Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, except as otherwise contemplated by this Agreement or unless Parent shall otherwise consent in advance in writing, the Company shall, and shall cause each of the Company Subsidiaries to, carry on their respective businesses in the usual, regular and ordinary course, consistent with past practice or its current expense budgets as disclosed to Parent, and, to the extent substantially consistent therewith, use their commercially reasonable efforts to: (a) Preserve intact their present business organizations, (b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations, (c) Keep available the services of their directors, officers and key employees, and (d) Subject to the right of contract parties to exercise applicable rights, maintain satisfactory relationships with their customers, clients, lenders, suppliers, vendors and others having material business relationships with them. Without limiting the generality of the foregoing, neither the Company nor any of the Company Subsidiaries will (except as expressly permitted or contemplated by this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule or to the extent that Parent shall otherwise consent in writing (it being understood that Parent shall respond within five Business Days to the Company’s communications soliciting such consent from Parent, such consent not be unreasonably withheld, conditioned or delayed)): (i) (A) split, combine or reclassify any shares of its capital stock, (B) declare, set aside or pay any dividend or other distribution (whether in cash, stock, or property or any combination thereof) in respect of any shares of capital stock, and dividends or distributions declared, set aside or paid by any Company Subsidiary to the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned by the Company, or (C) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Company Securities or any Company Subsidiary Securities; (ii) except for grants and awards, in type and amount consistent with ordinary course past practices, under the Company Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or equity equivalents (including, without limitation, stock appreciation rights) other than the issuance of shares of Company Common Stock (A) upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof and (B) upon the exercise of Company Warrants outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof; (iii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, in each case, other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items in the ordinary course of business of the Company and the Company Subsidiaries in a manner that is consistent with past practice; (iv) sell, lease or otherwise transfer, or create or incur any Encumbrance on, any of the Company’s or the Company Subsidiaries’ assets, securities, properties, interests or businesses, other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights in the ordinary course of business consistent with past practice; (v) except in the ordinary course of business or pursuant to credit facilities or other arrangements (including intercompany arrangements) in existence as of the date of this Agreement, incur any amount of Indebtedness for borrowed money, guarantee any Indebtedness of a third party, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assets, or create or suffer any material Encumbrance thereupon; (vi) except (A) as set forth in Section 5.1(vi) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, or (B) pursuant to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the Transaction; (vii) change any of the accounting principles or practices used by it except as required by GAAP; (viii) except for agreements existing as of the date of this Agreement, enter into any agreement or engage in any transaction with one or more of the Company’s directors, officers or stockholders, 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with; (ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases in the ordinary course of business consistent with past practice, increase the compensation, bonus or other benefits of any director, officer or senior employee; (x) (A) grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (B) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), or (C) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreement; (xi) except to the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary; (xii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger); (xiii) (A) enter into any Contract that would constitute a Material Contract if it had been entered into as of the date of this Agreement or (B) amend, modify in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing in the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (II) entering into any client or customer Contracts in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required); (xiv) enter into any new line of business; (xv) enter into any Contract to make a capital expenditure or to purchase a capital asset, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth in the budget related to such expenditures provided to Parent prior to the date of this Agreement; (xvi) enter into an agreement to take any of the foregoing actions.
Appears in 3 contracts
Samples: Merger Agreement (Remark Media, Inc.), Merger Agreement (Banks.com, Inc.), Merger Agreement (Remark Media, Inc.)
Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, except with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed) or as otherwise specifically contemplated by this Agreement Agreement, required by applicable Law or unless Parent shall otherwise consent as set forth in advance in writingSection 4.01(a) of the Company Letter, the Company shall, and shall cause each of the Company its Subsidiaries to, carry on their respective businesses in the usual, regular and ordinary course, course consistent with past practice or its current expense budgets as disclosed and use reasonable best efforts to Parent, comply with all applicable Laws and, to the extent substantially consistent therewith, use their commercially reasonable best efforts to:
(a) Preserve intact their present business organizations,
(b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep to keep available the services of their directors, current officers and key other employees, and
(d) Subject to the right of contract parties to exercise applicable rightspreserve their assets, maintain satisfactory their relationships with their material customers, clients, lenders, suppliers, vendors distributors and others having material business relationships dealings with themthem and to maintain their material rights and material Permits. Without in any way limiting the generality of the foregoing, neither during the Company nor any period from the date of the Company Subsidiaries will (except as expressly permitted or contemplated by this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule or Agreement to the extent that Effective Time, except with the prior written consent of Parent (which consent shall otherwise consent in writing (it being understood that Parent shall respond within five Business Days to the Company’s communications soliciting such consent from Parent, such consent not be unreasonably withheld, conditioned or delayed)):, as specifically contemplated by this Agreement, as required by applicable Law or as set forth in Section 4.01(a) of the Company Letter (with specific reference to the subsection of this Section 4.01 to which the information stated in such disclosure relates), the Company shall not, and shall not permit any of its Subsidiaries to:
(i) (A) split, combine or reclassify any shares of its capital stock, (B) declare, set aside or pay any dividend dividends on, or make any other distribution distributions (whether in cash, stock, stock or property or any combination thereof) in respect of, any of its capital stock or other equity or voting interests, other than (1) dividends by a direct or indirect wholly owned Subsidiary of the Company to its parent, and (2) regular quarterly cash dividends on Company Common Stock not exceeding $0.32 per share of Company Common Stock with declaration, record and payment dates consistent with past practice and in accordance with the Company’s current dividend schedule and policy, (B) split, combine, subdivide or reclassify any of its capital stock or other equity or voting interests, or securities convertible into or exchangeable or exercisable for capital 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, shares of its capital stock or other equity or voting interests, or (C) purchase, redeem or otherwise acquire any shares of capital stock, and dividends other equity or distributions declared, set aside voting interests or paid by any Company Subsidiary to other securities of the Company or any of its Subsidiaries convertible into or exchangeable or exercisable for capital stock or other equity or voting interests or any options, restricted shares, warrants, calls or rights to acquire any such shares or other securities (including any Company Subsidiary that isEquity-Based Awards, directly except pursuant to the forfeiture conditions of such Company Equity-Based Awards or indirectly, wholly owned by the Company, cashless exercise or (C) redeem, repurchase Tax withholding provisions of or otherwise acquire or offer authorizations related to redeem, repurchase or otherwise acquire any such Company Securities or any Company Subsidiary SecuritiesEquity-Based Awards as in effect as of the date of this Agreement);
(ii) except for grants and awardsissue, in type and amount consistent with ordinary course past practicesdeliver, under the Company sell, grant, pledge or otherwise encumber or subject to any Lien any (A) shares of its capital stock, other equity or voting interests or Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit to issue or sell Equivalents (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or equity equivalents (including, without limitation, stock appreciation rights) other than the issuance of shares of Company Common Stock upon the exercise or settlement of Company Equity-Based Awards outstanding as of the date of this Agreement pursuant to the existing terms thereof), or (B) securities convertible into, or exchangeable or exercisable for, or any options, warrants, calls or rights to acquire, any such stock, interests or Equity Equivalents;
(iii) amend its certificate of incorporation or bylaws (or similar organizational documents);
(iv) acquire or agree to acquire, in a single transaction or a series of related transactions, (A) upon by merging or consolidating with, or by purchasing all or a substantial portion of the exercise assets of, or by purchasing all or a substantial equity or voting interest in, or by any other manner, any business or person or division thereof or (B) any other assets other than (1) capital expenditures, which are subject to the limitations of clause (vii) below, (2) purchases of raw materials, supplies, components, subassemblies or similar assets in the ordinary course of business consistent with past practice, and (3) other assets if the amount of consideration paid or transferred by the Company Stock Options outstanding or any of its Subsidiaries would exceed $15,000,000 in the aggregate;
(v) sell, lease, license, sell and lease back, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of any of its material properties or assets (including any shares of capital stock, equity or voting interests or other rights, instruments or securities), except sales of inventory or used equipment in the ordinary course of business consistent with past practice and except for Permitted Liens;
(vi) (A) repurchase, prepay, redeem, defease, assume or incur any indebtedness, including by way of a guarantee or an issuance or sale of debt securities, or issue and sell options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, enter into any “keep well” or other 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 (1) the incurrence of borrowings under the Company’s revolving credit facility (including letters of credit) as in effect on the date of this Agreement in accordance the ordinary course of business consistent with their present terms and the provisions hereof past practice and (B2) upon the exercise of Company Warrants outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof;
(iii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, in each case, other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items indebtedness in the ordinary course of business not in excess of the Company and the Company Subsidiaries in a manner that is consistent with past practice;
$5,000,000 at any one time outstanding or (ivB) sellmake any loans, lease advances or otherwise transfercapital contributions to, or create or incur any Encumbrance oninvestments in, any of the Company’s or the Company Subsidiaries’ assets, securities, properties, interests or businessesperson, other than the sale Company or any direct or indirect wholly owned Subsidiary of equipmentthe Company, products in the case of each of clauses (A) and services and the licensing (B), other than extensions of Owned Intellectual Property Rights trade credit in the ordinary course of business consistent with past practice;
(vvii) except in the ordinary course of business incur or pursuant commit to credit facilities or other arrangements (including intercompany arrangements) in existence as of the date of this Agreement, incur any amount of Indebtedness for borrowed money, guarantee any Indebtedness of a third party, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assetsexpenditures, or create any obligations or suffer any material Encumbrance thereupon;
(vi) except liabilities in connection therewith, other than (A) as in accordance with the Company’s discretionary investments plan for 2017 and 2018 set forth in Section 5.1(vi4.01(a)(vii) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, Letter or (B) pursuant to any mandatory payments (including cash sweep arrangements) under any credit facilities increases in existence on such discretionary investments plan that individually are not in excess of $5,000,000 and in the date hereof or entered into aggregate are not in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course excess of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the Transaction;
(vii) change any of the accounting principles or practices used by it except as required by GAAP$10,000,000;
(viii) except for agreements existing as pay, discharge, settle or satisfy any claims (including any claims of the date of stockholders and any stockholder litigation relating to this Agreement, enter into the Merger or any agreement other transaction contemplated by this Agreement or engage in any transaction with one or more of the Company’s directors, officers or stockholders, or with any corporation, partnership (general or limitedotherwise), limited liability companyliabilities or obligations (whether absolute, association accrued, asserted or other organization of which one unasserted, contingent or more of the Company’s directors, officers or stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authorityotherwise), (y) has a direct other than the payment, discharge, settlement or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases satisfaction in the ordinary course of business consistent with past practice, increase or as required by their terms on the compensationdate of this Agreement, bonus of claims, liabilities or obligations reserved against 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, or for an out-of-pocket amount in excess of $5,000,000 individually, in each case, the payment, discharge, settlement or satisfaction of which does not include any material obligation (other benefits than the payment of money) to be performed by the Company or its Subsidiaries following the Closing Date;
(ix) enter into any directormaterial lease or sublease of real property (whether as a lessor, officer sublessor, lessee or senior employeesublessee), or modify or amend in any material respect, or exercise any right to renew, any material lease or sublease of real property or acquire any material interest in real property, in each case, for or involving a lease or sublease with annual lease payments in excess of $5,000,000;
(x) except as required by the terms of a Benefit Plan as in effect on the date of this Agreement, as required by applicable Law, as required to ensure that any Benefit Plan as in effect on the date of this Agreement is not then out of compliance with applicable Law, or as specifically required pursuant to this Agreement, (A) grant to adopt, establish, enter into, terminate, amend or modify any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employeeBenefit Plan, (B) increase the compensation or benefits of any Company Personnel, (C) grant or amend any award under any Benefit Plan (including the grant or amendment of Company Equity-Based Awards), (D) grant or pay any severance, separation, change in control, termination, retention or similar compensation or benefits to, or increase in any manner the severance, separation, change in control, termination, retention or similar compensation or benefits of, any Company Personnel, (E) enter into any employmenttrust, deferred annuity or insurance Contract or similar agreement or take any other action to fund or in any other way secure the payment of compensation or other similar agreement benefits under any Benefit Plan, (F) take any action to accelerate the time of payment or amend vesting of any such existing agreement)compensation, benefits or funding obligations under any Benefit Plan or otherwise or (CG) establish, adopt make any material determination under any Benefit Plan that is inconsistent with the ordinary course of business or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreementpast practice;
(xi) except to form any direct or indirect Subsidiary of the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company SubsidiaryCompany;
(xii) adopt, amend or enter into any collective bargaining agreement or other labor union Contract applicable to Company Personnel except in the ordinary course of business consistent with past practice;
(xiii) make any change in any financial or Tax accounting principle, method or practice, other than as required by GAAP or applicable Law;
(xiv) make any material Tax election inconsistent with past practice, settle or compromise any material Tax liability or refund, amend any material Tax Return, extend or waive the period of assessment or collection for any material Taxes or enter into any material agreement or arrangement the primary purpose of which relates to Taxes;
(xv) abandon or permit to lapse any of the material Intellectual Property of the Company or its Subsidiaries, except in the ordinary course of business consistent with past practice;
(xvi) (A) enter into, extend or renew any Contract or amendment thereof which, if executed prior to the date of this Agreement, would have been required to have been disclosed pursuant to Section 3.01(i)(i), (ii), (v), (vi), (vii), (ix)(2), (x) or (xii) or (B) modify or amend in any material respect any Specified Contract (other than modifications or amendments to Significant Program Contracts in the ordinary course of business consistent with past practice, which modifications or amendments would not have a material and adverse impact on the financial plan of the Company set forth in Section 3.01(s)(iv)(A) of the Company Letter) or (C) accelerate, terminate or cancel, any Specified Contract;
