to any capital expenditure not addressed by the foregoing clause (A), not to exceed $30,000,000 in the aggregate in any twelve (12) month period, (C) capital expenditures related to operational emergencies subject to Section 5.01(b) or (D) as required by Law or a Governmental Entity; provided, that, in the case of clauses (C) and (D), the Company shall provide Parent with notice of such action taken as soon as reasonably practicable thereafter;
(xi) enter into, modify or amend in any employee stock purchase or employee stock option planmaterial respect, or adopt terminate or waive any material right under, any Company Contract (except for (A) any modification, amendment, termination or waiver in the ordinary course of business or (B) a termination without material penalty or loss of material benefit to the Company);
(xii) make or change any material Tax election, change any material method of Tax accounting, settle or compromise any material Tax liability, audit or other proceeding, compromise or surrender any refund, credit or other similar benefit, enter into any closing agreements relating to a material amount of Taxes, file or amend any material Tax Return, grant any waiver of any statute of limitations with respect to, or any extension of a period for the assessment of, any material Tax (excluding extensions of time to file Tax Returns obtained in the ordinary course);
(xiii) waive, release, assign, settle or compromise any material Claim against the Company, except to the extent permitted by Section 5.02 and except for waivers, releases, assignments, settlements or compromises that are limited solely to the payment of monetary damages and that, with respect to the payment of such monetary damages, the amount of monetary damages to be paid by the Company does not exceed (A) the amount with respect thereto reflected on the Company Financial Statements (including the notes thereto) or (B) $10,000,000, in the aggregate, in excess of the proceeds received or to be received from any insurance policies in connection with such payment;
(xiv) terminate the employment of any employee benefit planat the level of Vice President or above, other than for cause;
(xv) waive the restrictive covenant obligations of any employee of the Company;
(xvi) enter into, materially amend, terminate or extend any collective bargaining agreement or similar labor agreement, other than as required by applicable Law, or voluntarily recognize or certify any union, works council or other employee representative body as the bargaining representative of any employees of the Company;
(xvii) effectuate a “plant closing” or “mass layoff,” as those terms are defined in the WARN Act;
(xviii) enter into a new line of business or cease operations of an existing line of business;
(xix) adopt or recommend a plan or agreement of complete or partial liquidation or dissolution, restructuring or other reorganization;
(xx) form or acquire any Subsidiary;
(xxi) materially change any of its energy price risk management and marketing of energy parameters, limits and guidelines (the “Company Risk Management Guidelines”) or enter into any employment contract physical commodity transactions, exchange-traded futures and options transactions, over-the-counter transactions and derivatives thereof or collective bargaining agreement (similar transactions other than offer letters as permitted by the Company Risk Management Guidelines;
(xxii) materially change any of its IT Policies and letter agreements entered into Procedures except as required by applicable Law or in accordance with Good Utility Practice;
(xxiii) fail to maintain, terminate or cancel any material insurance coverage maintained by the Company with respect to any material assets without using commercially reasonable efforts to replace such coverage with a comparable amount of insurance coverage to the extent available on commercially reasonable terms;
(xxiv) except to the extent permitted by Section 5.02, initiate or pursue any Proceedings with or before any Governmental Entity;
(xxv) except as necessary in the ordinary course of business consistent with past practice with employees who are terminable "at will")practice, pay grant or acquire, agree to grant to or acquire from any special bonus Person, or special remuneration dispose of or permit to lapse any rights to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesIntellectual Property; or
(zxxvi) Agree in writing authorize or otherwise enter into any Contract to take do any of the actions described in Section 5.1(a) through (y) aboveforegoing.
Appears in 1 contract
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its termsterms and the Closing (the “Interim Period”), the Effective Time, or such time as Parent's designees shall constitute a majority each of the Company Board, and the Company and each of its subsidiaries Company’s Subsidiaries shall, except to the extent that Parent BRPA shall otherwise consent in writingwriting (which consent shall not be unreasonably withheld, conditioned or delayed) or as set forth in Schedule 4.1 of the Company Schedules or as contemplated by this Agreement, carry on its business, in all material respects, business in the usual, regular and ordinary coursecourse consistent with past practices, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, Legal Requirements (except as expressly contemplated by Schedule 4.1 of the Company Schedules) and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present key officers and employees, and (iii) preserve its relationships with key customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings; provided, that, in the case of each of the preceding clauses (i)-(iii), during any period of full or partial suspension of operations related to COVID-19 or SARS-CoV-2 virus (or any mutation or variation thereof), the Company may, in connection with the COVID-19 pandemic (or any mutation or variation thereof), take such actions as are reasonably necessary (A) to protect the health and safety of the Company’s or its Subsidiaries’ employees and other individuals having business dealings with the Company or its Subsidiaries or (B) to reasonably respond to third-party supply or service disruptions caused by the COVID-19 pandemic, COVID-19 or SARS-CoV-2 virus (or any mutation or variation thereof), shall provide prompt notice to BRPA of the taking of any action permitted by this proviso. In addition, except as required or permitted or contemplated by the terms of this Agreement, and except Agreement or as provided set forth in Schedule 4.1 of the Company ScheduleSchedules, without the prior written consent of ParentBRPA, which consent shall not be unreasonably withheld, conditioned or delayed, during such periodthe Interim Period, the Company and the Company’s Subsidiaries shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans Plan or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company SchedulePlan;
(b) Grant any material severance or termination pay to (i) any officer or employee (ii) any employee, except pursuant to applicable Legal Requirements, written agreements outstanding, or Plans or policies existing, existing on the date hereof and as previously or concurrently disclosed or made available to the other Party, or in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock case of the Company or and its subsidiaries, Subsidiaries except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employeepromotion, director hiring or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments firing of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(lc) Adopt or amend any employee stock purchase or employee stock option planAbandon, dispose of, allow to lapse, transfer, sell, assign, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration exclusively license to any directorPerson or otherwise extend, employee amend or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, modify any existing or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or proceduresfuture Intellectual Property Rights;
(md) Make any payments outside of the ordinary course of business Fail to pay its accounts payable or collect its accounts receivable in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent accordance with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) above.
Appears in 1 contract
Samples: Agreement and Plan of Merger (BRAC Lending Group LLC)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during During the period from the date of this Agreement and continuing until to the Effective Time (or such earlier of the termination of date on which this Agreement may be terminated in accordance with Section 7.01), except as required by applicable Law, consented to in writing in advance by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), or otherwise specifically contemplated or permitted by or required pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Boardthis Agreement, the Company shall, and shall cause each of its subsidiaries shallSubsidiaries, except to (subject to the extent that Parent shall otherwise consent in writingother requirements of this Section 4.01), carry on its business, in all material respects, business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects course consistent with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, past practice and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact in all material respects its present current business organization, goodwill, and ongoing businesses to the end that its goodwill and ongoing businesses shall be materially unimpaired at the Effective Time, (ii) keep (without limiting any additional information Parent may request pursuant to Section 5.02) promptly deliver to Parent copies of (1) its unaudited monthly financial statements as they become available between the services date of this Agreement and the Closing Date on or prior to the fifteenth (15th) Business Day following the last day of each such month and (2) its present officers and employeesstandard weekly cash reports consistent with past practices, and (iii) preserve its relationships not incur aggregate Transaction expenses with customersthe Known Service Providers in excess of the amounts set forth on Section 5.14 of the Company Disclosure Letter (which amount, suppliersfor the avoidance of doubt, distributorsshall not include any Transaction expenses that have been paid by the Company prior to June 30, licensors, licensees, and others with which it has business dealings2015). In addition, except as permitted by addition to and without limiting the terms generality of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parentforegoing, during such period, except as required by applicable Law or as otherwise specifically contemplated or permitted by or required pursuant to this Agreement (including any matters set forth on Section 4.01 of the Company Disclosure Letter), the Company shall not do any of the following not, and shall not permit its subsidiaries to do any of the following:its Subsidiaries to, without Parent’s prior written consent (which such consent shall not be unreasonably withheld, delayed or conditioned):
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declaredeclare, set aside or pay any dividends dividend on or make any other distributions (whether in cash, stock, equity securities property or propertyotherwise) in with respect to, or enter into any Contract relating to the declaration of any dividend or distribution with respect to, the shares of capital stock of the Company or the shares of capital stock of any Company Subsidiary, except for (i) the declaration and payment by the Company of regular quarterly dividends for Senior Preferred Stock in accordance with past practice for the period up to the Closing Date, and (ii) the declaration and payment of dividends or other distributions to the Company or any Company Subsidiary by any directly or indirectly wholly-owned Company Subsidiary;
(b) split, subdivide, 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 any capital stock; provided that any shares of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their its capital stock in the ordinary course or other ownership interests (including any securities convertible into, exchangeable for or exercisable for shares of business and consistent with past practices.its capital stock or other ownership interests);
(ec) Purchasepurchase, redeem or otherwise acquire, directly or indirectlyoffer to purchase redeem or otherwise acquire, any shares of its capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, other securities thereof or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any such shares or other securities, except for purchases, redemptions or other acquisitions of capital stock or other securities required under the terms of any plans, arrangements or Contracts existing on the date hereof between the Company or any of its Subsidiaries and any director, employee or former employee of the Company or any of its Subsidiaries or in connection with the exercise of Stock Options or the vesting of Restricted Stock;
(d) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien any shares of such capital stock or other ownership interests, any other voting securities or any securities convertible into shares of capital stockinto, exchangeable for, exercisable for, or enter into other agreements any rights, warrants or commitments of any character obligating it options to issue acquire, any such shares shares, ownership interests, voting securities or convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to upon the exercise of Stock Options therefor outstanding as of on the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired hereof in accordance with Section 5.1((k))their terms on the date hereof;
(e) amend the certificate of incorporation or the bylaws of the Company or other comparable charter or organizational documents of the Company or any of the Company Subsidiaries;