(xvii) incur or commit to incur any expenditures in respect of independent research and development of products, systems or services other than in an amount such that the indirect rates do not exceed the forward pricing rate proposal or agreement currently in place with the applicable Governmental Entity;
(xviii) amend, modify or waive any of the Company’s existing takeover defenses or take any action to render any state takeover or similar statute inapplicable to any transaction other than the Merger;
(xix) enter into any new line of business outside of the businesses of the Company and its Subsidiaries as of the date of this Agreement;
(xx) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a the dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than the Merger);
(xiii) (A) enter into any Contract that would constitute a Material Contract if it had been entered into as of the date of this Agreement or (B) amend, modify in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits of the Company or dissolve or liquidate any Company material Subsidiary thereunder; provided, however, that of the foregoing shall not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing in the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (II) entering into any client or customer Contracts in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required)Company;
(xivxxi) enter into or amend any new line Contract or take any other action if such Contract, amendment of business;a Contract or action would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the transactions contemplated by this Agreement; or
(xvxxii) enter into authorize any Contract to make a capital expenditure of, or to purchase a capital assetcommit, which expenditure resolve or purchase exceeds the amount or amounts allocated therefor as set forth in the budget related to such expenditures provided to Parent prior to the date of this Agreement;
(xvi) enter into an agreement agree to take any of of, the foregoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Orbital Atk, Inc.), Merger Agreement (Northrop Grumman Corp /De/)
Conduct of Business by the Company. During Except (v) as set forth on Section 4.1(a) of the Company Disclosure Letter, (w) as required by applicable Law, (x) as permitted or contemplated by this Agreement, (y) as consented to in writing by Parent (such consent not to be unreasonably withheld, delayed or conditioned) or (z) for transactions between or among the Company and the Company Subsidiaries, during the period from the date of this Agreement to the Effective Time, except as otherwise contemplated by this Agreement or unless Parent shall otherwise consent in advance in writing, the Company shall, and shall cause each of the Company Subsidiaries to, carry on their respective businesses in the usual, regular and all material respects in accordance with their ordinary course, course consistent with past practice or its current expense budgets as disclosed to Parent, and in compliance in all material respects with all applicable Laws and, to the extent substantially consistent therewith, use their commercially reasonable best efforts to:
(a) Preserve to preserve intact their present current business organizations,
(b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep keep available the services of their directors, key officers and key employees, and
(d) Subject to the right of contract parties to exercise applicable rights, maintain satisfactory other significant managers and preserve their business relationships with their significant customers, clients, lenders, suppliers, vendors distributors and others other persons having material business relationships dealings with them; provided, however, that no action by the Company or any Company Subsidiary with respect to matters specifically addressed by any other provision of this Section 4.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. Without limiting the generality of the foregoing, neither the Company nor any except (v) as set forth on Section 4.1(a) of the Company Subsidiaries will Disclosure Letter, (except w) as expressly permitted or required by applicable Law, (x) as otherwise contemplated by this Agreement, (y) as set forth in Section 5.1 of the Company Disclosure Schedule or consented to the extent that Parent shall otherwise consent in writing by Parent (it being understood that Parent shall respond within five Business Days to the Company’s communications soliciting such consent from Parent, such consent not to be unreasonably withheld, conditioned delayed or delayed)):conditioned) or (z) for transactions between or among the Company and the Company Subsidiaries, during the period from the date of this Agreement to the Effective Time, the Company shall not and shall not permit any Company Subsidiary to:
(i) (A) splitother than dividends and distributions by a direct or indirect wholly owned Company Subsidiary to its parent, combine and other than quarterly cash dividends with respect to Company Common Stock to the extent of the Company’s net income per share of Company Common Stock for the applicable prior fiscal quarter but in no event in excess of $0.05 per share of Company Common Stock per quarter, declare, set aside or reclassify pay any shares dividends on, or make any other distributions in respect of, any of its capital stock, (B) declaresplit, set aside combine or pay reclassify any dividend of its capital stock or other distribution (whether C) except pursuant to agreements entered into with respect to the Company Stock Plans that are in casheffect as of the close of business on the date of this Agreement, stockpurchase, redeem or property or any combination thereof) in respect of otherwise acquire any shares of capital stock, and dividends or distributions declared, set aside or paid by any Company Subsidiary to stock of the Company or any of the Company Subsidiaries or any other securities thereof or any rights, warrants or options to any Company Subsidiary that is, directly or indirectly, wholly owned by the Company, or (C) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any such shares or other securities which, for the avoidance of doubt, shall not restrict any cashless exercises or similar transactions pursuant to an exercise of Company Securities Stock Options or any other awards issued and outstanding under the Company Subsidiary SecuritiesStock Plans;
(ii) except for grants and awards, in type and amount consistent with ordinary course past practices, under the Company Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit to issue or sell (whether through authorize the issuance of, deliver, sell, pledge or granting otherwise encumber or subject to any Lien (except Permitted Liens), any shares of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any its capital stock of any class (or any other securities in respect of, in lieu of, or equity equivalents (includingin substitution for, without limitationshares of its capital stock), stock appreciation 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 (A) the issuance and delivery of shares of Company Common Stock (A) upon the exercise of the Company Stock Options under the Company Stock Plans, (B) in connection with other awards under the Company Stock Plans outstanding on as of the date of this Agreement Agreement, and in accordance with their present terms or (C) the authorization, issuance and the provisions hereof and (B) upon the exercise delivery of Company Warrants outstanding on the date Stock Options and/or Restricted Shares with respect to not more than 200,000 shares of this Agreement in accordance with their present terms and the provisions hereofCompany Common Stock;
(iii) acquire (by merger, consolidation, acquisition A) amend its certificate of stock incorporation or assets bylaws (or otherwiseother comparable organizational documents), directly except for such amendments made to conform to or indirectlycomply with the TBOC, or (B) merge or consolidate with any assets, securities, properties, interests or businesses, in each case, person other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items in the ordinary course of business of the another Company and the Company Subsidiaries in a manner that is consistent with past practiceEntity;
(iv) sell, lease or otherwise transfer, or create or incur any Encumbrance on, any of the Company’s or the Company Subsidiaries’ assets, securities, properties, interests or businesses, other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights except for hedging agreements entered into in the ordinary course of business consistent with past practice;
(v) except in the ordinary course practice and dispositions of business inventory or pursuant to credit facilities or other arrangements (including intercompany arrangements) in existence as of the date of this Agreement, incur any amount of Indebtedness for borrowed money, guarantee any Indebtedness of a third party, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assets, or create or suffer any material Encumbrance thereupon;
(vi) except (A) as set forth in Section 5.1(vi) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, or (B) pursuant to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the Transaction;
(vii) change any of the accounting principles or practices used by it except as required by GAAP;
(viii) except for agreements existing as of the date of this Agreement, enter into any agreement or engage in any transaction with one or more of the Company’s directors, officers or stockholders, 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases equipment in the ordinary course of business consistent with past practice, increase the compensationsell, bonus lease, license, mortgage or other benefits otherwise encumber or subject to any Lien (except Permitted Liens) or otherwise dispose of any directorof its properties or assets having a value in excess of $500,000 per fiscal quarter plus any amounts permitted but not used in prior fiscal quarters (beginning with the fiscal quarter ending December 31, officer or senior employee2009);
(xv) enter into commitments for capital expenditures involving more than $500,000 per fiscal quarter plus any amounts permitted but not used in prior fiscal quarters (beginning with the fiscal quarter ending December 31, 2009), except (A) in accordance with the capital expenditure budget set forth in Section 4.1(a) of the Company Disclosure Letter, (B) as may be required on an emergency basis or as may be otherwise necessary for the maintenance of existing facilities, machinery and equipment in good operating condition and repair in the ordinary course of business, as reflected in the capital plan of the Company previously provided to Parent or (C) to the extent covered by insurance proceeds;
(vi) other than in the ordinary course of business consistent with past practice, incur any net increase in long-term indebtedness (whether evidenced by a note or other instrument, pursuant to a financing lease, sale-leaseback transaction, or otherwise) from that existing on the date hereof or incur any net increase in short-term indebtedness from that existing on the date hereof other than up to $1 million in the aggregate of (A) short-term indebtedness under lines of credit existing on the date of this Agreement, (B) letters of credit, surety bonds, guarantees of indebtedness for borrowed money and security time deposits and (C) indebtedness relating to the reborrowing of amounts repaid;
(vii) other that the creation of and payment in respect of the Retention Pool and the payment of 2009 annual bonuses to Company Employees on December 15, 2009 as described in Section 5.12(e), other than to the extent required under Company Benefit Plans in effect on the date hereof, and other than as permitted by Section 4.1(a)(ii), (A) grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in the compensation or benefits payable or to become payable by the Company or any existing severance, change of control or termination pay or termination benefits Company Subsidiary to any officer, current or former director or employee, (B) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), or (C) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreement;
(xi) except to the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary;
(xii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger);
(xiii) (A) enter into any Contract that would constitute a Material Contract if it had been entered into as of the date of this Agreement or (B) amend, modify in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits consultant of the Company or any Company Subsidiary thereunder; providedSubsidiary, however(B) other than in the ordinary course of business consistent with past practice, that grant any increase in the foregoing shall not prevent compensation or preclude benefits payable or to become payable by the Company or any Company Subsidiary to any officer or employee of the Company or any Company Subsidiary, (C) adopt, enter into, amend or otherwise increase, reprice or accelerate the payment or vesting of the amounts, benefits or rights payable or accrued or to become payable or accrued under any Company Benefit Plan, (D) enter into or amend any employment, bonus, severance, change in control, retention or any similar agreement or any collective bargaining agreement or, grant any severance, bonus, termination, or retention pay to any officer, director, consultant or employee of the Company or any Company Subsidiaries (other than amendments to a Company Benefit Plan that do not individually or in the aggregate materially increase the cost to the Company or any Company Subsidiary of maintaining such Company Benefit Plan) or (E) pay or award any pension, retirement allowance or other non-equity incentive awards, or other employee or director benefit not required by any outstanding Company Benefit Plan;
(viii) change the accounting principles used by it unless required by GAAP, applicable Law or regulatory guidelines (or, if applicable with respect to foreign subsidiaries, the relevant foreign generally accepted accounting principles);
(ix) acquire by merging or consolidating with, by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire any material amount of assets of any other person (other than the purchase of assets from suppliers or vendors in the ordinary course of business consistent with past practice);
(Ix) negotiating and/or renewing except in the ordinary course of business consistent with past practice, make, change or rescind any material express or deemed election with respect to Taxes, settle or compromise any material claim or action relating to Taxes, or change any of its methods of accounting or of reporting income or deductions for Tax purposes in any material respect;
(xi) satisfy any claims or liabilities, other than satisfaction in the ordinary course of business consistent with past practice, or in an amount not to exceed the sum of $250,000 (net of insurance and indemnification payments payable to the Company or any Company Subsidiary) per fiscal quarter plus the amount of the aggregate liabilities reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company included in the Recent SEC Reports or incurred in the ordinary course of business consistent with past practice since the date of the Recent SEC Reports;
(xii) make any Material Contracts that are scheduled to expire upon their terms loans, advances or capital contributions to, or investments in, any other person, except (IIA) entering into loans, advances, capital contributions or investments between any client wholly owned Company Subsidiary and the Company or customer Contracts another wholly owned Company Subsidiary, (B) advances for employees, contractors and consultants in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required)C) as required by existing contracts;
(xivxiii) enter into any new line of business;
(xv) enter into any Contract to make a capital expenditure or to purchase a capital asset, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth other than in the budget related to such expenditures provided to Parent prior to the date ordinary course of business consistent with past practice, (A) modify, amend or terminate any Company Material Contract (for purposes of this Agreement;
clause (xvixiii), “Company Material Contract” shall mean each contract, arrangement, commitment or understanding to which the Company or a Company Subsidiary is a party to or is bound (w) enter into an agreement to take which is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC); (x) that contains covenants that limit the ability of the Company or any of the foregoing actions.Company Subsidiaries (or which, following the consummation of the Merger, could restrict the ability of the Surviving Company or any of its affiliates) to compete in any business or with any person or in any geographic area or distribution or sales channel, or to sell, supply or distribute any service or product, in each case, that could reasonably be expected to be material to the business of the Company and the Company Subsidiaries, taken as a whole; (y) for the top three business units of the Company and its subsidiaries that is a top three customer or a top three raw material supplier, in each case in terms of dollar amount, relating to making payments or receipt of payments during fiscal year 2009; or (z) which would prohibit or delay the consummation of any of the transactions contemplated by this Agreement), (B) waive, release, relinquish or assign any Company Material Contract (or any of the Company’s or any Company Subsidiary’s rights thereunder) or any right or claim that is material to the Company and the Company Subsidiaries, taken as a whole, or (C) cancel or forgive any indebtedness owed to the Company or any Company Subsidiary; provided, however, that, subject to Section 5.10, the Company may not under any circumstance waive or release any of its rights under any confidentiality agreement to which it is a party that was not entered into in the ordinary course of business consistent with past practice and/or any standstill agreement to which it is a party;
Appears in 2 contracts
Samples: Merger Agreement (Ico Inc), Merger Agreement (Schulman a Inc)
Conduct of Business by the Company. During the period from (a) From the date of this Agreement to until the Effective Time, except as otherwise contemplated by this Agreement (i) if the Chief Executive Officer or unless any Senior Vice President of Parent shall otherwise expressly consent in advance writing, (ii) as required by applicable Law or (iii) as expressly set forth in writingSection 5.1(a) of the Company Disclosure Letter or as otherwise expressly required by this Agreement, the Company shall, and shall cause each of the Company Subsidiaries to, carry on their respective businesses conduct its business in the usual, regular ordinary course and ordinary course, in a commercially reasonable manner consistent with past practice or practice, and shall use its current expense budgets as disclosed to Parent, and, to the extent substantially consistent therewith, use their commercially reasonable efforts to:
to (aA) Preserve preserve intact its business organization and goodwill and key relationships with its customers, suppliers, employees, contractors, distributors and others having business dealings with it, (B) keep available the services of its current officers and key employees and (C) preserve its tangible assets and properties in their present business organizations,current states of repair and condition (ordinary wear and tear excepted).