(f) make any acquisition (including by merger, consolidation, stock acquisition or otherwise) of the capital stock or all or substantially all of the assets of any other Person;
(g) Causeadopt a plan or agreement of complete or partial liquidation or dissolution, permit or propose any amendments to its Certificate of Incorporationmerger, Bylaws consolidation, restructuring, recapitalization or other charter documents (reorganization of the Company or similar governing instruments of any of its subsidiaries)the Company Subsidiaries;
(h) Acquire or agree to acquire by merging or consolidating withexcept for (i) intercompany balances, incur any Indebtedness for borrowed money, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except (ii) as permitted by Section 5.1((m)) or ((r)4.01(v), guarantee any Indebtedness of a third party, enter into any Contract with respect to Indebtedness, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise acquire encumber any assets, or agree to acquire suffer any assets which are material, individually or in the aggregate, to the business of the Company Lien thereupon or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement Contract having the economic effect of any of the foregoing other than foregoing;
(i) sell, transfer, lease (as lessor), license, mortgage, sell and leaseback or otherwise encumber or subject to any Lien or otherwise dispose of any of its properties or other assets (including the capital stock or other equity interests in connection with the financing of ordinary course trade payables consistent with past practice, any Company Subsidiary) or any interests therein (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employeeincluding securitizations), except replacements (A) for former non-officer employeessales, hired licenses or dispositions of properties or other assets or interests therein in the ordinary course of business consistent with past practice, (B) Liens securing existing Indebtedness, (C) pursuant to Contracts in force as of the date hereof, (D) dispositions of obsolete or worthless assets that are no longer useful in the conduct of the business of the Company, (E) for transfers among the Company and its Subsidiaries, or (F) for any instance in which the Company or any of its Subsidiaries sells, transfers, leases (as lessor), licenses, mortgages, sells and leasebacks or otherwise encumbers or subject to any Lien or otherwise disposes of any of its properties or other assets or any interests therein (including securitizations) in amounts less than or equal to ten thousand dollars ($10,000) individually or fifty thousand dollars ($50,000) in the aggregate, in each instance, at approximate fair market value for such properties or assets;
(lj) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters with respect to actions covered by Section 4.01(q), pay, discharge, settle or satisfy any suit, action or claim, other than (A) settlements of current, pending or future suits, actions or claims that are set forth on Section 3.01(g) of the Company Disclosure Letter subject to the limits and letter agreements entered into conditions set forth on Section 3.01(g) of the Company Disclosure Letter, (B) settlements in the ordinary course of business consistent with past practice with employees who are terminable "at will")practices of any suit, pay action or claim, or threatened suit, action or claim, that (1) require payments by the Company or any special bonus Company Subsidiary (net of insurance proceeds) in an amount not to exceed fifty thousand dollars ($50,000) individually or special remuneration to one hundred fifty thousand dollars ($150,000) in the aggregate and (2) do not require any director, employee other material actions or consultant except pursuant to written agreements outstanding impose any other material restrictions on the date hereof and previously disclosed in writing to Parent, business or increase operations of the salaries Company or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directorsthe Company Subsidiaries, officers(C) settlements, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, business consistent with past practicepractices, of any workers’ compensation claims or change employee claims filed with the Equal Employment Opportunity Commission, so long as such settlements do not exceed fifty thousand dollars ($50,000) individually or one hundred fifty thousand dollars ($150,000) in the aggregate;
(k) amend or modify in any material respect any management policies (it being understood that changes in services and/or customer seats (but not adverse changes in pricing rates) shall not be considered material amendments or procedures;
modifications unless they result in a reduction in services of more than ten percent (m10%)) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract Material Contract or agreement enter into any Contract that, if in effect as of the date hereof, would (i) constitute a Material Contract, or (ii) reasonably be anticipated to involve payments by the Company or a Company Subsidiary in excess of fifty thousand dollars ($50,000) per annum; provided, however, that this Section 4.01(k) shall not apply with respect to customer contracts, channel partner contracts, wholesale contracts or other similar arrangements to which the Company or any subsidiary thereof of the Company Subsidiaries are or may become parties, unless such customer or partner is a party or waive, release or assign any material rights or claims thereunderwould be required to be set forth on Section 3.01(v) of the Company Disclosure Letter if in effect during the period covered thereby;
(ol) Enter into, amend or extend any contracts, agreementsexcept as required to comply with (i) applicable Law, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination (ii) any Contract entered into by the Company for convenience on not more than 60 days' notice;
or a Company Subsidiary prior to the date hereof, (pA) Materially revalue adopt, enter into, terminate or materially amend (1) any Company Benefit Plan or (2) any other agreement, plan or policy involving the Company or any of its assets Subsidiaries and one or more of their respective current or former employees or members of the Board, (B) increase the compensation, bonus or fringe or other benefits offered by the Company or its Subsidiaries other than the booking accruals of reserves benefits in the ordinary course of business and consistent with past practicespractice, (C) orother than as set forth on Section 4.01(l) of the Company Disclosure Letter, grant any entitlement to severance or termination pay or termination benefits or increase in any manner the severance or termination pay or termination benefits of any current or former member of the Board of the Company or employee of the Company or any Company Subsidiary, (D) other than as contemplated by Section 4.01(z) (with respect to cash, but not equity awards), grant any awards under any bonus, incentive, performance or other compensation plan or arrangement, Company Benefit Plan (including the grant of Stock Options, “phantom” stock, stock appreciation rights, “phantom” stock rights, stock based or stock related awards, performance units or restricted stock or the removal of existing restrictions otherwise applicable to such awards), (E) except as otherwise expressly provided for in this Agreement, amend or modify any Stock Option, (F) except as required or permitted by Section 2.03 of this Agreement, take any action to accelerate the vesting or payment of any compensation or benefit under any Company Benefit Plan or (G) loan or advance any money or other property (other than reimbursement of reimbursable expenses or any advances of such expenses pursuant to Company credit cards or otherwise in the ordinary course of business consistent with past practice) to any current or former member of the Board or employee of the Company or any Company Subsidiary;
(m) enter into any agreement or engage in any transaction (other than existing arrangements with any of the following parties pursuant to which such parties are customers of the Company or any of its Subsidiaries, to the extent set forth on Section 3.01(t) of the Company Disclosure Letter) with one or more of the Company’s directors, officers or shareholders, or with any corporation, partnership (general or limited), limited liability company, association or other organization of which one or more of the Company’s directors, officers or shareholders is (A) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (B) has a direct or indirect financial interest, or (C) directly or indirectly controls, is controlled by or is under common control with;
(n) [intentionally omitted];
(o) elect to be subject to any state takeover, “control-share” or other similar statute or regulation with respect to this Agreement, the Company or the Merger or the other transactions contemplated by this Agreement;
(p) make any material change in law or in GAAP or the rules of the SEC, make any change in financial accounting methods, principles or practices, including inventory accounting practicesin each case, except for any such change required by a change in GAAP or applicable Law;
(q) Make (i) settle or compromise any loanstax claim, advances audit or capital contributions toassessment, (ii) make or change any material tax election, change any annual tax accounting period, adopt or change any method of tax accounting, (iii) amend any material tax returns or file claims for material tax refunds, or investments in(iv) enter into any material closing agreement, surrender in writing any right to claim a material tax refund, offset or other person reduction in tax liability or entity, except for loans, advances, capital contributions consent to any extension or investments between any wholly-owned subsidiary waiver of the Company and limitation period applicable to any material tax claim or assessment relating to the Company or another wholly-owned subsidiary its Subsidiaries, in each case, involving the payment of the Company and advances an amount in excess of business related expenses one hundred fifty thousand dollars (including expenses related to business travel$150,000) to employees individually, or three hundred thousand dollars ($300,000) in the ordinary course and consistent with past practiceaggregate;
(r) Authorize enter into any agreement, agreement in principle, letter of intent, memorandum of understanding or make capital expenditures beyond those provided in similar Contract with respect to any joint venture, strategic partnership or alliance (it being understood that the Company's existing capital expenditure budgetforegoing shall not include channel partnership relationships, wholesale relationships or that are individually in excess of $100,000 customer contracts or in the aggregate in excess of $500,000 in any calendar quarterarrangements, which shall be governed by Section 4.01(k) above);
(s) Materially accelerate enter into any collective bargaining agreement or delay collection of other agreement with a labor union, works council or similar organization or amend any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of businesssuch existing agreement;
(t) Materially delay or accelerate payment of enter into any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course new line of business;
(u) Settle abandon, encumber, convey title (in whole or compromise in part), exclusively license or grant any suits right or claims or threatened suits or claims for payments other licenses to Company Intellectual Property, other than in an aggregate amount in excess the ordinary course of $500,000business consistent with past practices;
(v) Make make any tax election not required capital expenditures in excess of fifty thousand dollars ($50,000) individually or two hundred fifty thousand dollars ($250,000) in the aggregate (whether budgeted or otherwise), other than any Broadsoft licenses related to new customers (including increases by law or settle or compromise any material tax liabilityexisting customers);
(w) Cancel or terminate make any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that change in the customs and practices of the Company may renew any insurance policy in effect as or its Subsidiaries with respect to the collection of the date receivables, payment of this Agreement)payables or extension of credit to customers;
(x) Increase materially reduce the aggregate dollar value amount of inventory owned any insurance coverage provided by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which existing insurance policies or otherwise amend or cancel any such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998policies;
(y) Begin shipment enter into any Contract containing “change in control” or similar provisions that would be triggered, in whole or in part, by the Merger;
(z) hire any employees or independent contractors except (i) upon written notice to Parent, hiring employees (or independent contractors) to fill vacancies occurring after the date hereof at a compensation level consistent with market rates for persons with similar experience and skills to the employee vacancy being filled or (ii) as set forth on Section 4.01(z) of any new products the Company Disclosure Letter;
(aa) engage service providers with respect to customers, except the Transactions (other than those set forth on Section 5.14 of the Company Disclosure Letter (the “Known Service Providers”)) for alpha versions and not whom payment is expected to be more than 50 beta versions one hundred thousand dollars ($100,000) in the aggregate;
(bb) commence any litigation or binding dispute resolution process (other than with respect to this Agreement or the Transactions, in either instance, against any of the parties hereto or any product delivered of the parties to customers solely for evaluation purposesthe Equity Commitment Letter); or
(zcc) Agree in writing authorize or otherwise agree or commit to take any of the actions described in Section 5.1(a) through (y) aboveforegoing actions.
Appears in 1 contract
Samples: Merger Agreement (Alteva, Inc.)
Conduct of Business by the Company. Except as contemplated by (a) From the date of this Agreement until the earlier of the Effective Time or the date, if any, on which this Agreement is validly terminated in accordance with Section 7.1, except (x) as prohibited or required by applicable Law or by any Governmental Entity, (y) as set forth in Section 5.1 4.1(a) of the Company ScheduleDisclosure Schedule or (z) as otherwise contemplated, during the period from the date of required or permitted by this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its termsAgreement, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that unless Parent shall otherwise consent (which consent shall not be unreasonably withheld, conditioned or delayed, except as otherwise set forth in writingthis Agreement), carry on the Company shall, and shall cause each of its businessSubsidiaries to, conduct its business in the Ordinary Course of Business in all material respects, in the usual, regular respects and ordinary course, in substantially the same manner as heretofore conducted and in compliance use its commercially reasonably efforts to comply in all material respects with all applicable laws Law and regulationsthe Company Permits, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of preserve its present officers assets, rights and employees, properties in good repair and (iii) condition and preserve its goodwill and its relationships with customers, suppliers, distributors, licensors, licensees, Governmental Entities and others other third parties having business dealings with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiariesSubsidiaries; provided, except repurchases however, that the failure by the Company or any of unvested shares at cost its Subsidiaries to take an action because such action is prohibited by any provision of Section 4.1(b) without Parent’s consent shall not constitute a breach under this Section 4.1(a). Notwithstanding anything to the contrary set forth in connection this Section 4.1(a), the Company and its Subsidiaries may take any actions in response to COVID-19 Measures that the Company reasonably determines are necessary or prudent for it to take and that are substantially consistent with actions taken by similarly situated Persons operating in the termination upscale casual dining segment of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements restaurant industry in effect on the date hereof (geographic regions in which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock affected businesses of the Company or any of its subsidiariesSubsidiaries operate; provided, or any securities convertible into shares of such capital stockthat, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise extent practicable, the Company shall provide prior notice to and reasonably consult with Parent before taking such actions and, to the extent such actions would otherwise require the prior written consent of Options therefor outstanding the Parent under Section 4.1(b), such actions shall require Parent’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed).
(b) Without limiting the generality of the foregoing (except as of provided herein), from the date of this Agreement, and (ii) Agreement until the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion earlier of the assets ofEffective Time or the date, if any, on which this Agreement is terminated pursuant to Section 7.1, except (x) as prohibited or required by applicable Law or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) above.Governmental Entity,
Appears in 1 contract
Conduct of Business by the Company. Except Prior to the Effective ---------------------------------- Time, except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during the period from the date any other provision of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its termsAgreement, unless Parent has previously consented in writing thereto, the Effective TimeCompany:
(a) Will, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and will cause each of its subsidiaries shallSubsidiaries to, except to the extent that Parent shall otherwise consent in writing, carry on conduct its business, in all material respects, operations in the usual, regular ordinary and ordinary normal course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices practice;
(b) Will use its reasonable best efforts, and policies will cause each of its Subsidiaries to (i) use its reasonable best efforts, to preserve intact its present their business organizationorganizations and goodwill, (ii) keep available the services of its present their respective officers and employees, employees and (iii) preserve its maintain satisfactory relationships with customersthose persons having business relationships with them;
(c) Will not amend its certificate of incorporation or by-laws or comparable governing instruments;
(d) Will, suppliersupon the occurrence of any event or change in circumstances as a result of which any representation or warranty of the Company contained in Article 4 would be untrue or incorrect if such representation or warranty were made immediately following the occurrence of such event or change in circumstance, distributorspromptly (and in any event within two business days of an executive officer of the Company obtaining knowledge thereof) notify Parent thereof;
(e) Will promptly deliver to Parent true and correct copies of any report, licensors, licensees, and others statement or schedule filed with which it has business dealings. In addition, except as permitted by the terms SEC subsequent to the date of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:;
(af) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans Will not (i) except pursuant to written agreements outstanding, or policies existing, the exercise of Company Equity Rights and other contractual rights existing on the date hereof and disclosed in pursuant to this Agreement, issue any shares of its capital stock, effect any stock split or otherwise change its capitalization as it existed on the date hereof, (ii) grant, confer or award any option, warrant, conversion right or other Company Schedule;
Equity Rights not existing on the date hereof to acquire any shares of its capital stock, (biii) Grant grant, confer or award any bonuses or other forms of incentive compensation to any officer, director or employee, except for cash bonuses or incentives consistent with past practice or under any existing agreement, (iv) increase any compensation under any employment agreement with any of its present or future officers, directors or employees, except for normal increases for officers and employees consistent with past practice or the terms of such employment agreement, (v) grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Propertyto, or enter into grants any employment, severance or termination agreement with any officer, director or employee or amend any such agreement in any material respect, except for severance arrangements consistent with past practice with respect to future patentofficers and employees terminated by the Company, copyright or (vi) adopt any new employee benefit plan or program (including any stock option, stock benefit or stock purchase plan) or amend any existing employee benefit plan or program in any material respect;
(g) Will not (i) declare, set aside or pay any dividend or make any other distribution or payment with respect to any shares of its capital stock or other intellectual property rightsownership interests or (ii) directly or indirectly redeem, other purchase or otherwise acquire any shares of its capital stock or capital stock of any of its Subsidiaries, or make any commitment for any such action;
(h) Will not, and will not permit any of its Subsidiaries to, sell, lease or otherwise dispose of any of its assets (including capital stock of Subsidiaries) or to acquire any business or assets, except for (i) any purchase of inventory undertaken in the ordinary course of business, (ii) any printing services contracted for in the ordinary course of business (provided that the term of any such contract in (i) or (ii) is no longer than non-exclusive licenses granted one year), or (iii) in the ordinary course of business and consistent with past practice (it being agreed that Parent shall for an amount not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or allianceexceeding $250,000;
(i) Sell, lease, license, encumber or otherwise dispose Will not incur any material amount of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness money or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments (other than non-controlling investments in the ordinary course of business) in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-other than a wholly owned subsidiary Subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess issue or sell any debt securities, other than borrowings under existing lines of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected credit in the ordinary course of business;
(tj) Materially delay Will not, except pursuant to and in accordance with the capital budget previously disclosed in writing to Parent, authorize, commit to or accelerate payment make capital expenditures;
(k) Will not mortgage or otherwise encumber or subject to any lien any properties or assets except for such of any account payable beyond the foregoing as are in the ordinary course of business and would not be reasonably likely to have, individually or in advance the aggregate, a Company Material Adverse Effect;
(l) Will not enter into or agree to enter into any contract without the prior written consent of its due date or Parent unless such contract is entered into by the date such liability would have been paid Company for (i) any purchase of inventory undertaken in the ordinary course of business;
, (uii) Settle or compromise any suits or claims or threatened suits or claims printing services contracted for payments in an aggregate amount in excess the ordinary course of $500,000;
business (v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit provided that the term of any such policy to lapse contract in (it being understood that i) or (ii) is no longer than one year), or (iii) any other contract in the ordinary course of business and the total payments by the Company may renew any insurance policy contemplated thereby do not exceed $100,000 and have a term of no longer than one year (or as provided in effect as of the date of this AgreementSection 6.2(m);
(xm) Increase the aggregate dollar value Will not enter into that certain contract with GSI S.A. unless such contract has a maximum termination liability of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998$250,000;
(yn) Begin shipment Will, in advance of execution, review with Parent the terms and conditions of the proposed new contract with United Parcel Service;
(o) Will maintain insurance consistent with past practices for its businesses and properties;
(p) Will not make any new products change to customersits accounting (including tax accounting) methods, principles or practices, except for alpha versions as may be required by generally accepted accounting principles and not more than 50 beta versions except, in the case of tax accounting methods, principles or practices, in the ordinary course of business of the Company or any product delivered to customers solely for evaluation purposes; orof its Subsidiaries;
(zq) Agree Will not knowingly take any action, or knowingly fail to take any action, that would (i) jeopardize the treatment of the Merger as a "pooling of interests" for accounting purposes or (ii) jeopardize qualification of the merger as a tax-free reorganization within the meaning of Section 368(a) of the Code; and
(r) Will not take or agree in writing or otherwise to take any action which would make any of the actions described representations or warranties of the Company contained in Section 5.1(a) through (y) abovethis Agreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder.