(b) Maintain in effect all of their foreign, federal, state In addition to and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep available the services of their directors, officers and key employees, and
(d) Subject to the right of contract parties to exercise applicable rights, maintain satisfactory relationships with their customers, clients, lenders, suppliers, vendors and others having material business relationships with them. Without without limiting the generality of the foregoingSection 5.1(a), neither the Company nor any except as expressly set forth in Section 5.1(b) of the Company Subsidiaries will (except Disclosure Letter or as otherwise expressly permitted or contemplated required by this Agreement, as set forth in Section 5.1 from the date hereof until the Effective Time, without the prior express written consent of Parent, the Company Disclosure Schedule shall not, and shall not permit any Company Subsidiary to, directly or to the extent that Parent shall otherwise consent in writing (it being understood that Parent shall respond within five Business Days to the Company’s communications soliciting such consent from Parent, such consent not be unreasonably withheld, conditioned or delayed)):indirectly:
(i) amend or modify, or permit the adoption of any amendment or modification to, any of its Constituent Documents;
(ii) (A) split, combine or reclassify any shares of its capital stock, (B) declare, authorize, set aside aside, make or pay any dividend or other distribution (whether in cash, stock, stock or property or any combination thereofproperty) in respect of any shares of capital stockits Securities, and other than dividends or distributions declared, set aside or paid by any Company Subsidiary to the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned Company Subsidiaries by any wholly owned Company Subsidiaries, (B) split, combine or reclassify any of its Securities or propose the Companyissuance of any Securities in respect of, in lieu of, or in substitution for shares of its Securities, or otherwise amend the terms of its Securities, (C) enter into any agreement with respect to the voting of any of its Securities, or (CD) redeemrepurchase, repurchase or otherwise acquire or offer to redeem, repurchase redeem or otherwise acquire any Company of its Securities or any Equity Rights (except in connection with the cashless exercises or similar transactions (including withholding of Taxes) pursuant to the exercise or settlement of Company Subsidiary SecuritiesStock Options or Company SARs, or settlement of Company RSUs or Unvested Restricted Stock or other awards or obligations outstanding as of the date hereof; provided that such Equity Rights are disclosed in the Company Disclosure Letter);
(iiiii) issue, deliver, sell, grant, transfer or subject to a Lien any Securities or Equity Rights, or grant to any Person any right to acquire any Securities or Equity Rights, or take any action to cause to be exercisable any otherwise unexercisable option under any existing stock option plan, except for grants and awards, in type and amount consistent with ordinary course past practices, under the Company Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit pursuant to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or equity equivalents (including, without limitation, stock appreciation rights) other than the issuance of shares of Company Common Stock (A) upon the exercise of Company Stock Options or other outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof and (B) upon options or warrants to purchase Shares, the exercise of Company Warrants SARs, the vesting of Company RSUs or Unvested Restricted Stock or settlement of other awards outstanding on as of the date of this Agreement hereof and in accordance with their present the terms and the provisions hereofof such instruments;
(iiiiv) (A) acquire or purchase by any other manner any Person or division, business or Equity Interest of any Person or (by merger, consolidation, acquisition of stock B) purchase or acquire any properties or assets or otherwise), directly or indirectly, of any assets, securities, properties, interests or businesses, in each casePerson, other than licenses (1) purchases of Licensed Intellectual Property Rights, inventory, suppliesraw materials, equipment supplies and other similar like items in the ordinary course of business consistent with past practice and (2) capital expenditures in the ordinary course of the Company and the Company Subsidiaries in a manner that is business consistent with past practice, in an amount not to exceed $2,000,000 in the aggregate;
(ivv) transfer, sell, lease lease, license, exchange or swap, mortgage, pledge, allow to lapse or expire, subject to a Lien (other than a Permitted Lien), encumber or otherwise transfersurrender, relinquish or create or incur dispose of any Encumbrance on, any of the Company’s or the Company Subsidiaries’ assets, securitiesproperty or rights, properties, interests or businessesincluding Securities, other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights in the ordinary course of business consistent with past practice;
(vvi) incur, assume, guarantee, prepay, defease, cancel or otherwise become liable for any Indebtedness for borrowed money (directly, contingently or otherwise), except for (A) any new Indebtedness among the Company and any Company Subsidiaries wholly owned by the Company, or among Company Subsidiaries wholly owned by the Company and (B) new Indebtedness incurred pursuant to the Company’s existing credit facility in connection with the payment of obligations or commitments existing as of the date of this Agreement or for permitted capital expenditures referred to in (b)(iv)(B)(2) in an amount not to exceed $8,000,000;
(vii) make any investments in, or capital contributions to, any other Person (excluding any investments in, or capital contributions to, any wholly owned Company Subsidiary by the Company or any wholly owned Company Subsidiary);
(viii) assume, guarantee, endorse or otherwise become liable or responsible for the Indebtedness or other obligations of another Person (other than a guaranty by the Company on behalf of its wholly owned Company Subsidiaries or among the Company’s wholly owned Company Subsidiaries), in each case, (1) in excess of $100,000 individually or $500,000 in the aggregate, and (2) other than in the ordinary course of business consistent with past practice;
(ix) enter into any material joint venture or pursuant to credit facilities material statutory partnership;
(x) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other arrangements Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(including intercompany arrangementsxi) except as required by the Company Benefit Plans as in existence effect as of the date of this Agreement, incur any amount of Indebtedness for borrowed moneythe Transaction Bonus Plan or as otherwise required by applicable Law, guarantee any Indebtedness of a third party, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assets, or create or suffer any material Encumbrance thereupon;
(vi) except (A) as set forth in Section 5.1(vi) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reportsgrant any new compensation or benefits, or (B) pursuant increase the compensation or other benefits payable or provided to its current or former directors, officers, consultants or employees or trigger the forgiveness of Indebtedness owed by any mandatory payments (including cash sweep arrangements) under any credit facilities such individuals, except in existence on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course of businessbusiness and consistent with past practice, settle or offer or propose provided that any increase in compensation payable to settlean executive officer shall not exceed three percent (3%) of such executive officer’s current compensation, (IB) adopt any material litigationnew employee benefit plans, investigationprograms, arbitrationpolicies, proceeding agreements or arrangements or enter into any employment, consulting, change of control, severance, termination or retention agreement or arrangement with any Person (except (1) for employment agreements terminable on less than 30 days’ notice without penalty in the ordinary course of business consistent with past practice or, with respect to employees outside the U.S., otherwise in accordance with the past practice of foreign Company Subsidiaries or (2) in connection with new hires (other claim involving than officers) in the ordinary course of business consistent with past practice) or against (C) except as permitted in clause (B) above, establish, adopt, enter into or amend any collective bargaining agreement, plan, trust, fund, policy or arrangement for the Company benefit of any of its current or any Company Subsidiaryformer directors, (II) any stockholder litigation officers, consultants or claim in writing against the Company employees or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the Transactiontheir beneficiaries;
(viixii) change any of the accounting principles or practices used by it except as may be required by GAAP;
(viii) except for agreements existing pursuant to the terms of a Company Benefit Plan as in effect as of the date of this Agreement, enter into the Transaction Bonus Plan or as otherwise required by applicable Law, (A) pay or arrange for payment of any pension, retirement allowance or other equity or equity-related award or employee benefit pursuant to any existing plan, program, policy, agreement or engage in arrangement to any transaction with one of its current or more former officer, director, employee, consultant or Affiliate or pay or make any arrangement for payment to any of the Company’s its current or former officers, directors, officers employees, consultants or stockholdersAffiliates of any amount relating to unused vacation days, except payments and accruals made in the ordinary course of business consistent with past practice; (B) adopt or pay, grant, issue or accelerate 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, other equity or equity-related, group or other insurance, severance or termination pay, change in control, pension, retirement, savings, welfare, perquisite, fringe benefit or other employee benefit plan, program, policy, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any corporation, partnership (general or limited), limited liability company, association or other organization of which one or more of the Company’s its directors, officers officers, consultants or stockholders is (x) a directoremployees, officer, manager, managing partner, managing member (whether past or the holder of any office with similar authority), (y) has a direct or indirect financial interestpresent, or (zC) directly amend in any material respect any Company Benefit Plan, including any such existing plan, program, policy, agreement or indirectly controls, is controlled by or is under common control witharrangement;
(ixxiii) except as required by Law (A) pay, discharge, settle or satisfy any contractual commitment claims, liabilities or Employee Program in existence on obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the date hereofpayment, and except for increases discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice, increase (B) cancel any material Indebtedness due to it or (C) waive, release or assign any claims or rights of material value other than in the compensation, bonus or other benefits ordinary course of any director, officer or senior employeebusiness consistent with past practice;
(xxiv) compromise, settle or agree to settle any action, suit, claim, litigation, investigation or other proceeding (whether or not commenced prior to the date of this Agreement) for more than $150,000;
(xv) (A) grant make, revoke or amend any material election relating to Taxes, (B) settle or compromise any directormaterial proceeding relating to Taxes, officer (C) enter into a written and legally binding agreement with a Taxing Authority relating to material Taxes, (D) file any material amended Tax Return, (E) seek or employee obtain any material Tax ruling, (F) fail to file any Tax Return when due, (G) waive or extend the right statute of limitations in respect of Taxes (other than extensions of time to receive any new severancefile Tax Returns) or (H) except as required by Law, change any of control its methods, policies or termination pay practices of reporting income or termination benefitsdeductions for U.S. federal income tax purposes;
(xvi) (A) modify, amend, extend or terminate, or grant waive, release, or assign any increase in rights or claims under any existing severance, change of control Company Material Contract or termination pay or termination benefits to any officer, director or employee, (B) enter into any employmentnew agreement that would have been considered a Company Material Contract if it were entered into at or prior to the date hereof, deferred compensation or other similar agreement (or amend any such existing agreement), or (C) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreementin either case in the ordinary course of business and consistent with past practice;
(xixvii) change financial accounting policies or procedures or any of its accounting methods, except to the extent for any such change required to comply with its obligations hereunder by a change in GAAP or with by applicable Law, amend or change its certificate system of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiaryinternal accounting controls;
(xiixviii) adopt terminate or cancel, or amend or modify in any material respect, any material insurance policies maintained by it covering the Company or any Company Subsidiary or their respective properties which is not replaced by a comparable amount of insurance coverage;
(xix) adopt, enter into or implement a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a liquidation, dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger)reorganization;
(xiiixx) (A) enter into any Contract that would constitute a Material Contract if it had been entered into except as necessary in the ordinary conduct of the date business consistent with past practice, transfer, obtain, abandon, allow to lapse, or otherwise dispose of this Agreement any rights to, or (B) amendgrant or agree to grant any license or non-assertion under, modify in any material respect Intellectual Property, or terminate disclose or agree to disclose any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits trade secrets of the Company or any Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent to any Person other than Parent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing in the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (II) entering into any client or customer Contracts in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required)its Representatives;
(xivxxi) enter into take or permit any new line action that would result in any of businessthe conditions to the Merger set forth in ARTICLE VI not being satisfied;
(xvxxii) enter into effectuate a “plant closing” or “mass layoff,” as those terms are defined in WARN;
(xxiii) create any Contract to Subsidiary;
(xxiv) except as contemplated by this Agreement, amend the Rights Agreement, redeem the Rights or take any action with respect to, or make a capital expenditure or to purchase a capital assetany determination under, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth in the budget related to such expenditures provided to Parent prior to the date of this Rights Agreement;
(xvixxv) enter into an agreement fail to take enforce or grant (other than to Parent or any of its Affiliates or Representatives) any waiver or release under any standstill or similar agreement; or
(xxvi) authorize, resolve, agree, commit or propose to do any of the foregoing actionsforegoing.
Appears in 2 contracts
Samples: Rights Agreement (K Tron International Inc), Merger Agreement (K Tron International Inc)
Conduct of Business by the Company. During the period from From the date hereof until the earlier of the Effective Time or the termination of this Agreement to the Effective Time, except as otherwise contemplated by this Agreement or unless Parent shall otherwise consent in advance in writingAgreement, the Company shall, and shall cause each Subsidiary of the Company Subsidiaries to, carry on their respective businesses except as otherwise expressly permitted by this Agreement, as set forth in Section 6.1 of the Company Disclosure Letter or as required by Law, or to the extent Parent shall otherwise consent in writing prior thereto, conduct its business in the usual, regular and ordinary course, course consistent with past practice or its current expense budgets as disclosed (including with respect to Parent, receivables collection and payables payment policies and practices) and, to the extent substantially consistent therewithwith and not in violation of any other provisions of this Section 6.1, the Company shall (and shall cause each Subsidiary of the Company to) use their its commercially reasonable efforts to:
to (ai) Preserve preserve substantially intact their its present business organizations,
organization, (bii) Maintain maintain in effect all of their foreignCompany Permits, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(ciii) Keep keep available the services of their directors, its officers and key employees, and
employees and (div) Subject subject to the right of contract parties to exercise applicable rights, maintain satisfactory relationships with their its customers, clients, lenders, suppliers, vendors suppliers and others having material business relationships with themit. In addition, from the date hereof until the earlier of the Effective Time or the termination of this Agreement, the Company will provide Parent with reasonable updates regarding material communications with its customers regarding contract status, renewals and terminations unless such communication would violate applicable Law or an existing confidentiality provision in any written agreement between the Company and such customer. Without limiting the generality of the foregoing, neither from the Company nor any of date hereof until the Company Subsidiaries will (Effective Time, except as otherwise expressly permitted or contemplated by this Agreement, as set forth in Section 5.1 6.1 of the Company Disclosure Schedule Letter or to the extent that Parent shall otherwise consent in writing prior thereto, the Company shall not, nor shall it permit any Subsidiary of the Company to:
(it being understood that Parent shall respond within five Business Days a) amend or propose to the Company’s communications soliciting such consent from Parentamend its Articles, such consent not be unreasonably withheldbylaws or other similar organizational documents, conditioned or delayed)):adopt a “shareholder rights plan” or similar plan;
(b) (i) (A) split, combine combine, reclassify or reclassify subdivide any shares of its capital stockstock or other equity securities or ownership interests, (Bii) declare, set aside or pay any dividend or other distribution (whether in cash, stock, stock or property or any combination thereof) in respect of any shares of its capital stock, and except for dividends or distributions declared, set aside or paid by any or (to the extent required by Law) to a direct or indirect wholly-owned Subsidiary of the Company Subsidiary to the Company or to any another direct or indirect wholly-owned Subsidiary of the Company Subsidiary that is, directly or indirectly, wholly owned by the Company, or (Ciii) redeem, repurchase or otherwise acquire or offer to redeem, repurchase repurchase, or otherwise acquire any shares of capital stock or other equity securities or ownership interests of the Company Securities or any Subsidiary of the Company Subsidiary Securitiesthat is not wholly owned;