Appears in 1 contract
Conduct of Business by the Company. Except The Company covenants that, except (i) as otherwise expressly contemplated by this Agreement or the Osicom Merger Agreement or (ii) as set forth in Section 5.1 of consented to by the Company SchedulePurchaser, during the period from and after the date of this Agreement and continuing until the earlier of: (A) the closing of the termination of this Agreement pursuant to its terms, the Effective TimeOsicom Merger, or such time as Parent's designees shall constitute a majority of the Company Board(B) August 31, 2000, the Company shall, and shall cause each of its subsidiaries shallto:
(a) use all reasonable efforts consistent with good business judgment to (i) preserve intact the present business organization of the Company and its subsidiaries and pay payables and collect receivables in a manner consistent with past practice and otherwise operate the Company and its subsidiaries in the ordinary and regular course of business consistent with past practice; (ii) maintain the Company's and its subsidiaries' books and records in accordance with past practices; (iii) keep available the services of the Company's and its subsidiaries' officers and employees; and (iv) maintain satisfactory relationships with licensors, except to suppliers, creditors, distributors, customers and others having material business relationships with the extent Company and its subsidiaries;
(b) notify the Purchaser of any change in the normal course of business or operations of the Company or its subsidiaries and of any governmental complaints, investigations or hearings of which the Company or its subsidiaries is notified (or communications received by the Company or its subsidiaries indicating that Parent shall otherwise consent in writingthe same may be contemplated), carry on its businessor the institution or settlement of litigation or any claim, in all material respectseach case involving the Company or its subsidiaries, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance to keep Purchaser informed of such events;
(c) comply in all material respects with all applicable laws and regulationslaws, pay its debts and taxes when dueincluding, subject to good faith disputes over such debts or taxeswithout limitation, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to applicable environmental laws.
(d) not
(i) preserve intact cause to be issued or sold any shares of capital stock or debt or equity securities of the Corporation or its present business organizationsubsidiaries, except for (A) shares issued on the exercise of stock options or (B) the shares to be issued in connection with the Osicom Merger;
(ii) keep available issue, grant or enter into any options, warrants, rights, subscription agreements or commitments of any kind with respect to the services issuance of any shares of capital stock or debt or equity securities of the Corporation or its present officers and employeessubsidiaries, and except in the ordinary course of business pursuant to the Company's stock plans;
(iii) preserve directly or indirectly cause to be purchased, redeemed or otherwise acquired or disposed of any shares of capital stock of the Corporation or its relationships subsidiaries;
(iv) declare, set aside or pay any dividend or other distribution;
(v) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any securities, other than pursuant to the Corporation's stock plans and agreements in accordance with customerstheir terms as in effect on the date hereof;
(vi) permit or allow the Corporation or its subsidiaries to borrow or agree to borrow any funds or incur, supplierswhether directly or by way of guarantee, distributors, licensors, licensees, and others with which it has business dealings. In additionany obligation for borrowed money, except as permitted by the terms in an aggregate amount not in excess of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do $2.1 million;
(vii) subject any of the following and shall not permit assets of the Corporation or any of its subsidiaries (real, personal or mixed, tangible or intangible) to do any encumbrance or otherwise permit or allow the sale, lease, transfer or disposition of any assets of the following:
Corporation or its subsidiaries (a) Waive any stock repurchase rightsreal, acceleratepersonal or mixed, amend tangible or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rightsintangible), other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice practice;
(it being agreed that Parent shall viii) assume, guarantee, or otherwise become responsible for the obligations of, or make any loans or advances to, any other individual, firm or corporation;
(ix) enter into any new material line of business;
(x) enter into any collective bargaining agreements;
(xi) increase the compensation or fringe benefits of any of the officers or directors of the Corporation or any of its subsidiaries or, other than in accordance with past practice, effect any material general increase in the compensation or fringe benefits of the employees of the Corporation or any of its subsidiaries or pay or agree to pay any pension, retirement allowance, or other benefit not unreasonably withhold consent to required by any non-exclusive license existing employee benefit plan or agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of officers or employees, or alter, amend, terminate in whole or in part, or curtail or permanently discontinue contributions to, any request for consent shall constitute such consent)pension plan or any other employee benefit plan;
(dxii) Declareamend the certificate of incorporation, set aside the Certificate of Designation or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any by-laws of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company Corporation or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(zxiii) Agree in writing or otherwise agree to take do any of the actions described in Section 5.1(a) through (y) aboveforegoing.
Appears in 1 contract
Conduct of Business by the Company. Except as set forth in Section 5.1(a) of the Company Disclosure Schedule or as otherwise expressly contemplated by this Agreement or as set forth consented to by Parent in Section 5.1 of the Company Schedulewriting (such consent not to be unreasonably withheld, conditioned or delayed), during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except and shall cause its Subsidiaries to, carry on their respective businesses in the ordinary course consistent with past practice and, to the extent that Parent shall otherwise consent in writingconsistent therewith, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject use reasonable best efforts to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present their current business organizationorganizations, (ii) preserve their assets and properties in good repair and condition, keep available the services of its present their current officers and employees, other key employees and (iii) preserve its their relationships with customersthose persons having business dealings with them to the end that their goodwill and ongoing businesses shall be unimpaired at the Effective Time. Except as set forth in Section 5.1(a) of the Company Disclosure Schedule, suppliersor for any action consistent with the Company’s annual business plan disclosed to Parent prior to the date hereof, distributorsor as otherwise expressly contemplated by this Agreement or the Ancillary Agreements or as consented to by Parent in writing (such consent not to be unreasonably withheld or delayed), licensors, licensees, and others with which it has business dealings. In addition, except as permitted by during the terms period from the date of this Agreement to the Effective Time or the earlier termination of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following not, and shall not permit its subsidiaries to do any of the followingits Subsidiaries to:
(ai) Waive Except as required or permitted with respect to any stock repurchase rights, accelerate, amend Company Equity Award or change by any Company Equity Plan in effect as of the period date of exercisability of options this Agreement or restricted stock, or reprice options as otherwise permitted to be granted under any employeethis Agreement, consultant, director (A) other than dividends and distributions by a direct or other stock plans or authorize cash payments in exchange for any options granted under any indirect wholly owned Subsidiary of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstandingits parent, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declaredeclare, set aside or pay any dividends on or on, make any other distributions (whether in cashrespect of, or enter into any agreement with respect to the voting of, any of its capital stock, equity securities or property(B) in respect of any capital stock or 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 any shares of its capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(eC) Purchasepurchase, redeem or otherwise acquire, directly or indirectly, acquire any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, Subsidiaries or any other securities convertible into shares of such capital stock, thereof or subscriptions, any rights, warrants or options to acquire any such shares or other securities;
(ii) issue, deliver, sell, pledge, modify or otherwise encumber or subject to any Lien any shares of such its capital stock stock, any other voting securities or any securities convertible into shares of capital stockinto, or enter into other agreements any rights, warrants or commitments of any character obligating it options to issue acquire, any such shares shares, voting securities or convertible securities, securities (other than (i) in connection with the issuance, delivery and/or sale of shares settlement of Company Common Stock pursuant to Equity Awards granted under the exercise of Options therefor Company Equity Plans and outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired Agreement in accordance with Section 5.1((k)their present terms);
(giii) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products than in the ordinary course of business consistent with past practice practice, (it being agreed that Parent shall not unreasonably withhold consent to A) amend, renew, terminate or waive any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days material provision of any request for consent shall constitute such consent)Company Material Contract except in connection with any amendments to, or normal renewals of, Company Material Contracts without materially adverse changes, additions or deletions of terms, or (B) enter into any new Contract that would be a Company Material Contract if in effect on the date hereof;
(jiv) Incur(A) merge with or enter into a consolidation with or otherwise acquire any equity interests in any person, or acquire the assets or business of any person (or any division or line of business thereof), (B) authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or any other reorganization, (C) otherwise acquire (including, through leases, subleases and licenses of real property) any assets, or (D) enter into any new line of business, except in the case of clause (A) and (C), (x) in the ordinary course of business consistent with past practice, (y) transactions involving only direct or indirect wholly owned Subsidiaries of the Company, or (z) in one or more transactions with respect to which the aggregate consideration for all such transactions during the period from the date of this Agreement to the Closing Date does not exceed $5,000,000; provided that notwithstanding the foregoing, each of clauses (A), (B) and (C) shall remain subject to the restrictions set forth in Section 6.5;
(A) transfer, sell, lease, sublease, license, sublicense, grant a non-assert with respect to or otherwise abandon or dispose of any material assets or material properties of the Company or any of its Subsidiaries, or (B) mortgage or pledge any assets or properties of the Company or any of its Subsidiaries, or subject any such assets or properties to any other Lien (except Permitted Liens), other than, in the case of both clause (A) and clause (B), (1) assets and properties associated with discontinued operations, or (2) in addition to transfers, sales, leases, subleases, licenses, sublicenses or other dispositions pursuant to clause (1), in one or more transactions with respect to which the aggregate consideration for all such transactions during the period from the date of this Agreement to the Closing Date does not exceed $5,000,000;
(vi) create, incur or assume or pre-pay any indebtedness for borrowed money, guarantee or issue any debt securities or any right to acquire debt securities, assume, guarantee, endorse or otherwise become liable or responsible (whether, directly, contingently or otherwise) for the indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any the financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing other than foregoing, except (iA) for indebtedness incurred in connection with the financing of ordinary course trade payables of business and consistent with past practicepractice under the Company’s current borrowing agreements and facilities or any refinancing, substitution or replacement thereof, (iiB) pursuant to for any inter-company indebtedness solely involving the Company and/or direct or indirect wholly owned Subsidiaries, (C) as required by existing credit facilities Contracts entered into in the ordinary course of business, (D) the Financing, (E) incremental indebtedness for borrowed money not to exceed $5,000,000 in the aggregate outstanding at any time incurred by the Company or any of its Subsidiaries other than in accordance with clauses (iiiA) as contemplated through (D), and (F) guarantees by the Company of indebtedness for borrowed money of its Subsidiaries, which indebtedness is incurred in compliance with this AgreementSection 5.1(a)(vi);
(kvii) Hire without limiting Section 6.14, waive, release, assign, settle or compromise any employeepending or threatened (in writing) Action which (A) requires the payment by the Company or any of its Subsidiaries of an amount in excess of $5,000,000 or (B) imposes any obligation or restriction on the Company or any of its Subsidiaries;
(viii) (A) make (other than in the ordinary course of business), except replacements change or revoke any Tax election, claim, surrender, disclaimer, notice or consent, or amend any Tax Return, in each case, other than to the extent required by Applicable Law, (B) settle or compromise Tax claims or liabilities in an amount in excess of a $5,000,000 income statement expense for former non-officer employeesall such Tax claims or liabilities during the period from the date of this Agreement through the Closing Date, hired (C) change (or make a request to any Taxing Authority to change) any material aspect of its method of accounting for Tax purposes, other than to the extent required by Applicable Law or relevant accounting standards, or (D) prepay any Taxes other than in the ordinary course of business consistent with past practicepractices; unless with respect to each of clauses (A) and (C) of this Section 5.1(a)(viii), any such elections or changes, as applicable, occurring during the period from the date of this Agreement through the Closing Date would not reasonably be expected to have an impact in excess of a $5,000,000 income statement expense;
(lA) Adopt except to the extent required by Applicable Law, the terms of any Company Plan or amend by Contracts existing on the date of this Agreement that have been disclosed or made available to Parent, and except in the ordinary course of business consistent with past practice for promotions and annual merit increases granted as part of the annual review process, grant or announce any employee equity or incentive awards (other than stock purchase options) or employee the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, directors or other service providers of the Company or any of its Subsidiaries, (B) grant or announce any stock option planoption, (C) except to the extent required by Applicable Law, the terms of any Company Plan, by Contracts existing on the date of this Agreement, or adopt as otherwise required by the terms of this Agreement, take any action to accelerate any payment or benefit, or the funding of any payment or benefit, payable or to be provided to any employees, directors or other service providers of the Company or its Subsidiaries, (D) hire any new employees unless such hiring is in the ordinary course of business consistent with past practice and relates to employees with an annual base salary not to exceed $250,000, (E) except to the extent required by Applicable Law or by Contracts existing on the date of this Agreement that have been disclosed or made available to Parent, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other employee benefit not required by any existing Company Plan or other agreement or arrangement in effect on the date of this Agreement to any employee, director or other service provider of the Company or any of its Subsidiaries, whether past or present, (F) except to the extent required by Applicable Law or by Contracts existing on the date of this Agreement, enter into or materially amend any material employee benefit planContracts of employment or any material consulting, bonus, severance, retention, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter similar agreement, except for agreements entered into for newly hired employees in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration an annual base salary not to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentexceed $250,000, or increase the salaries (G) except as required to ensure that any Company Plan is not then out of compliance with Applicable Law or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, business consistent with past practice, as part of the customary annual enrollment process with respect to Company Plans, enter into or change in adopt any new, or materially increase benefits under or materially amend or terminate any existing, material respect Company Plan or any management policies or procedurescollective bargaining agreement;
(mx) Make take or cause to be taken any payments action, or knowingly fail to take or cause to be taken any action, which action or failure to act would reasonably be expected to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a)(1)(A) of the Code;
(xi) change any of its material financial accounting policies or procedures currently in effect, except (A) as required by GAAP, Regulation S-X of the Exchange Act, or a Governmental Entity or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization) as determined in consultation with the Company’s outside of auditor, or (B) as required by Applicable Law;
(xii) incur, authorize or commit to any material capital expenditures other than in the ordinary course of business or other than expenditures that do not exceed, in an aggregate excess the aggregate, the amounts set forth in the Company’s capital expenditure budget set forth on Section 5.1(a)(xii) of $250,000the Company Disclosure Schedule by 15% or more;
(nxiii) Except in write up, write down or write off the ordinary course book value of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Companyits assets, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(pA) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practicespractice or (B) or, except as required by a change may be consistent with the Company’s financial accounting policies and procedures and GAAP as determined in law or in GAAP or consultation with the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practicesCompany’s outside auditor;
(qxiv) Make any loans, advances amend the Company Certificate of Incorporation or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary Bylaws of the Company and or the Company certificate of incorporation, bylaws, or another wholly-owned subsidiary similar organizational documents of any of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes’s Subsidiaries; or
(zxv) Agree in writing authorize, or otherwise commit or agree to take take, any of the actions described in Section 5.1(a) through (y) aboveforegoing actions.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Fairmount Santrol Holdings Inc.)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of Pending the Company Schedule, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant Merger. Prior to its terms, the Effective Time, unless Parent or such time Acquisition Corp. shall otherwise agree in writing or as Parent's designees shall constitute a majority otherwise contemplated by this Agreement:
(i) the business of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, be conducted only in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, ;
(ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(aA) Waive any stock repurchase rightsdirectly or indirectly redeem, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity purchase or otherwise extendacquire or agree to redeem, purchase or otherwise acquire any shares of its capital stock; (B) amend its Certificate of Incorporation or modify in any material respect any rights to Bylaws; or (C) split, combine or reclassify the outstanding Company Intellectual Property, Stock or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declaredeclare, set aside or pay any dividends on dividend payable in cash, stock or property or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions distribution with respect to their capital stock in the ordinary course of business and consistent with past practicesany such stock.
(eiii) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated not (A) issue or agree to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber issue any additional shares of the capital stock of the Company or any of its subsidiariesof, or any securities convertible into shares of such capital stock, or subscriptions, rightsoptions, warrants or options rights of any kind to acquire any shares of such capital stock or any securities convertible into shares of capital stockof, or enter into other agreements or commitments of any character obligating it Company Stock, except to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing exercise of ordinary course trade payables consistent with past practice, stock options outstanding on the date hereof; (iiB) pursuant to existing credit facilities acquire or dispose of any fixed assets or acquire or dispose of any other substantial assets other than in the ordinary course of business, ; (C) incur additional Indebtedness or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, other liabilities or enter into any employment contract or collective bargaining agreement (other transaction other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business; (D) enter into any contract, consistent agreement, commitment or arrangement with past practicerespect to any of the foregoing; or (E) except as contemplated by this Agreement, enter into any contract, agreement, commitment or change in arrangement to dissolve, merge, consolidate or enter into any other material respect any management policies or proceduresbusiness combination;
(miv) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating shall use its best efforts to preserve intact the distribution, sale, license or marketing by third parties business organization of the Company's products or products licensed by , to keep available the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any service of its assets (other than present officers and key employees, and to preserve the booking good will of reserves in the ordinary course of those having business and consistent relationships with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;it; and
(v) Make the Company will not, nor will it authorize any tax election not required by law director or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee authorize or permit any officer or employee or any attorney, accountant or other representative retained by it to, make, solicit, encourage any inquiries with respect to, or engage in any negotiations concerning, any Acquisition Proposal (as defined below). The Company will promptly advise Parent orally and in writing of any such policy to lapse inquiries or proposals (it being understood that or requests for information) and the substance thereof. As used in this paragraph, “Acquisition Proposal” shall mean any proposal for a merger or other business combination involving the Company may renew or for the acquisition of a substantial equity interest in it or any insurance policy in effect material assets of it other than as of the date of contemplated by this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first . The Company will immediately cease and second tiers of its distribution channel (which has not been "sold through" cause to end-user customers and which such distributors have the right be terminated any existing activities, discussions or negotiations with any person conducted heretofore with respect to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) aboveforegoing.