(iic) except for grants and awardsissue, in type and amount consistent with ordinary course past practicesdeliver, under the Company Equity Incentive Plansell, as amendedgrant or cause a Lien to be placed upon any shares of its capital stock or other voting securities or equity interests, in connection with new hires and promotionsany securities convertible or exchangeable into any such shares, authorize for issuancevoting securities or equity interests, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of any options, warrants, commitments, subscriptions, warrants or other rights to purchase acquire any such shares, voting securities, equity interests or otherwise) convertible or exchangeable securities, any stock of any class stock-based performance units, profits interests or any other securities rights that give any Person the right to receive any economic interest of a nature accruing to the holders of the Company Common Stock or equity equivalents (includingany other class of capital stock, without limitation, stock appreciation rights) other than upon the issuance exercise or settlement of the Company Options or Company Warrants outstanding as of the date hereof in accordance with their present term other than (i) the acquisition by the Company of shares of Company Common Stock (A) upon in connection with the surrender of shares of Company Common Stock by holders of Company Options or Company Warrants in order to pay the exercise price of the Company Options or Company Warrants in connection with the exercise of the Company Stock Options outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof or Company Warrants and (Bii) upon the exercise acquisition by the Company of shares of Company Warrants outstanding on Common Stock in the date ordinary course of this Agreement business consistent with past practice in accordance connection with their present terms and the provisions hereoftermination of service of holders (other than executive officers) of Company Options;
(iiid) incur any capital expenditures or any obligations or liabilities in respect thereof, in excess of $50,000 in any calendar quarter or $75,000 in the aggregate;
(e) acquire (by merger, consolidation, share exchange, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, in each case, with a value in excess of $50,000 in the aggregate, other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items in the ordinary course of business of the Company and the Company Subsidiaries Entities in a manner that is consistent with past practice;
(ivf) sell, lease or otherwise transfer, or create or incur any Encumbrance Lien (other than Permitted Liens) on, any of the Company’s or the Company SubsidiariesEntities’ assets, securities, properties, interests or businesses, other than (i) the sale of equipment, inventory, products and or services and in the ordinary course of business consistent with past practice, or (ii) the licensing of Owned Intellectual Property Rights in the ordinary course of business consistent with past practice;
(vg) except in the ordinary course of business or pursuant to credit facilities or other arrangements (including intercompany arrangements) in existence as of the date of this Agreement, incur any amount of Indebtedness for borrowed money, guarantee any Indebtedness of a third party, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assetscontributions to, or create investments in, any other Person, other than (i) loans, advances or suffer any material Encumbrance thereupon;
(vi) except (A) as set forth in Section 5.1(vi) capital contributions to, or investments in, wholly-owned Subsidiaries of the Company Disclosure Scheduleand (ii) advances of travel and other reasonable out-of- pocket expenses to directors, provided that such settlement does not exceed the amounts accrued therefor officers and employees in the most recent balance sheet of the Company set forth in the Company SEC Reports, or (B) pursuant to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the Transactionbusiness consistent with past practice;
(viih) change create, incur, assume or otherwise be liable with respect to any Indebtedness for borrowed money or guarantees thereof having an aggregate principal amount outstanding at any time greater than $100,000 in the aggregate (together with all other Indebtedness for borrowed money of the Company Entities) or (ii) amend, modify or refinance any of the accounting principles or practices used by it except as required by GAAPforegoing, if any;
(viiii) except for agreements existing as of the date of this Agreemententer into, enter into any agreement renew, amend or engage modify in any transaction with one material respect or more terminate any Material Contract or otherwise waive, release or assign any material rights, claims or benefits of any Company Entity thereunder; provided, however, that the Company’s directors, officers foregoing shall not prevent or stockholders, or with preclude 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 stockholders is Company Entity from (x) a director, officer, manager, managing partner, managing member (negotiating and/or renewing in the ordinary course of business consistent with past practice any business Contracts which expire upon their terms or the holder of any office with similar authority), (y) has a direct entering into any client or indirect financial interestcustomer, supplier or (z) directly Financial Advisor contracts or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases agreements in the ordinary course of business consistent with past practice, increase regardless of whether or not any such contract or agreement would constitute a Material Contract if it had been entered into as of the compensation, bonus or other benefits of any director, officer or senior employeedate hereof;
(xj) except to the extent required to comply with Law or as required to comply with any Employee Benefit Plan, (Ai) grant to any director, officer or employee the right to receive any new severance, retention, change in control, retirement or termination arrangement (or increase or otherwise amend any existing severance, retention, change in control, retirement or termination arrangement) other than providing standard severance or termination rights in connection with new hires, in the ordinary course of business consistent with past practice and so long any such payments are not payable upon, do not increase as a result of, and are otherwise unrelated to, a change of control or termination pay or termination benefitssimilar transaction, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employeeincluding the transactions contemplated by this Agreement, (Bii) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement)) other than in connection with new hires or promotions below the level of officer in the ordinary course of business consistent with past practice, or (Ciii) establish, adopt or amend (except as required by applicable lawLaw) any Employee Benefit Plan, collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreementarrangement, (iv) increase any compensation, bonus or other benefits payable to any director, officer, independent contractor or employee with an annual base salary in excess of $75,000 of any Company Entity, except for regularly scheduled increases to current employees made in the ordinary course of business consistent with past practice or pursuant to an employment agreement or arrangement in existence on the date hereof, or (v) modify or otherwise alter the payroll practices or policies of any Company Entity;
(xik) make any material change in the Company’s fiscal year or methods of accounting, except to as required by concurrent changes in GAAP, in Regulation S-X of the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylaws1934 Act, or Law and agreed to by the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company SubsidiaryCompany’s independent public accounting firm;
(xiil) commence or offer, propose, agree to or otherwise settle, pay, discharge, satisfy or waive (i) any material litigation, investigation, arbitration, proceeding or other claim involving or against any Company Entity (or its properties or assets), including related to Taxes, (ii) any shareholder litigation, claim or dispute against the any Company Entity (or its properties or assets) or any of their officers or directors or (iii) any litigation, arbitration, proceeding or dispute that relates to the transactions contemplated hereby in each case, with respect to clauses (i), (ii) and (iii), if such settlement would, in any single case, result in damages, fines or other penalties payable to or by the Company Entities in excess of $100,000 and other than as provided by Section 6.6(e);
(m) permit the lapse of, or engage in any action that constitutes a violation of, any Company Permit;
(n) enter into any joint venture, partnership or similar arrangement or enter into any collective bargaining agreement or other agreement with a labor union or works council;
(o) implement any action which constitutes a “mass layoff” under the WARN Act;
(p) enter into a new line of business;
(q) make, change or rescind any material election 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 as required by Law;
(r) fail to maintain in full force and effect material insurance policies covering the Company Entities and their respective properties, assets and businesses in a form and amount consistent with past practice;
(s) adopt a or enter into any plan or agreement of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any Company Entity (other than the Mergertransactions contemplated by this Agreement);
(xiiit) (A) engage in any transaction with, or enter into any Contract that would constitute a Material Contract if it had been entered into agreement, arrangement, or understanding with, directly or indirectly, any “related party” (as such term is defined in Item 404 of Regulation S-K promulgated under the 1000 Xxx) or any of the Company’s Affiliates other than wholly-owned Subsidiaries of the Company or pursuant to agreements in force on the date of this Agreement or as set forth in the Company Disclosure Letter;
(Bu) amend, modify take any action that would result in any a material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits diminution of the Company or any Company Subsidiary thereunder; provided, however, that the foregoing shall net capital of Securities Corp not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing in the ordinary course of business consistent or a failure to comply with past practice any Material Contracts that are scheduled the Minimum Net Capital Requirements then applicable to expire upon their terms or (II) entering into any client or customer Contracts in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required)Securities Corp;
(xivv) fail to duly and timely file all material reports and other material documents required to be filed with FINRA, the SEC or any other Governmental Authority, subject to extensions permitted by Law or applicable rules and regulations; or
(w) authorize, commit, propose or agree to do or take, or enter into any new line of business;
(xv) enter into any Contract Contract, agreement, commitment or arrangement to make a capital expenditure do or to purchase a capital assettake, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth in the budget related to such expenditures provided to Parent prior to the date of this Agreement;
(xvi) enter into an agreement to take any of the foregoing actionsforegoing.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Summit Financial Services Group Inc), Merger Agreement (Summit Financial Services Group Inc)
Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, except as otherwise contemplated expressly required in Section 5.01(a) of the Company Disclosure Letter, as required by Law or judgment, or as consented to in writing in advance by Parent (which consent shall not be unreasonably withheld, delayed or conditioned) or as otherwise expressly permitted or required by this Agreement or unless Parent shall otherwise consent in advance in writingAgreement, the Company shall, and shall cause each of the Company its Subsidiaries to, carry on their respective businesses its business in the usual, regular and ordinary course, course consistent with past practice or its current expense budgets as disclosed to Parent, and, prior to the extent substantially consistent therewith, Merger Closing and use their commercially reasonable efforts to:
(a) Preserve to preserve intact the Company and its Subsidiaries current business organization, preserve their present business organizations,
(b) Maintain assets and properties in effect all of their foreigngood repair and condition, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep keep available the services of their directorsits current officers, officers employees and key employees, and
(d) Subject to the right of contract parties to exercise applicable rights, consultants and maintain satisfactory its existing relationships with their customers, clients, lenders, suppliers, vendors and licensors, licensees, distributors, others having material business relationships dealings with themit and Governmental Entities having regulatory dealings with it. Without In addition to and without limiting the generality of the foregoing, neither during the Company nor any period from the date of this Agreement to the Company Subsidiaries will (Effective Time, except as expressly permitted or contemplated by this Agreement, as otherwise set forth in Section 5.1 5.01(a) of the Company Disclosure Schedule Letter or as otherwise required by applicable Law or expressly permitted or required pursuant to this Agreement, the extent that Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, do any of the following without the prior written consent of Parent (which consent shall otherwise consent in writing (it being understood that Parent shall respond within five Business Days to the Company’s communications soliciting such consent from Parent, such consent not be unreasonably withheld, conditioned delayed or delayed)conditioned):
(i) (A) split, combine or reclassify any shares of its capital stock, (Bx) declare, set aside or pay any dividend or other distribution (whether in cash, stockdividends on, or property make any other distributions in respect of, any of its capital stock or any combination thereof) in respect of any shares of capital stockother Company Security, and other than dividends or distributions declared, set aside by a direct or paid by any Company indirect wholly owned Subsidiary to of the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned by the Companyits parent, or (Cy) redeemsplit, repurchase combine or otherwise acquire reclassify any of its capital stock or offer to redeemissue or authorize the issuance of any Company Securities or other securities in respect of, repurchase in lieu of or in substitution for shares of its capital stock;
(ii) purchase, redeem or otherwise acquire any Company Securities or any other securities of the Company or any Subsidiary Securitiesof the Company or any rights, warrants or options to acquire any such securities (except pursuant to forfeitures of Company Stock Options occurring in the ordinary course of business consistent with past practice);
(iiiii) except for grants and awardsissue, in type and amount consistent with ordinary course past practicesdeliver, under the Company Equity Incentive Plansell, as amended, in connection with new hires and promotions, authorize for issuance, issue pledge or sell or agree or commit to issue or sell grant (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwiseA) any shares of its capital stock of or other Company Securities, (B) any class other voting securities or any other securities convertible into or exercisable for, or any calls or rights, warrants or options to acquire, any such shares, voting securities or equity equivalents (includingconvertible securities, without limitationor exchangeable securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights) rights or stock based performance units (other than (1) the issuance of shares of Company Common Stock (A) upon the exercise of Company Stock Options vesting or settlement of Company DSUs, in each case outstanding on the date hereof and in accordance with their terms on the date hereof and; (2) Liens required to be granted on shares or interests in Subsidiaries pursuant to the Credit Agreement and as in effect on the date of this Agreement in accordance with their present terms and the provisions hereof and (B) upon the exercise of Company Warrants outstanding on the date of this Agreement in accordance with their present terms and the provisions hereofAgreement;
(iiiiv) amend or fail to comply with the Company Certificate or the Company Bylaws or other comparable charter or organizational documents of any of the Company’s Subsidiaries;
(v) directly or indirectly acquire or agree to acquire (x) by mergermerging or consolidating with, consolidationby purchasing all or a substantial portion of the assets of, acquisition by making an investment in or capital contribution to, or by any other manner, any person or division, business or equity interest of stock any person or assets or otherwise), directly or indirectly, (y) any assets, securitiesrights or properties except for (1) capital expenditures, which shall be subject to the limitations of clause (viii) below, and (2) acquisitions, investments or capital contributions (including any series of acquisitions, investments or capital contributions) not exceeding $1,000,000 in the aggregate;
(vi) except for transactions among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, sell, pledge, dispose of, transfer, assign, abandon, lease, license or otherwise encumber, or subject to any Lien (other than Permitted Liens) or otherwise dispose of any material portion of its properties, interests rights or businessesassets, in each caseof the Company or any of its Subsidiaries, other than except (1) sales, pledges, dispositions, transfers, leases, licenses of Licensed Intellectual Property Rightsor encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that have been disclosed to Parent, inventory, supplies, equipment and other similar items or non-material leases or licenses in the ordinary course of business of the Company and the Company Subsidiaries in a manner that is consistent with past practice, and (2) sales, pledges, dispositions, transfers, leases, licenses or encumbrances of assets or properties of the Company or any of its Subsidiaries having a value not to exceed in the aggregate $250,000;
(ivvii) sell(A) repurchase, lease prepay, cancel, incur or otherwise transfermodify in any material respect the terms of, any indebtedness or create guarantee for any such indebtedness of another person, (B) issue or incur sell any Encumbrance ondebt securities or calls, options or warrants or other rights to acquire any debt securities of the Company or any Subsidiary of the Company, 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, except in the case of (A) or (B), for (1) advances of credit incurred under the Company’s or existing credit facilities in the ordinary course of business consistent with past practice to finance working capital needs not to exceed in the aggregate the amounts in fiscal year 2011, (2) short-term borrowings incurred in the ordinary course of business consistent with past practice to finance working capital needs not to exceed in the aggregate the amounts outstanding in fiscal year 2011, and (3) indebtedness solely involving the Company Subsidiaries’ assetsand any of its direct or indirect wholly owned subsidiaries, securitiesor (C) make any loans, propertiesadvances or capital contributions to, interests or businessesinvestments in, any other person, other than (w) to any direct or indirect wholly owned subsidiary of the sale Company, (x) advances to employees in respect of equipmenttravel or other related ordinary expenses in the ordinary course of business, products consistent with past practice in an aggregate amount not to exceed $50,000 and services (y) advances of expenses to officers and directors as permitted by the licensing of Owned Intellectual Property Rights Company Bylaws and any indemnification agreements to which the Company is a party and (z) investments in marketable securities and other cash management activities in the ordinary course of business consistent with past practice;
(vviii) except make or agree to make any new capital expenditure or in connection therewith, that in the ordinary course of business or pursuant to credit facilities or other arrangements (including intercompany arrangements) aggregate are in existence as excess of the date of this Agreement, incur any aggregate amount of Indebtedness for borrowed money, guarantee any Indebtedness of a third party, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assets, or create or suffer any material Encumbrance thereupon;
(vi) except (A) as set forth in Section 5.1(vi5.01(a)(viii) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, or (B) pursuant to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the Transaction;
(vii) change any of the accounting principles or practices used by it except as required by GAAP;
(viii) except for agreements existing as of the date of this Agreement, enter into any agreement or engage in any transaction with one or more of the Company’s directors, officers or stockholders, 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;Letter.
(ix) except as required by applicable Law or any contractual commitment judgment by a court of competent jurisdiction, (x) pay, discharge, settle or Employee Program satisfy any material claims, liabilities, obligations or Actions (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in existence on the date hereof, and ordinary course of business consistent with past practice or in accordance with their terms or (y) waive or assign any claims or rights of material value except for increases in the ordinary course of business consistent with past practice, increase the compensation, bonus or other benefits of any director, officer or senior employee;
(x) (A) grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase other than as expressly permitted in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (B) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreementSection 5.01(a), or (C) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreement;
(xi) except to the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary;
(xii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger);
(xiii) (A) enter into into, materially modify, terminate, cancel or fail to renew any Contract that is or would constitute be a Material Contract if it had been entered into as of the date of this Agreement Contract, or (B) amend, modify in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights or claims thereunder, or (B) enter into, modify, amend or terminate any Contract or waive, release or assign any material rights or claims thereunder, which if so entered into, modified, amended, terminated, waived, released or assigned would reasonably be expected to (x) prevent or materially delay or impair the consummation of the Offer, the Merger and the other transactions contemplated by this Agreement, or (y) result in or reasonably be expected to result in a Material Adverse Effect;
(xi) except as required pursuant to Company Benefit Plans set forth on Section 4.01(o)(i) of the Company Disclosure Letter, (A) adopt, enter into, terminate or amend any Company Benefit 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), (B) grant, pay, or promise to pay any severance or termination pay or any increase in severance or termination pay, or increase or promise to increase the compensation or fringe benefits payable to any Company Personnel, (C) loan or advance any money or other property to any Company Personnel, (D) grant, pay or accelerate the payment of any equity or equity-based awards or any incentive compensation awards, (E) remove any existing restrictions in any Company Benefit Plans or awards made thereunder, (F) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan or make any discretionary contributions or payments with respect to any Company Benefit Plan to any trust or other funding vehicle, (G) take any action to accelerate the vesting, funding or payment of any compensation or benefit under any Company Benefit Plan or awards made thereunder, or (H) materially change any actuarial or other assumption used to calculate funding obligations with respect to any Company Benefit Plan or change the manner in which contributions to any Company Benefit Plan are made or the basis on which such contributions are determined;
(xii) establish, adopt, enter into, or amend, in any manner that materially increases Company costs or any labor organization’s organizational rights, claims any collective bargaining agreement or benefits other labor Contract to which the Company or any of its Subsidiaries is bound;
(xiii) except as required by GAAP and as advised by the Company’s regular independent public accountant, revalue any material assets or liabilities of the Company or any Company Subsidiary thereunder; providedof its Subsidiaries or make any change in accounting methods, however, that the foregoing shall not prevent principles or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing in the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (II) entering into any client or customer Contracts in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required)practices;
(xiv) enter into any new line of business;
(xv) enter into any Contract to make a capital expenditure or to purchase a capital asset, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth in the budget related to such expenditures provided to Parent prior to the date of this Agreement;
(xvi) enter into an agreement to take any of the foregoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Bed Bath & Beyond Inc), Merger Agreement (Cost Plus Inc/Ca/)
Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, except with the prior written consent of Parent (which shall not be unreasonably delayed) or as otherwise specifically contemplated by this Agreement or unless Parent shall otherwise consent as set forth in advance in writingSection 4.01(a) of the Company Letter, the Company shall, and shall cause each of the Company its Subsidiaries to, carry on their respective businesses in the usual, regular and ordinary course, course consistent with past practice or its current expense budgets as disclosed and use commercially reasonable efforts to Parent, comply with all applicable Laws and, to the extent substantially consistent therewith, use their commercially reasonable efforts to:
(a) Preserve intact their present business organizations,
(b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep to keep available the services of their directorspresent officers, officers software developers and key other employees, and
(d) Subject to the right of contract parties to exercise applicable rightspreserve their assets and technology, maintain satisfactory their relationships with their customers, clients, lenders, suppliers, vendors licensors, licensees, distributors and others having material business relationships dealings with themthem and to maintain their franchises, rights and Permits. Without in any way limiting the generality of the foregoing, neither during the Company nor any period from the date of this Agreement to the Company Subsidiaries will Effective Time, except with the prior written consent of Parent (except which shall not be unreasonably delayed) or as expressly permitted or specifically contemplated by this Agreement, Agreement or as set forth in Section 5.1 4.01(a) of the Company Disclosure Schedule or Letter (with specific reference to the extent that Parent subsection of this Section 4.01 to which the information stated in such disclosure relates), the Company shall otherwise consent in writing (it being understood that Parent not, and shall respond within five Business Days to the Company’s communications soliciting such consent from Parent, such consent not be unreasonably withheld, conditioned or delayed)):permit any of its Subsidiaries to:
(i) (A) split, combine or reclassify any shares of its capital stock, (B) declare, set aside or pay any dividend dividends on, or make any other distribution distributions (whether in cash, stock, stock or property or any combination thereofproperty) in respect of, any of its capital stock or other equity or voting interests, except for dividends by a direct or indirect wholly owned Subsidiary of the Company to its parent, (B) split, combine or reclassify any of its capital 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, shares of its capital stock or other equity or voting interests, (C) purchase, redeem or otherwise acquire any shares of capital stock, and dividends other equity or distributions declared, set aside voting interests or paid by any Company Subsidiary to other securities of the Company or any of its Subsidiaries or any options, warrants, calls or rights to acquire any Company Subsidiary that issuch shares or other securities (including any Stock Options or RSUs, directly except pursuant to the forfeiture conditions of such Stock Options or indirectlyRSUs or the cashless exercise or tax withholding provisions of such Stock Options or RSUs, wholly owned in each case only if and to the extent required by the Company, terms of such awards as in effect on the date of this Agreement) or (CD) redeemtake any action that would result in any amendment, repurchase modification or otherwise acquire or offer to redeem, repurchase or otherwise acquire change of any term of any indebtedness of the Company Securities or any Company Subsidiary Securitiesof its Subsidiaries;
(ii) except for grants and awardsissue, in type and amount consistent with ordinary course past practicesdeliver, under the Company sell, pledge or otherwise encumber any (A) shares of its capital stock, other equity or voting interests or Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit to issue or sell Equivalents (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or equity equivalents (including, without limitation, stock appreciation rights) other than the issuance of shares of Company Common Stock (A) upon the exercise of Stock Options or rights under the ESPP and the settlement of RSUs, in each case outstanding as of the date of this Agreement and only if and to the extent required by the terms of the Company Stock Options outstanding Plans as in effect on the date of this Agreement in accordance with their present terms and the provisions hereof and Agreement), or (B) upon the exercise of Company Warrants outstanding on the date of this Agreement in accordance with their present terms and the provisions hereofsecurities convertible into, or exchangeable or exercisable for, or any options, warrants, calls or rights to acquire, any such stock, interests or Equity Equivalents;
(iii) acquire amend or propose to amend its certificate of incorporation or bylaws (by merger, consolidation, acquisition of stock or assets or otherwisesimilar organizational documents), directly or indirectly, any assets, securities, properties, interests or businesses, in each case, other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items in the ordinary course of business of the Company and the Company Subsidiaries in a manner that is consistent with past practice;
(iv) sell, lease acquire or otherwise transferagree to acquire (A) by merging or consolidating with, or create by purchasing all or incur a substantial portion of the assets of, or by purchasing all or a substantial equity or voting interest in, or by any Encumbrance onother manner, any of the Company’s business or the Company Subsidiaries’ assets, securities, properties, interests person or businesses, division thereof or (B) any other assets other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights immaterial assets acquired in the ordinary course of business consistent with past practice;
(v) except in the ordinary course of business or pursuant to credit facilities or other arrangements (including intercompany arrangements) in existence as of the date of this Agreementsell, incur any amount of Indebtedness for borrowed moneylease, guarantee any Indebtedness of a third partylicense, issue or sell debt securitiesand lease back, make any loans, advances or capital contributions, mortgage, pledge mortgage or otherwise encumber any material assets, or create or suffer any material Encumbrance thereupon;
(vi) except (A) as set forth in Section 5.1(vi) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, or (B) pursuant subject to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof Lien or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course otherwise dispose of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers material properties or directors assets (including any shares of capital stock, equity or (III) any litigationvoting interests or other rights, arbitrationinstruments or securities), proceeding or dispute that relates to the Transaction;
(vii) change any of the accounting principles or practices used by it except as required by GAAP;
(viii) except for agreements existing as (i) grants of the date of this Agreement, enter into any agreement or engage in any transaction with one or more of the Company’s directors, officers or stockholders, 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases nonexclusive licenses in the ordinary course of business consistent with past practice, increase the compensation, bonus (ii) sales of inventory or other benefits of any director, officer or senior employee;
(x) (A) grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (B) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), or (C) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreement;
(xi) except to the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary;
(xii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger);
(xiii) (A) enter into any Contract that would constitute a Material Contract if it had been entered into as of the date of this Agreement or (B) amend, modify in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing used equipment in the ordinary course of business consistent with past practice and (iii) Permitted Liens incurred in the ordinary course of business consistent with past practice;
(vi) (A) repurchase, prepay or incur any Material Contracts indebtedness, including by way of a guarantee or an issuance or sale of debt securities, or issue and sell options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, enter into any “keep well” or other 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 (B) make any loans, advances or capital contributions to, or investments in, any other person, other than the Company or any direct or indirect wholly owned Subsidiary of the Company;
(vii) incur or commit to incur any capital expenditures, or any obligations or liabilities in connection therewith, that individually are scheduled in excess of $375,000 or in the aggregate are in excess of $750,000;
(viii) (A) pay, discharge, settle or satisfy any claims (including any claims of stockholders and any stockholder litigation relating to expire upon this Agreement, the Merger or any other 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 on the date of this Agreement, of claims, liabilities or obligations reserved against in the Baseline Financials (II) entering into any client or customer Contracts for amounts not in excess of such reserves), incurred since the date of such financial statements in the ordinary course of business consistent with past practice or incurred in connection with the transactions contemplated in this Agreement, 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 Closing 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 or by which the Company or any of its Subsidiaries is a party or bound;
(ix) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), or modify or amend in any material respect, or exercise any right to renew, any lease or sublease of real property or acquire any interest in real property;
(x) modify or amend in any material respect, or accelerate, terminate or cancel, any material Contract or waive any right to enforce, relinquish, release, transfer or assign any rights or claims thereunder, other than any immaterial modifications or amendments made in the ordinary course of business consistent with past practice;
(xi) except as required to ensure that any Benefit Plan or Benefit Agreement as in effect on the date of this Agreement is not then out of compliance with applicable Law or as specifically required pursuant to this Agreement, (A) adopt, establish, enter into, terminate, amend or modify any Benefit Plan or Benefit Agreement, (B) increase in any manner the compensation or benefits of, or pay any bonus or award to, or grant any loan to, any Company Personnel, (C) pay or provide to any Company Personnel any compensation or benefit not provided for those described under a Benefit Plan or Benefit Agreement as in Sections 3.18(a)(xieffect on the date of this Agreement, other than the payment of base compensation in the ordinary course of business consistent with past practice, (D) and grant or amend any award under any Benefit Plan (including the grant or amendment of Stock Options, RSUs, restricted stock, stock appreciation rights, performance units, stock purchase rights or other equity or equity-based compensation) or remove or modify existing restrictions in any Benefit Plan or Benefit Agreement or awards made thereunder, (E) grant or pay any severance, separation, change in control, termination, retention or similar compensation or benefits to, or increase in any manner the severance, separation, change in control, termination, retention or similar compensation or benefits of, any Company Personnel, (F) enter into any trust, annuity or insurance Contract or similar agreement or take any other action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or Benefit Agreement, (G) take any action to accelerate, or that could reasonably be expected to result in the acceleration of, the time of payment or vesting of any rights, compensation, benefits or funding obligations under any Benefit Plan or Benefit Agreement or otherwise or (H) make any material determination under any Benefit Plan or Benefit Agreement that is inconsistent with the ordinary course of business or past practice;
(xii)) form any Subsidiary of the Company;
(xiii) enter into any Contract containing any provisions having the effect of providing that the consummation of the Merger or the other transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, for which Parent’s prior written consent shall be required)result in any violation or breach of, or constitute a default (with or without notice or lapse of time or both) under, such Contract, or give rise under such Contract to any right of, or result in, a termination, right of first refusal, material amendment, revocation, cancellation or material acceleration, or a loss of a material benefit or the creation of any material Lien upon any of the properties or assets of the Company, Parent or any of their respective subsidiaries, or to any increased, guaranteed, accelerated or additional rights or entitlements of any person, except to the extent such conflicts, results, defaults, rights, losses or entitlements are required by applicable Law;
(xiv) enter into any new line Contract containing any restriction on the ability of businessthe 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 following the consummation of the Merger and the other transactions contemplated by this Agreement;
(xv) take any action or fail to take any action if such action or failure to act could reasonably be expected to result in (A) any representation and warranty of the 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;
(xvi) except as required by applicable Law, adopt or enter into any collective bargaining agreement or other labor union Contract applicable to the employees of the Company or any of its Subsidiaries;
(xvii) write-down any of its material assets, including any Intellectual Property, or make any change in any financial or tax accounting principle, method or practice, other than as required by GAAP or applicable Law;
(xviii) make or change any tax election;
(xix) engage in (A) any trade loading practices or any other 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, in each case in this clause (D) in a capital expenditure manner outside the ordinary course of business or inconsistent with past practice;
(xx) take any action or fail to purchase a capital asset, take any action which expenditure action or purchase exceeds the amount or amounts allocated therefor as set forth failure to act would result in the budget related to such expenditures provided to Parent material loss or reduction in value of the Intellectual Property of the Company and its Subsidiaries, taken as a whole;
(xxi) enter into, extend or renew (A) any Contract or amendment thereof which, if executed prior to the date of this Agreement, would have been required to have been disclosed pursuant to Section 3.01(i)(i)(A), (B), (C), (E), (F), (H), (J), (L), (N), (P) or (Q), (B) any Contract or amendment thereof that grants any person the right or ability to access, license or use all or a material portion of the Intellectual Property of the Company and its Subsidiaries, other than in the ordinary course of business consistent with past practice or (C) any Contract providing for the services of any dealer, distributor, sales representative or similar representative; provided, however, that solely for purposes of this clause (C) (and not clause (A) above) the Company may enter into, extend or renew any Contract providing for the services of any dealer, distributor, sales representative or similar representative; provided, that with respect to this clause (C), in each case (x) such entry, extension or renewal is in the ordinary course of business and is not inconsistent with past practice and (y) if the entry, extension or renewal is other than on standard terms and conditions, including any terms and conditions relating to geographic exclusivity, the Company shall have provided Parent with prior written notice of the material terms of the proposed Contract, extension or renewal and not less than 48 hours to comment on such terms;
(xvixxii) enter into an agreement any Contract or material amendment thereof which, if executed prior to the date of this Agreement, would have been disclosed pursuant to Section 3.01(i)(i)(G), (I), or (K), other than any Contract pursuant to which the Company or any of its Subsidiaries has been or is being granted a license to source code in the ordinary course of business of the Company and its Subsidiaries consistent with past practice; or
(xxiii) authorize any of, or commit, resolve or agree to take any of of, the foregoing actions.
Appears in 2 contracts
Samples: Merger Agreement (International Business Machines Corp), Merger Agreement (Unica Corp)
Conduct of Business by the Company. During the period from (a) From and after the date of this Agreement hereof and prior to the Effective TimeTime or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1 (the “Termination Date”), and except (w) as otherwise may be required by applicable Law, (x) with the prior written consent of Parent, (y) as expressly contemplated or permitted by this Agreement or unless Parent shall otherwise consent (z) as disclosed in advance in writingSection 5.1 of the Company Disclosure Letter, the Company shall, and shall cause each of the Company its Subsidiaries to, carry on their respective businesses to (i) conduct its business in the usual, regular and ordinary course, course consistent with past practice practices, (ii) use reasonable best efforts to maintain and preserve intact its business organization to maintain its rights, franchises, licenses and other authorizations issued by Governmental Entities and to retain the services of its key officers and key employees and (iii) take no action which would reasonably be expected to materially impair or materially delay the ability of any of the parties hereto from obtaining any necessary approvals of any regulatory agency or other Governmental Entity required for the transactions contemplated hereby, performing its current expense budgets as disclosed to Parent, and, to covenants and agreements under this Agreement or consummating the extent substantially consistent therewith, use their commercially reasonable efforts to:
(a) Preserve intact their present business organizations,transactions contemplated hereby.