Appears in 1 contract
Samples: Merger Agreement (Agronix Inc)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during During the period from the date of this Agreement February 2, 2000 and continuing until the earlier of the termination of this Agreement pursuant to its terms, terms or the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, due subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in Article 4 of the Company ScheduleSchedules, without the prior written consent of Parent, during such periodthe period from February 2, 2000 and continuing until the earlier of the termination of this Agreement pursuant to its 24 29 terms or the Effective Time, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive Except for the acceleration of the vesting of stock options pursuant to pre-existing contractual arrangement as set forth in Part 2.2(b) of the Company Schedules, waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof February 2, 2000 and as previously disclosed in the Company Schedulewriting or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property patent rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)practice;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service employment relationship with any employee, director or consultant employee pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)January 20, 2000;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber encumber, any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) stock options pursuant to the issuance, delivery and/or sale Company Stock Option Plans granted to employees of the Company to purchase 1,200,000 shares (as appropriately adjusted for stock splits and the like) of Company Common Stock with strike prices equal to the fair market value of the Company Common Stock at the time of grant and otherwise with vesting schedules and other terms subject to Section 5; (ii) issuance of shares of the Company Common Stock in connection with the prior acquisitions of the Company, as set forth in Part 4.1 of the Company Schedules; and (iii) issuance of shares by the Company Common Stock pursuant to the exercise of Options stock options therefor outstanding as of January 20, 2000 or granted pursuant to the date of this Agreement, and preceding clause (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k)i);
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries)) except to the extent required to comply with the Company's obligations hereunder, required by law or required by the rules and regulations of Nasdaq;
(h) Acquire Except as set forth on Part 4.1 of the Company Schedules and except for the acquisition of Question Exchange, Inc. pursuant to the terms of a certain Agreement and Plan of Merger dated January 27, 2000, acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof orthereof, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any material joint ventureventures, strategic partnership partnerships or alliancealliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products equipment in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)practice;
(j) Incur, assume or pre-pay Incur any indebtedness for borrowed money, money or guarantee any such indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securitiessecurities of the Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee benefit plan or employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee director or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentemployee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(ml) Make Except for payments made in connection with the acquisition of Question Exchange, Inc., make any payments outside of the ordinary course of business consistent with past practices in an aggregate excess of $250,00050,000 individually or in the aggregate;
(nm) Except in the ordinary course of business, modifyModify, amend or terminate any Company Contract or other material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(on) Enter into, amend or extend into any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, Company other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by in the Company for convenience on not more than 60 days' noticeordinary course of business consistent with past practice;
(po) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SECGAAP, make any change in accounting methods, principles or practices, including inventory accounting practices;
(qp) Make Take any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary action that could reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposesCode; or
(zq) Agree in writing or otherwise to take any of the actions described in Section 5.1(a(a) through (yp) above.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Va Linux Systems Inc)
Conduct of Business by the Company. Except as contemplated by Pending the Merger. The Company covenants and agrees that, between the date of this Agreement or and the Effective Time, except as set forth disclosed in Section 5.1 of the Company Schedule, during the period from the date of this Agreement and continuing until the earlier Disclosure Schedule or as otherwise expressly provided for in any of the termination of this Agreement pursuant to its termsTransaction Agreements, unless the Effective Time, or such time as Parent's designees Parent and the Purchaser shall constitute a majority of the Company Boardotherwise agree in writing, the Company shall, and shall cause each of its subsidiaries shallSubsidiaries to, except to the extent that Parent shall otherwise consent in writing, carry on conduct its business, in all material respects, business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted course and in compliance a manner consistent in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligationspast practice. The Company shall, and shall cause its Subsidiaries to, use its commercially reasonable commercial efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of the current officers, key employees and consultants of the Company and its present officers and employeesSubsidiaries, and (iii) preserve the current relationships of the Company and its relationships Subsidiaries with customers, suppliersfranchisees, distributors, suppliers, licensors, licensees, contractors and others other Persons with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiariesSubsidiaries has significant business relations, (iv) maintain all assets in good repair and condition in all material respects (except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(ffor ordinary wear and tear) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale those disposed of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k));
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iiiv) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters maintain all insurance and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating Permits necessary to the distribution, sale, license or marketing by third parties conduct of the Company's products or products licensed by the Companybusiness as currently conducted, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties (vi) maintain its books of account and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves records in the usual, regular and ordinary course manner in all material respects, and (vii) maintain, enforce and protect all of business and the material Company Intellectual Property Rights in a manner consistent in all material respects with past practices) orpractice. By way of amplification and not limitation, except as required expressly contemplated by a change in law or in GAAP or the rules any of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions toTransaction Agreements, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary as disclosed in Section 5.1 of the Company and Disclosure Schedule(1), the Company or another wholly-owned subsidiary of the Company shall not, and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budgetshall cause its Subsidiaries not to, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of between the date of this Agreement);
(x) Increase Agreement and the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" Effective Time, directly or indirectly do, or propose to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30do, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise to take any of the actions described following without the prior written consent of Parent and the Purchaser:
(1) Note to Sellers: Schedule 5.1 to include monetizing the life insurance policy currently in place with respect to the life of Xx. Xxxx X. Day and severance payments to be made to Xxxxx Xxxxx & Xxxxx XxXxxxxx.
(a) amend or otherwise change its Articles of Incorporation or By-laws or the Joint Venture Agreement;(2)
(2) Purchaser understands that the By-laws need to be amended prior to the parties signing this Agreement in order to exempt the Transactions under Section 5.1(a) through (y) above6 of the Utah Control Shares Acquisition Act.
Appears in 1 contract
Samples: Merger Agreement (OCM Principal Opportunities Fund IV, LP)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, terms or the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when dueTaxes in the ordinary course of business, consistent with past practice, subject to good faith disputes over such debts or taxesTaxes, pay or perform other material obligations when due, subject to good faith disputes over such obligationsin the ordinary course of business consistent with past practice, and use its commercially reasonable efforts efforts, consistent with past practices and policies practice to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, (iii) collect its accounts receivable and any other amounts payable to it when due and otherwise enforce any obligations owed to it by others substantially in accordance with their terms, and (iiiiv) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, the Company will promptly notify Parent of any material event involving its business or operations. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such periodthe period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or repurchase of restricted stock, or reprice options granted under to any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under or take any of such plans except pursuant action with regard to written agreements outstanding, any warrant or policies existing, on other right to acquire the date hereof and disclosed in the Company ScheduleCompany’s capital stock;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously disclosed in the Company Schedulewriting to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)practice;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service employment relationship with any employee, director or consultant employee pursuant to stock option agreements or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor currently outstanding as of the date of this AgreementCompany Convertible Securities, and or (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, pursuant to non-officer employees who are hired in accordance with a bridge financing permitted by Section 5.1((k6.6(b));.
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws the Company Charter Documents or other to the charter documents (or similar governing instruments of any of its subsidiaries)subsidiary;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) thereof; or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any material joint ventureventures, strategic partnership relationships or alliancealliances or make any material loan or advance to, or investment in, any person, except for loans or capital contributions to a subsidiary or advances of routine business or travel expenses to employees, officers or directors in the ordinary course of business, consistent with past practice;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay Incur any indebtedness for borrowed money, money or guarantee any such indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securitiessecurities of the Company, enter into any "“keep well" ” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iiiii) as contemplated pursuant to a bridge financing permitted by this AgreementSection 6.6(b);
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee benefit plan or employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "“at will"”), pay any special bonus or special remuneration to any director, employee director or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentemployee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures; provided that, notwithstanding the foregoing, the Company may agree to pay, and may accrue, the Transaction Bonuses;
(ml) Make any payments capital expenditures outside of the ordinary course of business in an aggregate excess of $250,00010,000 in the aggregate;
(nm) Except in the ordinary course of business, modifyModify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party Contract or waive, release or assign any material rights or claims thereunder; provided, that (i) the renewal in the ordinary course of business of any software maintenance agreement that is in force on the date of this Agreement, which renewal is on terms substantially as favorable to the Company as those of the agreement currently in force, shall not be deemed to constitute a modification or amendment prohibited by this clause (m) and (ii) the consent of Parent to any such modification, amendment or termination shall not unreasonably be withheld or delayed;
(n) Enter into any development services, licensing, distribution, sales, sales representation or other similar agreement or obligation with respect to any material Intellectual Property or enter into any contract of a character required to be disclosed by Section 2.16 other than such agreements entered into in the ordinary course of business consistent with past practices, including pricing and contract terms;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SECGAAP, make any change in accounting methods, principles or practices;
(p) Discharge, settle or satisfy any disputed claim, litigation, arbitration, disputed liability or other controversy (absolute, accrued, asserted or unasserted, contingent or otherwise), including inventory accounting practicesany liability for Taxes, other than the discharge or satisfaction in the ordinary course of business consistent with past practice, or in accordance with their terms, of liabilities reflected or reserved against in the Company Balance Sheet in the ordinary course of business consistent with past practice, or waive any material benefits of, or agree to modify in any material respect, any confidentiality, standstill or similar agreements to which the Company or any of its subsidiaries is a party; provided, however, that the discharge or settlement of any disputed claim, liability or other controversy in the amount of less than $10,000 shall not be deemed to be prohibited by the foregoing;
(q) Make Engage in any loansaction with the intent to directly or indirectly adversely affect any of the transactions contemplated by this Agreement, advances including with respect to any “poison pill” or capital contributions tosimilar plan, agreement or arrangement, or investments inany anti-takeover, any control share acquisition, fair price, moratorium or other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposessimilar statute; or
(zr) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y5.1(q) above.