(b) Maintain The Company agrees with Parent, on behalf of itself and its Subsidiaries, that between the date hereof and the Effective Time, except as set forth in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(cSection 5.1(b) Keep available the services of their directors, officers and key employees, and
(d) Subject to the right of contract parties to exercise applicable rights, maintain satisfactory relationships with their customers, clients, lenders, suppliers, vendors and others having material business relationships with them. Without limiting the generality of the foregoing, neither the Company nor any of the Company Subsidiaries will (except as Disclosure Letter or expressly permitted or contemplated by this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule or to shall not, and shall not permit any of its Subsidiaries to, without the extent that Parent shall otherwise prior written consent in writing (it being understood that Parent shall respond within five Business Days to the Company’s communications soliciting such consent from of Parent, such consent not be unreasonably withheld, conditioned or delayed))::
(i) (A) adjust, split, combine or reclassify any shares capital stock or otherwise amend the terms of its capital stock, (B) declare, set aside or pay any dividend stock or other distribution (whether in cash, stock, or property or any combination thereof) in respect of any shares of capital stock, and dividends or distributions declared, set aside or paid by any Company Subsidiary to the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned by the Company, or (C) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Company Securities or any Company Subsidiary Securitiesequity interests;
(ii) make, declare or pay any dividend, or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire or encumber, any shares of its capital stock or other equity interests or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock or other equity interests, except for grants in connection with cashless exercises or similar transactions pursuant to the exercise of stock options issued and awards, in type and amount consistent with ordinary course past practices, outstanding as of the date hereof under the Company Equity Incentive Stock Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or equity equivalents (including, without limitation, stock appreciation rights) other than the issuance of shares of Company Common Stock (A) upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof and (B) upon the exercise of Company Warrants outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof;
(iii) grant any person any right to acquire any shares of its capital stock or other equity interests;
(iv) issue any additional shares of capital stock or other equity interests except pursuant to the exercise of stock options issued under the Company Stock Plans issued and outstanding as of the date hereof and listed on Section 3.2(a) of the Company Disclosure Letter and in accordance with the terms of such instruments;
(v) purchase, sell, transfer, mortgage, encumber or otherwise dispose of any properties or assets having a value in excess of $5 million in the aggregate;
(vi) make any investment or acquisition of another person or business, whether by merger, consolidation, acquisition purchase of stock or securities, contributions to capital, property transfers, or purchases of property or assets in excess of $5 million in the aggregate;
(vii) make any capital expenditures not contemplated by the capital expenditure budget having an aggregate value in excess of $5 million for any 12 consecutive month period;
(viii) incur, assume, guarantee, or otherwisebecome obligated with respect to, any debt, which, when taken together with all other debt of the Company and its Subsidiaries, would result in there being indebtedness of the Company and its Subsidiaries greater than $180 million in the aggregate outstanding at any given time (excluding intercompany debt), directly or indirectlyany debt which contains covenants that restrict the Merger or that are inconsistent with the Financing Commitments;
(ix) enter into, renew, extend, amend or terminate (A) any assets, securities, properties, interests Company Material Contract or businessesContract which if entered into prior to the date hereof would be a Company Material Contract, in each case, other than licenses any Contract relating to indebtedness that would not be prohibited under clause (viii) of Licensed Intellectual Property Rightsthis Section 5.1(b), inventory, supplies, equipment and other similar items or (B) any Contracts not in the ordinary course course, involving the commitment or transfer of business value in excess of $5 million in the Company and the Company Subsidiaries aggregate in a manner that is consistent with past practiceany year;
(ivx) sellenter into, lease amend or otherwise transferterminate any material reinsurance, coinsurance, modified coinsurance or create any similar Contract (including any surplus relief or incur any Encumbrance onfinancial reinsurance Contract), any of the Company’s whether as reinsurer or the Company Subsidiaries’ assets, securities, properties, interests or businesses, other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights in the ordinary course of business consistent with past practicereinsured;
(vxi) except in to the ordinary course of business extent required by Law or pursuant to credit facilities or other arrangements (including intercompany arrangements) by Contracts in existence as of the date hereof (complete copies of this Agreementwhich have been provided or made available to Parent prior to the date hereof), incur any amount of Indebtedness for borrowed money, guarantee any Indebtedness of a third party, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assets, or create or suffer any material Encumbrance thereupon;
(vi) except (A) as set forth increase in Section 5.1(vi) any manner the compensation or benefits of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, or (B) pursuant to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers or directors or (III) any litigationemployees, arbitration, proceeding or dispute that relates to the Transaction;
(vii) change any of the accounting principles or practices used by it except as required by GAAP;
(viii) except for agreements existing as of the date of this Agreement, enter into any agreement or engage in any transaction with one or more of the Company’s directors, officers consultants, independent contractors or stockholdersservice providers, or except, with any corporationrespect to non-officer employees, partnership (general or limited), limited liability company, association or other organization of which one or more of the Company’s directors, officers or stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases in the ordinary course of business consistent with past practice, increase the compensation, bonus or other benefits of any director, officer or senior employee;
(x) (A) grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (B) enter into pay any employmentpension, deferred compensation severance or other similar retirement benefits not required by any existing plan or agreement (or amend to any such existing agreement)employees, directors, consultants, independent contractors or service providers, (C) establishexcept to comply with Sections 2.3 or 5.12, adopt enter into, amend, alter, adopt, implement or amend (except as required by applicable law) otherwise commit itself to any collective bargainingcompensation or benefit plan, bonusprogram, policy, arrangement or agreement including any pension, retirement, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock bonus or other employee benefit plan or agreement;
welfare benefit plan, policy, arrangement or agreement or employment or consulting agreement with or for the benefit of any employee, director, consultant, independent contractor or service provider, (xiD) cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, or (E) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except to the extent as may be required to comply with its obligations hereunder by GAAP or with applicable Law, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary;
(xii) waive, release, assign, settle or compromise any claim, action or proceeding, other than waivers, releases, assignments, settlements or compromises that involve only the payment of monetary damages not in excess of $1 million in the aggregate, or otherwise pay, discharge or satisfy any claims, liabilities or obligations in excess of such amount, in each case, other than in the ordinary course consistent with past practice;
(xiii) amend or waive any provision of, or modify, the Company Charter Documents or Subsidiary Documents;
(xiv) take or omit to take any action that is intended or would reasonably be expected to, individually or in the aggregate, result in any of the conditions to the Merger set forth in Article VI not being satisfied or satisfaction of those conditions being materially delayed in violation of any provision of this Agreement;
(xv) enter into any “non-compete” or similar agreement that would materially restrict the businesses of the Surviving Corporation or its Subsidiaries following the Effective Time or that would in any way restrict the businesses of Parent or its Affiliates (excluding the Surviving Corporation and its Subsidiaries) or take any action that may impose new or additional regulatory requirements on any Affiliate of Parent (excluding the Surviving Corporation and its Subsidiaries);
(xvi) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than the Merger)of such entity;
(xiiixvii) implement or adopt any material change in its existing underwriting, claim handling, loss control, investment, actuarial (or any material assumption underlying an actuarial practice or policy) or Tax or financial accounting principles, practices or methods, other than as required by GAAP, applicable Law or regulatory guidelines;
(xviii) (A) enter into any Contract that would constitute a Material Contract if it had been entered into as of the date of this Agreement or closing agreement with respect to material Taxes, (B) amend, modify in settle or compromise any material respect liability for Taxes, (C) make, revoke or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign change any material rightsTax election, claims (D) file or benefits surrender any claim for a material refund of Taxes, (E) file any amended Tax Return involving a material amount of Taxes, or (F) prepare any Tax Returns in a manner which is not consistent in all material respects with the past practice of the Company or any Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing in the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (II) entering into any client or customer Contracts in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required)its Subsidiaries;
(xivxix) enter into any new line of business;
(xv) enter into new, or materially amend or otherwise materially alter any Contract to make a capital expenditure current, Affiliate Transaction or to purchase a capital asset, transaction which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth in the budget related to would be an Affiliate Transaction if such expenditures provided to Parent transaction occurred prior to the date of this Agreement;hereof; or
(xvixx) enter into an agreement agree to take take, make any commitment to take, or adopt any resolutions of its Board of Directors in support of, any of the foregoing actionsactions prohibited by this Section 5.1(b). Notwithstanding anything to the contrary herein, any action or failure to act by any of Xxxxxx X. Xxxxx, Xx., Xxx X. Xxxxx or Xxxxxx X. Xxxxx, III, or at their direction, will not be deemed to be actions of the Company for purposes of this Section 5.1 unless such action or failure to act was taken with the support of a majority of the independent members of the Board of Directors of the Company.
Appears in 2 contracts
Samples: Merger Agreement (Waste Industries Usa Inc), Merger Agreement (Goldman Sachs Group Inc/)
Conduct of Business by the Company. During the period from the date of this Agreement to and continuing until the Effective TimeClosing, except as otherwise contemplated by this Agreement or unless Parent shall otherwise without the consent in advance in writing, the Company shall, of Delta and shall cause each of the Company Subsidiaries to, carry on their respective businesses in the usual, regular and ordinary course, consistent with past practice or its current expense budgets as disclosed to Parent, and, to the extent substantially consistent therewith, use their commercially reasonable efforts toPurchaser:
(a) Preserve intact their present The business organizations,of the Company and each of its Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices;
(b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep available the services of their directors, officers and key employees, and
(d) Subject to the right of contract parties to exercise applicable rights, maintain satisfactory relationships with their customers, clients, lenders, suppliers, vendors and others having material business relationships with them. Without limiting the generality of the foregoing, neither the Company nor any None of the Company or any of its Subsidiaries will (except as expressly permitted or contemplated by this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule or to the extent that Parent shall otherwise consent in writing (it being understood that Parent shall respond within five Business Days to the Company’s communications soliciting such consent from Parent, such consent not be unreasonably withheld, conditioned or delayed)):
shall: (i) amend its Articles of Incorporation or Bylaws; or (Aii) split, combine or reclassify any shares of its outstanding capital stock, (B) stock or declare, set aside or pay any dividend or other distribution (whether payable in cash, stock or property in respect of its capital stock, or property or any combination thereof) in respect of any shares of capital stock, and dividends or distributions declared, set aside or paid by any Company Subsidiary to the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned by the Company, or (C) indirectly redeem, repurchase or otherwise acquire or offer to redeem, repurchase purchase or otherwise acquire any shares of its capital stock; PROVIDED however, that, notwithstanding this clause (ii) or anything else in this Agreement, the Company Securities shall have the right to (A) pay monthly dividends of profits to the Selling Shareholders consistent with past practice up to an aggregate of $192,000 per month, (B) make distributions to cover Tax liabilities of Selling Shareholders with respect to the Company in respect of taxable years ending on or before the Closing, which tax distributions shall not exceed an aggregate of 42% of the actual taxable income of the Company for each such taxable year, PROVIDED, that, immediately prior to Closing, the Company shall provide Delta a schedule showing all such distributions made under the foregoing clauses (A) and (B), and (C) distribute to the Selling Shareholders certain agreed upon items of personal property, including without limitation, automobiles, personal effects and the like, with the prior written approval of Delta, which shall not be unreasonably withheld. None of the distributions set forth in the foregoing clauses (A), (B), and (C) shall have any Company Subsidiary Securitieseffect on the Purchase Price;
(iic) except for grants and awards, in type and amount consistent with ordinary course past practices, under None of the Company Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any of its Subsidiaries shall: (i) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any material fixed or other securities or equity equivalents (including, without limitation, stock appreciation rights) other than the issuance of shares of Company Common Stock (A) upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof and (B) upon the exercise of Company Warrants outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof;
(iii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests enter into any material contract or businesses, in each casemake any material capital expenditure, other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items in the ordinary course of business of the Company and the Company Subsidiaries in a manner that is consistent with past practice;
practices; (ii) incur, assume or prepay any material indebtedness, liability or obligation or any other material liabilities or issue any debt securities; (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person in a material amount; (iv) sell, lease or otherwise transfer, or create or incur any Encumbrance on, any of the Company’s or the Company Subsidiaries’ assets, securities, properties, interests or businesses, other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights in the ordinary course of business consistent with past practice;
(v) except in the ordinary course of business or pursuant to credit facilities or other arrangements (including intercompany arrangements) in existence as of the date of this Agreement, incur any amount of Indebtedness for borrowed money, guarantee any Indebtedness of a third party, issue or sell debt securities, make any material loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assetscontributions to, or create or suffer investments in, any material Encumbrance thereupon;
other person; (v) fail to maintain adequate insurance consistent with past practices for its businesses and properties; (vi) except (A) as set forth in Section 5.1(vi) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, commence any litigation; or (B) pursuant to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the Transaction;
(vii) change any of the accounting principles or practices used by it except as required by GAAP;
(viii) except for agreements existing as of the date of this Agreement, enter into any agreement or engage in any transaction with one or more of the Company’s directors, officers or stockholders, 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases in the ordinary course of business consistent with past practice, increase the compensation, bonus or other benefits of any director, officer or senior employee;
(x) (A) grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (B) enter into any employmentcontract, deferred compensation agreement, commitment or other similar agreement (or amend arrangement with respect to any such existing agreement), or (C) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreementof the foregoing;
(xid) except The Company and each of its Subsidiaries shall use its commercially reasonable efforts to preserve intact the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary;
(xii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger);
(xiii) (A) enter into any Contract that would constitute a Material Contract if it had been entered into as of the date of this Agreement or (B) amend, modify in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits business organization of the Company and its Subsidiaries, to keep available the services of its present officers and key employees, and to preserve the goodwill of those having business relationships with it, in accordance with past practices; and
(e) The Company will promptly notify Purchaser if any Real Property becomes subject to any condemnation or any Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent or preclude if the Company learns that a condemnation is threatened or any Company Subsidiary from (I) negotiating and/or renewing in the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (II) entering into any client or customer Contracts in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required);
(xiv) enter into any new line of business;
(xv) enter into any Contract to make a capital expenditure or to purchase a capital asset, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth in the budget related to such expenditures provided to Parent prior to the date of this Agreement;
(xvi) enter into an agreement to take any of the foregoing actionscontemplated.