Appears in 1 contract
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of Pending the Closing. The Company Scheduleagrees that, during the period from between the date of this Agreement and continuing until the earlier of (A) the Effective Time or (B) the date of termination of this Agreement pursuant to its termsAgreement, the Effective Timeexcept as specifically permitted by any other provision of this Agreement, unless Parent shall otherwise agree in writing or such time as Parent's designees shall constitute a majority of the Company Boardrequired by applicable Law, the Company will, and will cause each of Company Subsidiary to, (i) conduct its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance operations in all material respects with all applicable laws only in the ordinary and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts usual course of business consistent with past practices practice, and policies to (i) preserve intact its present business organizationshall not take any action inconsistent therewith or with this Agreement, (ii) use its reasonable best efforts to keep available the services of its present officers the current officers, employees and employees, consultants of the Company and (iii) each Company Subsidiary and to preserve its the current relationships of the Company and each Company Subsidiary with such of the customers, suppliers, distributors, licensors, licensees, business partners and others other Persons with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of the capital stock of the Company or any Company Subsidiary has business relations, (iii) have in effect and maintain in all material respects at all times, insurance substantially of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to kinds and in the exercise of Options therefor outstanding amounts as is in effect as of the date of this Agreement, and (iiiv) keep substantially in working condition and good order and repair all of its material assets and other material properties, normal wear and tear excepted. Without limiting the grant foregoing, and as an extension thereof, except as specifically permitted by any other provision of employee stock optionsthis Agreement, consistent the Company shall not, and shall not permit any Company Subsidiary to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without Parent's prior written consent, unless required by applicable Law or in accordance with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance 2006 capital budget set forth on Section 6.1 of the Company Disclosure Schedule or as otherwise set forth on Section 6.1 of the Company Disclosure Schedule (with Section 5.1((k));each exception specifically identified by paragraph number):
(ga) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, with or by purchasing any equity interest a substantial Equity Interest in or a material substantial portion of the assets of, or by any other manner, any business or any business, corporation, partnership, association or other business organization or division thereof orwith a value or purchase price in excess of $1,000,000, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint ventureagreement providing for any merger, strategic partnership acquisition, divestiture or alliancesimilar transaction;
(ib) Sellsell, lease, license, encumber license or otherwise dispose of any of its properties or assets which are materialassets, individually or other than (i) non-exclusive licenses to customers in the aggregateordinary course of business consistent with past practice, to the business (ii) dispositions of the Companyequipment that is no longer used or useful, except (iii) sales of inventory and used equipment, or the license of the Company's products assets in the ordinary course of business consistent with past practice and (it being agreed that Parent shall iv) sales, leases, licenses or dispositions of assets with a fair market value not unreasonably withhold consent in excess of $1,000,000 in respect of any one asset and not in excess of $10,000,000 in the aggregate;
(c) amend or propose to amend the Company Certificate of Incorporation or Company Bylaws or, in the case of the Company Subsidiaries, their respective constituent documents;
(d) other than dividends from any wholly-owned Company Subsidiary to its parent, declare, set aside or pay any dividend or other distribution payable in cash, capital stock, property or otherwise with respect to any non-exclusive license agreement related shares of its capital stock, or purchase, redeem or otherwise acquire, or offer to purchase, redeem or otherwise acquire, any shares of its capital stock, other equity securities, other ownership interests or any options, warrants or rights to acquire any such stock, securities or interests (except for repurchases of Company Common Shares to the Company's enterprise business and that Parent's failure extent required pursuant to reasonably object to any such agreement within five business days of any request for consent shall constitute such consentRepurchase Rights);
(je) Incursplit, assume combine or pre-pay reclassify any indebtedness for borrowed moneyoutstanding shares of its capital stock;
(f) issue, guarantee sell, authorize, or agree to the issuance or sale of, any indebtedness shares of, or obligation of another person, issue or sell any debt securities or options, warrants, calls warrants or other rights of any kind to acquire any debt securitiesshares of, enter or any securities convertible into or exchangeable for any "keep well" or other agreement to maintain shares of, any financial statement condition or enter into any arrangement having the economic effect of any Equity Interests of the foregoing other than Company or any Company Subsidiary, except for the Company Common Shares issuable upon exercise of (i) Company Options outstanding on the date hereof or (ii) Company Warrants outstanding on the date hereof;
(g) grant, amend or change the terms of any Company Option or stock appreciation right, phantom stock or other stock-based incentive award of any kind, or accelerate or change the period of exercisability or vesting of any Company Option or stock appreciation right, phantom stock or other stock-based incentive award of any kind, or amend any Repurchase Rights or accelerate or change the period of vesting of any Company Common Shares subject to Repurchase Rights, or authorize cash payments in connection exchange for any Company Option or stock appreciation right, phantom stock or other stock-based incentive award of any kind, in each case, except as a result of the Merger;
(i) take any action with respect to the financing grant of or increase in any severance or termination pay to any current or former director, executive officer or employee (solely with respect to employees, other than in the ordinary course trade payables consistent with past practice) of the Company or any Company Subsidiary, (ii) pursuant execute any employment, deferred compensation or other similar agreement with any director, executive officer or employee (solely with respect to employees, other than in the ordinary course consistent with past practice) of the Company or any Company Subsidiary, (iii) increase the benefits payable under any existing credit facilities severance or termination pay policies or employment agreements, (iv) increase the compensation, bonus, severance or other benefits of current or former directors, executive officers or employees (solely with respect to employees, other than in the ordinary course consistent with past practice) of the Company or any Company Subsidiary, (v) adopt or establish any new employee benefit plan (including any severance plan) or amend any existing employee benefit plan (including any severance plan), except as may be required by Law, or as may be required to comply with Section 409A of the Code, or (vi) pay any benefit to a current or former director, executive officer or employee of the Company or any Company Subsidiary not required by any existing agreement or employee benefit plan (including any severance plan) or, (vii) take any action that would result in its incurring any obligation for any payments or benefits described in clauses (i), (ii) or (iii) except to the extent required in a written Contract or agreement in existence as of the date of this Agreement and set forth in the Company Disclosure Schedule;
(i) hire any Person as an executive officer of the Company or, except in the ordinary course of business, enter into, amend or extend the term of, any employment or consulting agreement with any officer, employee, consultant or independent contractor (other than offer letters to new employees using the Company's standard, unmodified form of offer letter which provides for at-will employment and which does not provide for severance, acceleration or post-termination benefits, other than those generally available to employees of the Company or a Company Subsidiary), or enter into any collective bargaining agreement;
(i) make any material Tax election except in the ordinary course of business and consistent with past practice; (ii) change in any material respect any accounting method in respect of Taxes; and (iii) as contemplated by this Agreement;
(k) Hire settle any employeematerial Tax claim, action or proceeding, except replacements for former non-officer employees, hired (A) settlements in the ordinary course of business consistent with past practice, or (B) settlements to the extent subject to reserves existing as of the date hereof in accordance with GAAP;
(k) commence any legal proceeding, or settle, compromise or otherwise resolve any litigation or other legal proceedings, other than resolution through trial judgment for any legal proceeding in existence as of the date hereof, involving a payment of more than $1,000,000 in any one case by or to the Company or any of the Company Subsidiaries;
(l) Adopt or amend incur any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement Indebtedness (other than offer letters and letter agreements entered into capitalized lease obligations permitted by clauses (o) or (s) below) in excess of $10,000,000 or which may not be prepaid without penalty, or modify the terms of any existing Indebtedness of the Company or any Company Subsidiary, except (i) draws made in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements the Company's Credit Facility not to exceed an amount of $215,000,000 outstanding on at any time or (ii) for real estate leases reasonably necessary in connection with distribution Contracts entered into after the date hereof and previously disclosed in writing to Parentthe extent permitted by this Agreement;
(m) assume, guarantee, endorse or increase otherwise as an accommodation become responsible for, the salaries or wage rates or fringe benefits (including rights to severance or indemnification) obligations of any other Person, or, subject to clause (p) below, make any loans, advances or investment in capital contribution to any Person, except (i) to or for the benefit of its directors, officers, employees the Company Subsidiaries or consultants (ii) for those not in excess of $1,000,000 in the aggregate;
(n) create or assume any material Encumbrance on any material asset;
(o) make or commit to make capital expenditures in excess of $1,000,000 in the aggregate after the date of this Agreement;
(p) make any loans or advances (other than normal periodic salary increases for non-officer routine travel advances, sales commission draws to employees made of the Company or any Company Subsidiary and advance purchase payments to suppliers in an aggregate amount not in excess of $1,250,000 in the ordinary course of businessbusiness consistent with past practice) to, or any investment in or capital contribution to, any Person (including any officer, director or employee of the Company) other than intra-company transfers between the Company and a Company Subsidiary in the ordinary course of business consistent with past practice, or change forgive or discharge in whole or in part any material respect any management policies outstanding loans or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreementsadvances, or obligations relating otherwise modify any loan previously granted to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to any such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practicesPerson;
(q) Make enter into any loansagreement, advances arrangement or capital contributions to, commitment that limits or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and otherwise restricts the Company or another wholly-owned subsidiary any Company Subsidiary, or that would, after the Effective Time, limit or restrict Parent or any of the Company and advances Parent Subsidiaries or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business related expenses (including expenses related or in any geographic area, or which provides exclusive rights or "most favored nation" rights of any kind or scope to business travel) to employees in the ordinary course and consistent with past practiceany party;
(r) Authorize other than with respect to any agreement with Parent, terminate, amend, modify or make capital expenditures beyond those provided in knowingly waive any material provision of any confidentiality or standstill agreement to which it is a party or, upon notice of a material breach, fail to enforce, to the Company's existing capital expenditure budgetfullest extent permitted by Law, the provisions of such agreement;
(i) amend, terminate or modify any Company Material Contract, or (ii) enter into any Contract that are individually would have been a Company Material Contract if it were in effect on the date hereof involving consideration or other obligation in excess of $100,000 or 1,000,000 annually, except for real estate leases reasonably necessary in connection with distribution Contracts entered into after the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or date hereof to the dates when the same would have been collected in the ordinary course of businessextent permitted by this Agreement;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date materially change the terms on which, or the date such liability would have been paid manner in which, it extends warranties or indemnification rights to customers in a manner that is adverse to the ordinary course of businessCompany or the Company Subsidiaries;
(u) Settle knowingly take, or compromise agree to commit to take, any suits action that would reasonably be expected to result in any of the conditions to the Merger not being satisfied, or claims would make any representation or threatened suits warranty of the Company contained herein inaccurate in any material respect at the Effective Time, or claims for payments that would materially impair the ability of the Company, Parent, Merger Sub or the holders of Company Common Shares to consummate the Merger in an aggregate amount in excess accordance with the terms hereof or materially delay such consummation including, without limitation, adoption or implementation of $500,000a rights plan or other anti-takeover arrangement or device;
(v) Make enter into any tax election not required by law Contract to re-sell or settle distribute any licensed or compromise any material tax liabilitynon-licensed "Parts Manufacturer Approvals" products or parts of Parent or its Affiliates;
(w) Cancel enter into any agreement, arrangement or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood commitment that subjects the Company may renew any insurance policy in effect to compliance with requirements of the Federal Acquisition Regulation or Cost Accounting Standards beyond the level of compliance required as of the date of this Agreement);, provided, that with respect to this subsection 6.1(w) such consent shall not be unreasonably withheld or delayed; or
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; or
(z) Agree in writing or otherwise agree to take any of the actions described in Section 5.1(asubsections (a) through (yw) aboveof this Section 6.
1. Nothing contained in this Agreement shall give Parent, directly or indirectly, rights to control or otherwise direct the Company's operations 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 of its operations.