Appears in 2 contracts
Samples: Stock Purchase Agreement (Delta Galil Industries LTD), Stock Purchase Agreement (Delta Galil Industries LTD)
Conduct of Business by the Company. During the period from From and after the date of this Agreement hereof and prior to the Effective TimeTime or the date, except as otherwise contemplated by if any, on which this Agreement is earlier terminated pursuant to Section 6.1 (the "Termination Date"), and except with the prior written consent of the Bidder (which consent will not be unreasonably withheld or unless Parent shall otherwise consent delayed), as set forth in advance in writingSection 4.1 of the Company Disclosure Schedule or as may be expressly permitted pursuant to this Agreement, the Company Company:
(i) shall, and shall cause each of the Company its Subsidiaries to, carry on conduct its operations according to their respective businesses in the usual, regular ordinary and ordinary course, usual course of business consistent with past practice or its current expense budgets as disclosed to Parent, and, to the extent substantially consistent therewith, use their commercially reasonable efforts to:
(a) Preserve intact their present business organizations,
(b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep available the services of their directors, officers and key employees, and
(d) Subject to the right of contract parties to exercise applicable rights, maintain satisfactory relationships with their customers, clients, lenders, suppliers, vendors and others having material business relationships with them. Without limiting the generality of the foregoing, neither the Company nor any of the Company Subsidiaries will (except as expressly permitted or contemplated by this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule or to the extent that Parent shall otherwise consent in writing (it being understood that Parent shall respond within five Business Days to the Company’s communications soliciting such consent from Parent, such consent not be unreasonably withheld, conditioned or delayed)):
(i) (A) split, combine or reclassify any shares of its capital stock, (B) declare, set aside or pay any dividend or other distribution (whether in cash, stock, or property or any combination thereof) in respect of any shares of capital stock, and dividends or distributions declared, set aside or paid by any Company Subsidiary to the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned by the Company, or (C) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Company Securities or any Company Subsidiary Securitiespractice;
(ii) except for grants shall use its reasonable best efforts, and awardscause each of its Subsidiaries to use its reasonable best efforts, to preserve intact its present business organization and goodwill, keep available the services of its current officers and other key employees and preserve its relationships with those Persons having material business dealings with the Company and its Subsidiaries;
(iii) shall not, and shall not permit its Subsidiaries to, authorize or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock (other than any dividends or distribution by a wholly owned Subsidiary of the Company to the Company or any of its wholly owned Subsidiaries);
(iv) shall not, and shall not permit any of its Subsidiaries to establish, enter into or amend any severance plan, agreement or arrangement or any Plan of the Company or increase the compensation payable or to become payable or the benefits provided to its officers, directors or employees, other than as contemplated by law or any existing contract, employee benefit or welfare plan or policy, or in type and amount the ordinary course of business consistent with ordinary course past practicespractice (1) with respect to employees who are not officers of the Company, under the Company Equity Incentive Planand (2) with respect to annual bonuses and other incentive awards for employees including officers;
(v) shall not, as amendedand shall not permit any of its Subsidiaries to, in connection authorize, or announce an intention to authorize, or enter into an agreement with new hires respect to, any merger, consolidation or business combination, any acquisition of a material amount of assets or securities, any disposition of a material amount of assets or securities or any other similar extraordinary transaction;
(vi) shall not, and promotionsshall not permit any of its Subsidiaries to, authorize for issuancepropose or adopt any amendments to its certificate of incorporation or bylaws (or other similar organizational documents);
(vii) shall not, and shall not permit any of its Subsidiaries to, issue or sell authorize the issuance of, or agree or commit to issue or sell any shares of capital stock of any class (whether through the issuance or granting of options, warrants, commitments, convertible securities, subscriptions, rights to purchase or otherwise), except for (1) any stock of any class or any other securities or equity equivalents (including, without limitation, stock appreciation rights) other than the issuance of shares of Company Life Technologies Common Stock (A) upon the exercise pursuant to options and grants outstanding as of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms hereof under the Company's 1997 Long-Term Incentive Plan, 1996 Non-Employee Directors Stock Option Plan, 1995 Long-Term Incentive Plan and the provisions hereof and 1991 Stock Option Plan (Beach such plan, a "Company Equity Plan") upon the exercise of Company Warrants outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof;
or (iii2) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, in each case, other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment options and other similar items equity awards granted in the ordinary course of business consistent with past practice to any new employee hired after the date hereof but before the Closing Date or pursuant to formula awards, in either case under a Company Equity Plan;
(viii) shall not, and shall not permit any of its Subsidiaries to, reclassify, combine, split, purchase or redeem any shares of its capital stock or purchase or redeem any rights, warrants or options to acquire any such shares;
(ix) shall not, and shall not permit any of its Subsidiaries to, (A) incur, assume or prepay any indebtedness or any other liabilities for borrowed money or issue any debt securities other than incurrences and repayments of indebtedness under the Company's or its Subsidiaries' credit facilities in existence on the date of this Agreement, or (B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than wholly owned Subsidiaries), except for guarantees by Subsidiaries of the Company and indebtedness permitted under the Company Subsidiaries in a manner that is consistent with past practicepreceding clause (A);
(ivx) sellshall not, lease and shall not permit any of its Subsidiaries to (or consent to any proposal by any Person in which the Company has an investment to), make or forgive any loans, advances or capital contributions to, or investments in, any other Person other than the Company or any wholly owned Subsidiary of the Company (including any intercompany loans, advances or capital contributions to, or investments in, any affiliate) other than advances to employees in the ordinary course of business in accordance with the Company's or its Subsidiaries' established policies;
(xi) shall not, and shall not permit any of its Subsidiaries to, (A) enter into any material lease, license, contract or agreement or otherwise transfer, or create or incur subject to any Encumbrance on, material Lien any of the Company’s its properties or the Company Subsidiaries’ assets, securities, properties, interests or businessesassets (including securitizations), other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights in the ordinary course of business consistent with past practice;
; (vB) except modify, amend in any material respect, or terminate any of its material contracts; (C) waive, release or assign any rights that are material to the ordinary course of business Company and its Subsidiaries taken as a whole; or pursuant (D) permit any insurance policy naming it as a beneficiary or a loss payable payee to credit facilities lapse, be cancelled or other arrangements (including intercompany arrangements) expire unless a new policy with substantially identical coverage is in existence effect as of the date of this Agreementlapse, incur any amount of Indebtedness for borrowed money, guarantee any Indebtedness of a third party, issue cancellation or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assets, or create or suffer any material Encumbrance thereuponexpiration;
(vixii) except (A) as set forth in Section 5.1(vi) of the Company Disclosure Scheduleshall not, provided that such settlement does and shall not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, or (B) pursuant to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or permit any of its officers or directors or (III) any litigationSubsidiaries to, arbitration, proceeding or dispute that relates to the Transaction;
(vii) change any of the financial accounting principles methods or practices used by it except as unless required by GAAP;
(viiixiii) except for agreements existing as shall not, and shall not permit any of its Subsidiaries to, make any Tax election that, individually or in the date of this Agreement, enter into any agreement or engage in any transaction with one or more of the Company’s directors, officers or stockholders, 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controlsaggregate, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases in the ordinary course of business consistent with past practice, increase the compensation, bonus or other benefits of any director, officer or senior employee;
(x) (A) grant reasonably likely to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (B) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), or (C) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreement;
(xi) except to the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary;
(xii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger);
(xiii) (A) enter into any Contract that would constitute have a Material Contract if it had been entered into as of the date of this Agreement or (B) amend, modify in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits of Adverse Effect on the Company or settle or compromise any Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing in the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (II) entering into any client or customer Contracts in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required)material Tax liability;
(xiv) enter into shall not, and shall not permit any new line of business;its Subsidiaries to, take any action that would prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code; and
(xv) enter into shall not, and shall not permit any Contract to make a capital expenditure of its Subsidiaries to, agree, in writing or to purchase a capital assetotherwise, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth in the budget related to such expenditures provided to Parent prior to the date of this Agreement;
(xvi) enter into an agreement to take any of the foregoing actionsactions or take any action which would result in any of the conditions to the Merger set forth in Article V hereof not being satisfied.
Appears in 2 contracts
Samples: Merger Agreement (Life Technologies Inc), Merger Agreement (Dexter Corp)
Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, except with the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed) or as otherwise specifically contemplated by this Agreement or unless Parent shall otherwise consent as set forth in advance in writingSection 5.1(a) of the Company Disclosure Schedule, the Company shall, and shall cause each of the Company its Subsidiaries to, carry on their respective businesses in the usual, regular and ordinary course, course consistent with past practice or and comply with all applicable Laws and use its current expense budgets as disclosed reasonable best efforts to Parent, and, to the extent substantially consistent therewith, use their commercially reasonable efforts to:
(a) Preserve intact their present business organizations,
(b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep keep available the services of their directors, present officers and key employees, and
(d) Subject other employees and to the right of contract parties to exercise applicable rights, maintain satisfactory preserve their assets and their relationships with their licensors, licensees, partners, customers, clients, lenders, suppliers, vendors distributors and others having material business relationships dealings with themthem and maintain their franchises, rights and Permits. Without limiting Further, during the generality period from the date of this Agreement to the foregoingEffective Time, neither except (1) with the Company nor prior written consent of Parent (which consent shall not be unreasonably withheld or delayed), (2) upon at least 24 hours prior notice, as may be required by applicable Law (including the rules of NASDAQ, excluding any of the Company Subsidiaries will shareholder voting requirements contained therein), (except 3) as expressly specifically contemplated or permitted or contemplated by this Agreement, Agreement or (4) as set forth in Section 5.1 5.1(a) of the Company Disclosure Schedule or to Schedule, the extent that Parent Company shall otherwise consent in writing (it being understood that Parent not, and shall respond within five Business Days to the Company’s communications soliciting such consent from Parent, such consent not be unreasonably withheld, conditioned or delayed)):permit any of its Subsidiaries to:
(i) (A) split, combine or reclassify any shares of its capital stock, (B) declare, set aside or pay any dividend dividends on, or make any other distribution distributions (whether in cash, stockproperty, stock or property or any combination thereofother securities) in respect of, any of its capital stock or other equity or voting interests, except for dividends by a direct or indirect wholly-owned Subsidiary of the Company to its parent, (B) split, combine or reclassify any of its capital 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 shares of its capital stock or other equity or voting interests, or (C) purchase, redeem or otherwise acquire any shares of capital stock or any other securities of the Company or any of its Subsidiaries or any options, warrants, calls or rights to acquire any such shares or other securities (except pursuant to the forfeiture of Company Stock Options or Company Restricted Shares or the acquisition by the Company of shares of Company Common Stock in settlement of the exercise price of Company Stock Options or the Tax withholding obligations of holders of Company Stock Options or Company Restricted Shares);
(ii) issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock, 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 stock, interests or securities or any stock appreciation rights, restricted stock units, stock-based performance units, “phantom” stock awards or other rights that are linked to the value of Company Common Stock or the value of the Company or any part thereof; provided, however, that the Company may issue shares of Company Common Stock pursuant to the exercise of Company Stock Options, the exercise of purchase rights under the Purchase Plan and the Top-Up Option;
(iii) amend the Company Articles or the Company Bylaws or other comparable charter or organizational documents of any of the Company’s Subsidiaries;
(iv) acquire or agree to acquire by merging or consolidating with, or by purchasing all or a substantial portion of the assets of, or by purchasing all or a substantial equity or voting interest in, or by any other manner, any Person or business or division thereof;
(v) sell, lease, license, sell and lease back, mortgage or otherwise subject to any Lien or otherwise dispose of or abandon any of its properties or assets (including any shares of capital stock, and dividends equity or distributions declaredvoting interests or other rights, set aside instruments or paid by any Company Subsidiary to the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned by the Company, or (C) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Company Securities or any Company Subsidiary Securities;
(ii) except for grants and awards, in type and amount consistent with ordinary course past practices, under the Company Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or equity equivalents (including, without limitation, stock appreciation rights) other than the issuance of shares of Company Common Stock (A) upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof and (B) upon the exercise of Company Warrants outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof;
(iii) acquire (by merger, consolidation, acquisition of stock or assets or otherwisesecurities), directly or indirectly, any assets, securities, properties, interests or businesses, in each case, other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items except in the ordinary course of business consistent with past practice and for Permitted Liens;
(vi) (A) repurchase, prepay or incur any indebtedness for borrowed money, including by way of a guarantee or an issuance or sale of debt securities (other than short-term borrowings incurred in the ordinary course of business consistent with past practice to finance the Company’s and its Subsidiaries’ working capital needs) or issue and sell options, warrants, calls or other rights to acquire any debt securities of the Company and the Company Subsidiaries in a manner that is consistent with past practice;
(iv) sell, lease or otherwise transferany of its Subsidiaries, or create (B) make any loans, advances or incur any Encumbrance oncapital contributions to, or investments in, any of the Company’s or the Company Subsidiaries’ assets, securities, properties, interests or businessesother Person, other than the sale Company or any direct or indirect wholly-owned Subsidiary of equipmentthe Company, products and services and the licensing except for advances to employees in respect of Owned Intellectual Property Rights travel or other related ordinary expenses in the ordinary course of business consistent with past practice;
(vvii) except incur or commit to incur any capital expenditures, or any obligations or liabilities in connection therewith, other than in the ordinary course of business or pursuant to credit facilities or other arrangements (including intercompany arrangements) in existence as of the date of this Agreement, incur any amount of Indebtedness for borrowed money, guarantee any Indebtedness of a third party, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assets, or create or suffer any material Encumbrance thereupon;
(vi) except (A) as set forth in Section 5.1(vi) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, or (B) pursuant to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the Transaction;
(vii) change any of the accounting principles or practices used by it except as required by GAAP;
(viii) except for agreements existing as (A) pay, discharge, settle or satisfy any claims (including any claims of the date of shareholders and any shareholder litigation relating to this Agreement, enter into any agreement Agreement or engage in any transaction with one contemplated by this Agreement or more of the Company’s directors, officers or stockholders, or with any corporation, partnership (general or limitedotherwise), limited liability companyliabilities or obligations (whether absolute, association accrued, asserted or unasserted, contingent or otherwise) for an amount in excess of $250,000, other organization of which one than the payment, discharge, settlement or more of the Company’s directors, officers or stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases satisfaction in the ordinary course of business consistent with past practice, increase or as required by their terms as in effect on the compensationdate of this Agreement, bonus of claims, liabilities or obligations reserved against in the Company’s most recent financial statements (including the notes thereto) included in the Filed Company SEC Documents (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, other benefits than the transaction costs related to this Agreement and the transactions contemplated hereunder, (B) waive, relinquish, release, grant, transfer or assign any right of material value or (C) disclose any directorconfidential or proprietary information of the Company or any of its Subsidiaries other than pursuant to a confidentiality agreement restricting the right of the recipient thereof to use and disclose such confidential or proprietary information;
(ix) enter into any Material Contract, officer modify or senior employeeamend in any material respect any Material Contract, waive, release, assign or fail to exercise or pursue any rights or claims under any Material Contract or accelerate, terminate or cancel any Material Contract other than in the ordinary course of business;
(x) except as required to ensure that any Company Benefit Plan or Company Benefit Agreement in effect on the date of this Agreement (or the administration thereof) is not out of compliance with applicable Law or as required to comply with any Company Benefit Plan or Company Benefit Agreement in effect on the date of this Agreement or as specifically required pursuant to this Agreement (and, in each case, in compliance with Section 6.11), (A) grant to any directoradopt, officer enter into, or employee the right to receive establish any new severanceCompany Benefit Plan or Company Benefit Arrangement, change of control or termination terminate, amend or modify any existing Company Benefit Plan or Company Benefit Agreement, (B) increase in any manner the compensation or benefits of, or pay or termination benefitsany bonus to, or grant any loan to, any Company Personnel, other than in connection with new hires and promotions, in each case, in the ordinary course of business and consistent with past practice, (C) grant any new or amend any existing awards under any Company Benefit Plan (including the grant or amendment of any equity or equity-based or related compensation) or remove or modify existing restrictions in any Company Benefit Plan or Company Benefit Agreement or awards made thereunder, (D) grant or pay any severance, separation, retention, incentive compensation, termination or similar compensation or benefits to, or increase in any existing manner the severance, change of control separation, retention, incentive compensation, termination or termination pay or termination benefits to any officer, director or employee, (B) enter into any employment, deferred similar compensation or benefits of, any Company Personnel, other similar agreement (than in connection with new hires or amend any such existing agreement)promotions, in each case, in the ordinary course of business and consistent with past practice, or (CE) establishgrant or pay any change in control compensation or benefits to, adopt or amend (except as required by applicable law) increase in any collective bargainingmanner any change in control or similar compensation or benefits of, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreementany Company Personnel;
(xi) except to form any Subsidiary of the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company SubsidiaryCompany;
(xii) adopt or enter into any collective bargaining agreement or other labor union Contract applicable to the employees of the Company or any of its Subsidiaries;
(xiii) enter into, approve or recommend (or propose publicly to approve or recommend), or permit any of the Company’s Subsidiaries to enter into, any agreement requiring, or reasonably expected to cause, the Company to abandon, terminate, delay or fail to consummate, or that would otherwise impede, interfere or be inconsistent with, the Offer, the Merger or any of the other transactions contemplated by this Agreement or requiring, or reasonably expected to cause, the Company to fail to comply with this Agreement;
(xiv) fail to keep in force any material insurance policy or replacement or revised provisions providing insurance coverage with respect to the assets, operations and activities of the Company and its Subsidiaries as are currently in effect;
(xv) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than the Merger)of such entity;
(xiii) (A) enter into any Contract that would constitute a Material Contract if it had been entered into as of the date of this Agreement or (B) amend, modify in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing in the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (II) entering into any client or customer Contracts in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required);
(xivxvi) enter into any new line of businessbusiness outside its existing business segments;
(xvxvii) enter into convene any Contract annual or special meeting (or any adjournment thereof) of the shareholders of the Company other than the Shareholders Meeting (if such a meeting is required by this Agreement and applicable Law);
(xviii) take any action intended to make a capital expenditure result in any of the conditions of the Offer set forth on Exhibit A or to purchase a capital asset, which expenditure or purchase exceeds the amount or amounts allocated therefor as Merger set forth in Article VII not being satisfied or intended to prevent, delay or impair the budget related ability of the Company to such expenditures provided to Parent prior to consummate the date of this Agreement;Merger; or
(xvixix) enter into an agreement authorize any of, or commit, resolve or agree to take any of of, the foregoing actions.