Appears in 1 contract
Samples: Merger Agreement (Aviall Inc)
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms, terms or the Effective Time, or such time as Parent's designees shall constitute a majority of the Company Board, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, due subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, the Company will use reasonable efforts to promptly notify Parent of any material event involving the Company's business or operations, to the extent that the Company has knowledge of any such material event. In addition, except as permitted by the terms of this Agreement, and except as provided in Article 4 of the Company ScheduleSchedules, without the prior written consent of Parent, during such periodthe period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in the Company Schedulewriting or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to future patent, copyright or other intellectual property patent rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)practice;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service employment relationship with any employee, director or consultant employee pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price)hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber encumber, any shares of the capital stock of the Company or any of its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) stock options pursuant to the issuanceCompany Stock Option Plans granted to new employees of the Company to purchase up to 15,000 shares in the aggregate (as appropriately adjusted for stock splits and the like) of Company Common Stock with strike prices equal to the fair market value of the Company Common Stock at the time of grant and otherwise with vesting schedules and other terms and conditions consistent with past practice, delivery and/or sale (ii) issuance of shares of Company Common Stock pursuant to the exercise of Options stock options therefor outstanding as of the date of this AgreementAgreement or granted pursuant to the preceding clause (i), (iii) issuance of shares of the Company Common Stock to participants in the Company Purchase Plan pursuant to the terms thereof, and (iiiv) issuance of shares of Company Common Stock pursuant to exercise of the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k))Warrants;
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof orthereof, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any material joint ventureventures, strategic partnership partnerships or alliancealliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products equipment in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)practice;
(j) Incur, assume or pre-pay Incur any indebtedness for borrowed money, money or guarantee any such indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securitiessecurities of the Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, practice or (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employeeOther than the payment of routine, except replacements for former non-officer annual bonuses to employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt practices, adopt or amend any employee benefit plan or employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee director or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parentemployee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(ml) Make any individual or series of related payments outside of the ordinary course of business in an aggregate excess of $250,000100,000;
(nm) Except as set forth on Part 4.1(m) of the Company Schedules and except for any modifications or amendments that are made in the ordinary course of businessbusiness consistent with past practice, modify, amend or terminate any Company Contract or other material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(on) Enter into, amend or extend into any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, Company other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking of reserves in the ordinary course of business and consistent with past practicespractice;
(o) Revalue any of its assets or, except as required by a change in law or in GAAP or the rules of the SECGAAP, make any change in accounting methods, principles or practices;
(p) Engage in any action that could reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, including inventory accounting practices;whether or not otherwise permitted by the provisions of this Article IV; or
(q) Make Engage in any loans, advances action with the intent to directly or capital contributions to, or investments in, indirectly adversely impact any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;transactions contemplated by this Agreement; or
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually Hire any employee with an annual compensation level in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business;
(t) Materially delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business;
(u) Settle or compromise any suits or claims or threatened suits or claims for payments in an aggregate amount in excess of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew any insurance policy in effect as of the date of this Agreement);
(x) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes100,000; or
(zs) Agree in writing or otherwise to take any of the actions described in Section 5.1(a(a) through (yr) above.
Appears in 1 contract
Conduct of Business by the Company. Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Schedule, during For the period from commencing on the date of this Agreement and continuing until ending on the earlier of (a) the termination of this Agreement pursuant to its terms, Expiration Date and (b) the Effective Time, or such time as Parent's designees shall constitute a majority of Closing Date (the Company Board“Interim Period”), the Company and each of its subsidiaries Subsidiaries shall, except as expressly required by this Agreement and except as otherwise consented to in advance in writing by the extent that Parent Purchaser, which consent shall otherwise consent in writingnot be unreasonably withheld, carry on conditioned or delayed:
(i) conduct its business, in all material respects, businesses in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such obligations, and use its commercially reasonable efforts course on a basis consistent with past practices practice and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided not engage in the Company Schedule, without the prior written consent of Parent, during such period, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and disclosed in the Company Schedule, or adopt any new severance plan;
(c) Transfer line of business or license to enter into any person Contract, transaction or entity activity or otherwise extend, amend or modify in make any material commitment with respect any rights to the Company Intellectual Propertyor any of its Subsidiaries, or enter into grants to future patent, copyright or other intellectual property rights, other than non-exclusive licenses granted except those in the ordinary course of business and not otherwise prohibited under this Section 5.1;
(ii) use its reasonable best efforts to (A) preserve intact the goodwill and business organization of the Company and each Subsidiary, (B) keep the officers and employees of the Company and each Subsidiary available to the Purchaser and (C) preserve the relationships and goodwill of the Company and each Subsidiary with customers, distributors, suppliers, employees and other Persons having business relations with the Company or any of its Subsidiaries;
(iii) maintain its existence and good standing in its jurisdiction of organization and in each jurisdiction where it is qualified to do business, as set forth on Schedule 3.1 and Schedule 3.4;
(iv) duly and timely file or cause to be filed all reports and returns required to be filed with any Governmental Entity and promptly pay or cause to be paid when due all Taxes, assessments and governmental charges, including interest and penalties levied or assessed, unless diligently contested in good faith by appropriate proceedings;
(v) maintain in existing condition and repair (ordinary wear and tear excepted), consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent to any non-exclusive license agreement related to practices, all buildings, offices, and other structures located on the Company's enterprise business Leased Real Property, and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent)all equipment, fixtures and other tangible personal property located on the Leased Real Property;
(dvi) Declare, set aside not authorize for issuance or pay issue and deliver any dividends on additional shares of its capital stock or make any other distributions (whether in cash, securities convertible into or exchangeable for shares of its capital stock, equity securities or property) in respect issue or grant any right, option or other commitment for the issuance of any shares of its capital stock or of such securities, or split, combine or reclassify any capital stock or issue or authorize the issuance shares of any other securities in respect of, in lieu of or in substitution for any its capital stock; provided that any of the Company's wholly-owned subsidiaries may declare, set aside or pay dividends or make other distributions with respect to their capital stock in the ordinary course of business and consistent with past practices.
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the service relationship with any employee, director or consultant pursuant to stock option or purchase agreements in effect on the date hereof (which repurchases the Company shall be obligated to effectuate if the repurchase price is less than the Offer Price);
(fvii) Issue, deliver, sell, authorize, pledge not amend or otherwise encumber any shares of the capital stock of the Company or any of modify its subsidiaries, or any securities convertible into shares of such capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Options therefor outstanding as of the date of this Agreement, and (ii) the grant of employee stock options, consistent with the Company's established past practice for similarly situated employees, to non-officer employees who are hired in accordance with Section 5.1((k))charter documents;
(gviii) Causenot declare, permit pay or propose set aside for payment any amendments to its Certificate of Incorporation, Bylaws distribution or other charter documents (or similar governing instruments of make any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or, except as permitted by Section 5.1((m)) or ((r)), otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint venture, strategic partnership or alliance;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment, or the license of the Company's products in the ordinary course of business consistent with past practice (it being agreed that Parent shall not unreasonably withhold consent payment to any non-exclusive license agreement related to the Company's enterprise business and that Parent's failure to reasonably object to any such agreement within five business days of any request for consent shall constitute such consent);
(j) Incur, assume or pre-pay any indebtedness for borrowed money, guarantee any indebtedness or obligation of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business, or (iii) as contemplated by this Agreement;
(k) Hire any employee, except replacements for former non-officer employees, hired in the ordinary course of business consistent with past practice;
(l) Adopt or amend any employee stock purchase or employee stock option plan, or adopt or amend any material employee benefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director, employee or consultant except pursuant to written agreements outstanding on the date hereof and previously disclosed in writing to Parent, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of any of its directors, officers, employees or consultants other than normal periodic salary increases for non-officer employees made in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(m) Make any payments outside of the ordinary course of business in an aggregate excess of $250,000;
(n) Except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, release or assign any material rights or claims thereunder;
(o) Enter into, amend or extend any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company, other than agreements, extensions or amendments that grant non- exclusive rights to such third parties and provide for termination by the Company for convenience on not more than 60 days' notice;
(p) Materially revalue any of its assets (other than the booking payment of reserves in the ordinary course of business and consistent with past practices) or, except as required by a change in law or in GAAP or the rules of the SEC, make any change in accounting methods, principles or practices, including inventory accounting practices;
(q) Make any loans, advances or capital contributions to, or investments in, any other person or entity, except for loans, advances, capital contributions or investments between any wholly-owned subsidiary of the Company and the Company or another wholly-owned subsidiary of the Company and advances of business related expenses (including expenses related to business travel) to employees in the ordinary course and consistent with past practice;
(r) Authorize or make capital expenditures beyond those provided in the Company's existing capital expenditure budget, or that are individually in excess of $100,000 or in the aggregate in excess of $500,000 in any calendar quarter;
(s) Materially accelerate or delay collection of any notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected salaries in the ordinary course of business;
(tix) Materially delay not create any subsidiary, acquire any capital stock or accelerate payment other equity securities of any account payable beyond Person or acquire any equity or ownership interest in advance any business or entity;
(x) not dispose of or permit to lapse any right to the use of any patent, trademark, trade name, service xxxx, license or copyright of the Company or any of its due date Subsidiaries (including any of the Company Intellectual Property), or dispose of or disclose to any Person on a non-confidential basis, any trade secret, formula, process, technology or know-how of the date such liability would have been paid Company or any of its Subsidiaries not heretofore a matter of public knowledge;
(xi) not (A) sell any material asset, other than finished goods sold in the ordinary course of business;
, (uB) Settle create, incur or compromise assume any suits or claims or threatened suits or claims for payments in an aggregate amount in excess indebtedness secured by any asset of $500,000;
(v) Make any tax election not required by law or settle or compromise any material tax liability;
(w) Cancel or terminate any material insurance policy naming it as a beneficiary or a loss payable payee or permit any such policy to lapse (it being understood that the Company may renew or any insurance policy in effect as of its Subsidiaries other than debt under existing credit facilities, (C) grant, create, incur or suffer to exist any Lien on any asset of the Company or any of its Subsidiaries that did not exist on the date of this Agreement);
, (xD) Increase the aggregate dollar value of inventory owned by distributors in the first and second tiers of its distribution channel incur any material liability or obligation (which has not been "sold through" to end-user customers and which such distributors have the right to return) above the aggregate value of such inventory at June 30absolute, 1998;
(y) Begin shipment of any new products to customers, except for alpha versions and not more than 50 beta versions of any product delivered to customers solely for evaluation purposes; accrued or
(z) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (y) above.
Appears in 1 contract