Appears in 1 contract
Conduct of Business by the Company. During Except for matters set forth in the period Company Disclosure Letter, expressly contemplated by this Agreement or as required to comply with applicable Law, from the date of this Agreement to the Effective Time the Company shall, and shall cause each Company Subsidiary to, conduct its business in the ordinary course consistent with past practices and, to the extent consistent therewith, use commercially reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers, licensors, licensees, distributors and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except for matters set forth in Section 5.1 of the Company Disclosure Letter, expressly contemplated by this Agreement or as required to comply with applicable Law, from the date of this Agreement to the Effective Time, except as otherwise contemplated by this Agreement or unless Parent shall otherwise consent in advance in writing, the Company shallshall not, and shall cause each of the not permit any Company Subsidiaries Subsidiary to, carry on their respective businesses in the usual, regular and ordinary course, consistent with past practice or its current expense budgets as disclosed to Parent, and, to the extent substantially consistent therewith, use their commercially reasonable efforts to:
(a) Preserve intact their present business organizations,
(b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep available the services of their directors, officers and key employees, and
(d) Subject to the right of contract parties to exercise applicable rights, maintain satisfactory relationships with their customers, clients, lenders, suppliers, vendors and others having material business relationships with them. Without limiting the generality of the foregoing, neither the Company nor do any of the Company Subsidiaries will following without the prior written consent of Parent (except as expressly permitted or contemplated by this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule or to the extent that Parent shall otherwise consent in writing (it being understood that Parent shall respond within five Business Days to the Company’s communications soliciting such consent from Parent, such consent not to be unreasonably withheld, conditioned withheld or delayed)):
(i1) (A) splitdeclare, combine set aside or reclassify pay any shares dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock, (B) declaresplit, set aside combine or pay reclassify any dividend of its capital stock or issue or authorize the issuance of any other distribution (whether securities in cashrespect of, in lieu of or in substitution for shares of its capital stock, (C) purchase, redeem or property or any combination thereof) in respect of otherwise acquire any shares of capital stock, and dividends or distributions declared, set aside or paid by any Company Subsidiary to stock of the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned by the Company, or (C) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Company Securities or any Company Subsidiary Securities;
(ii) except for grants and awards, in type and amount consistent with ordinary course past practices, under the Company Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities thereof or equity equivalents any rights, warrants or options to acquire any such shares or other securities (includingother than net exercises of Company Stock Options, without limitationin each case in accordance with the terms thereof), or (D) make any capital contribution in cash or other property to any Company Subsidiary;
(2) issue, deliver, sell or grant (A) any shares of its capital stock or any (other) Company Subsidiary, (B) any Voting Company Debt or other voting securities, (C) any securities convertible into or exchangeable for, or any options, warrants or rights to acquire, any such shares, Voting Company Debt, voting securities or convertible or exchangeable securities or (D) any “phantom” stock, “phantom” stock rights, stock appreciation rights) rights or stock-based performance units, other than the issuance of shares of Company Common Stock (A1) upon the exercise of Company Stock Options outstanding on or pursuant to the date of this Agreement ESPP and in accordance with their present terms and the provisions hereof and (B2) upon the exercise of as required to comply with any Company Warrants outstanding Benefit Plan as in effect on the date of this Agreement in accordance with their present terms and the provisions hereofAgreement;
(iii3) acquire amend its certificate of incorporation, Bylaws or other comparable charter or organizational documents;
(4) acquire, merge, consolidate with, purchase an equity interest in or purchase a substantial portion of the assets of, or by mergerany other manner, consolidationany business or any corporation, partnership, joint venture, association or other business organization or division thereof to the extent the aggregate purchase price payable in respect of all such acquisitions during the term of this Agreement exceeds $500,000 (provided that the terms of any such acquisition would not reasonably be expected to materially delay or interfere with the consummation of stock the Merger or assets any of the other transactions contemplated by this Agreement);
(5) except (A) as required by applicable Law (including, without limitation, as reasonably intended to comply with and prevent the imputation of any tax, penalty or otherwiseinterest under Section 409A of the Code; provided, however, that no actions taken to comply with Section 409A of the Code shall result in additional material liability (beyond the benefits otherwise due) or in a material acceleration of the time of payment), directly or indirectly, any assets, securities, properties, interests or businesses, in each case, other than licenses (B) increases of Licensed Intellectual Property Rights, inventory, supplies, equipment compensation and other similar items benefits of non-executive employees in the ordinary course of business of the Company and the Company Subsidiaries in a manner that is consistent with past practice, (C) as otherwise contemplated by this Agreement or (D) as required pursuant to the terms of any Company Benefit Plan in effect on the date of this Agreement, (1) grant to any current or former officer, director, consultant or employee of the Company or any Company Subsidiary any increase in compensation, (2) grant to any such current or former officer, director, consultant or employee any increase in or new rights to severance or termination pay, (3) enter into any employment or consulting agreement with any officer, director, consultant, or employee of the Company pursuant to which the total annual compensation exceeds $150,000, (4) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or Company Benefit Plan or (5) take any action to accelerate any rights or benefits, or make any material determinations, under any collective bargaining agreement or Company Benefit Plan;
(iv6) make any change in accounting methods, principles or practices materially affecting the reported consolidated assets, liabilities or results of operations of the Company, except insofar as may have been required by a change in GAAP;
(7) sell, lease (as lessor), license or otherwise transferdispose of or subject to any Lien (other than a Permitted Lien) any properties or assets of the Company or any Company Subsidiary (including any capital stock of such Company Subsidiary), except (A) sales, leases or dispositions made, or create licenses or Liens granted, in the ordinary course of business consistent with past practice, (B) Liens granted to secure Indebtedness permitted to be incurred pursuant to Section 5.1(a)(8) and (C) sales, leases or dispositions of assets with a fair value not in excess of $250,000 in the aggregate;
(8) (A) incur any Encumbrance onIndebtedness for borrowed money or guarantee any such Indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any Company Subsidiary, guarantee any debt securities of another person, enter into any “keep well” or other agreement to maintain any financial statement condition of another person, amend or modify the terms of any current Indebtedness or enter into any arrangement having the economic effect of any of the foregoing, except for (1) Indebtedness incurred in the ordinary course of business consistent with past practice under the Company’s current existing revolving credit facilities and (2) Indebtedness incurred by the refinancing of the Company’s current existing revolving credit facilities so long as such refinancing does not result in aggregate Indebtedness greater than that outstanding as of the date of such refinancing, or the Company Subsidiaries’ assets(B) make any loans, securitiesadvances or capital contributions to, propertiesor investments in, interests or businessesany other person, other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights advances to employees in the ordinary course of business consistent with past practice;
(v9) except make, incur or agree to make any new capital expenditure or expenditures that, in the ordinary course of business or pursuant to credit facilities or other arrangements (including intercompany arrangements) in existence as of aggregate, exceeds the date of this Agreement, incur any amount of Indebtedness for borrowed money, guarantee any Indebtedness of a third party, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assets, or create or suffer any material Encumbrance thereupon;
(vi) except (A) as expenditure budget set forth in Section 5.1(vi5.1(a)(9) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, or (B) pursuant to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the TransactionLetter;
(vii10) make or change any material Tax election, file any material amended Tax Return, make or change any material method of accounting with respect to Taxes, waive or agree to extend the accounting principles statute of limitations with respect to Taxes, or practices used by it settle or compromise any material Tax liability or refund except in each case as required by GAAPapplicable Law;
(viii11) except for agreements existing as of the date of this Agreement, enter into any agreement or engage in any transaction with one or more lease (including renewals) of the Company’s directors, officers or stockholders, or with any corporation, partnership real property that (general or limited), limited liability company, association or other organization of which one or more of the Company’s directors, officers or stockholders A) is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases not in the ordinary course of business consistent with past practicepractice or (B) that, increase by its terms, calls for aggregate payments by the compensation, bonus Company or other benefits any Company Subsidiary of any director, officer or senior employeemore than $250,000 annually;
(x12) (A) grant to cancel any director, officer material Indebtedness except in the case of the refinancing of the Company’s current existing revolving credit facilities or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (B) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), or (C) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreementCompany’s Senior Notes;
(xi13) settle or compromise any pending or threatened suit, action, claim or litigation, except to in the extent required to comply ordinary course of business and where such settlement or compromise would result in payment (individually and not in the aggregate), net of insurance, by the Company of less than $100,000 or, taken together with its obligations hereunder or with applicable Lawall settlements and compromises, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary$250,000;
(xii14) fail to maintain insurance covering risks of such types and such amounts as are consistent with past practices;
(15) adopt or enter into a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than of the Merger)Company;
(xiii16) (A) enter into any Contract that would constitute a Material Contract if it had been entered into as of the date of this Agreement or (B) amend, modify in any material respect materially amend or terminate any Material Contract or enter into any Material Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing except in the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (II) entering into any client or customer Contracts in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required)practices;
(xiv17) enter into any new line of businessRelated Party Transaction;
(xv18) enter incur any further Company Transaction Expenses other than pursuant to arrangements (i) in effect on the date hereof and (ii) entered into any Contract to make a capital expenditure or to purchase a capital asset, which expenditure or purchase exceeds after the amount or amounts allocated therefor as set forth date hereof for services in connection with the Stockholders Meeting and the Merger provided that such expenses do not exceed $50,000 in the budget related to such expenditures provided to Parent prior to the date of this Agreement;aggregate; or
(xvi19) enter into an agreement authorize any of, or commit or agree to take any of of, the foregoing actions.
Appears in 1 contract
Conduct of Business by the Company. During Except for matters set forth in the period Company Disclosure Letter or otherwise expressly permitted by this Agreement or as agreed in writing by the parties from time to time, from the date of this Agreement to the Effective Time, except as otherwise contemplated by this Agreement or unless Parent shall otherwise consent in advance in writing, the Company shall, and shall cause each of the Company Subsidiaries Subsidiary (other than Just-Rite) to, carry on their respective businesses conduct its business in the usual, regular and ordinary course, consistent with past practice or its current expense budgets course in substantially the same manner as disclosed to Parent, and, to the extent substantially consistent therewith, previously conducted and use their commercially reasonable efforts to:
(a) Preserve to preserve intact their present its current business organizations,
(b) Maintain in effect all of their foreignorganization, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep keep available the services of their directors, its current officers and key employees, and
(d) Subject to the right of contract parties to exercise applicable rights, maintain satisfactory employees and keep its relationships with their customers, clients, lenders, suppliers, vendors licensors, licensees, distributors and others having material business relationships dealings with themthem to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without In addition, and without limiting the generality of the foregoing, neither except for matters set forth in the Company nor any of the Company Subsidiaries will (except as Disclosure Letter or otherwise expressly permitted or contemplated by this Agreement, as set forth in Section 5.1 from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any Company Subsidiary (other than Just-Rite) to, do any of the Company Disclosure Schedule or to following without the extent that Parent shall otherwise prior written consent in writing (it being understood that Parent shall respond within five Business Days to the Company’s communications soliciting such consent from of Parent, such consent not to be unreasonably withheld, conditioned or delayed))::
(i) (A) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, (B) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (C) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any Company Subsidiary (other than Just-Rite) or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities;
(ii) issue, deliver, sell or grant (A) any shares of its capital stock, (B) declare, set aside or pay any dividend Voting Company Debt or other distribution (whether in cashvoting securities, stock, or property or any combination thereof) in respect of any shares of capital stock, and dividends or distributions declared, set aside or paid by any Company Subsidiary to the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned by the Company, or (C) redeemany securities convertible into or exchangeable for, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Company Securities or any Company Subsidiary Securities;
(ii) except for grants and awards, in type and amount consistent with ordinary course past practices, under the Company Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, warrants or rights to purchase acquire, any such shares, Voting Company Debt, voting securities or otherwiseconvertible or exchangeable securities or (D) any “phantom” stock, “phantom” stock of any class or any other securities or equity equivalents (including, without limitationrights, stock appreciation rights) rights or stock-based performance units, other than the issuance of shares of Company Common Stock (A) upon the exercise of Company Stock Options outstanding on the date of this Agreement and in accordance with their present terms and the provisions hereof and (B) upon the exercise of Company Warrants outstanding on the date of this Agreement in accordance with their present terms and the provisions hereofterms;
(iii) amend its certificate of incorporation, by-laws or other comparable charter or organizational documents;
(iv) acquire or agree to acquire (A) by mergermerging or consolidating with, consolidationor by purchasing a substantial equity interest in or portion of the assets of, acquisition of stock or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof or (B) any assets that are material, individually or otherwisein the aggregate, to the Company and the Company Subsidiaries (other than Just-Rite), directly taken as a whole;
(A) grant to any employee, executive officer or indirectly, director of the Company or any assets, securities, properties, interests or businesses, in each case, Company Subsidiary (other than licenses Just-Rite) any increase in compensation, (B) grant to any employee, executive officer or director of Licensed Intellectual Property Rightsthe Company or any Company Subsidiary (other than Just-Rite) any increase in severance or termination pay, inventory(C) enter into any employment, suppliesconsulting, equipment and other similar items indemnification, severance or termination agreement with any such employee, executive officer or director, (D) establish, adopt, enter into or amend in any material respect any collective bargaining agreement, Company Benefit Plan or Company Benefit Agreement, (E) take any action to accelerate any rights or benefits, or make any material determinations not in the ordinary course of business consistent with prior practice, under any collective bargaining agreement, Company Benefit Plan or Company Benefit Agreement, or (F) pay any bonuses to any current or former officer, director, employee or other service provider, except, in the case of the Company foregoing clauses (A), (B), (C), (D) and the Company Subsidiaries in a manner that is consistent with past practice(E), as otherwise expressly required by applicable Law;
(ivvi) make any change in accounting methods, principles or practices materially affecting the reported consolidated assets, Liabilities or results of operations of the Company, except insofar as may have been required (a) by GAAP or (b) by applicable law;
(vii) sell, lease (as lessor) or otherwise transferdispose of, or create subject to or incur permit any Encumbrance Lien on, any material properties or material assets;
(viii) (A) incur any indebtedness for borrowed money other than under existing credit agreements reflected on the Filed Company SEC Documents or guarantee any such indebtedness of another Person, issue or sell any debt securities or other rights to acquire any debt securities of the Company or any Company Subsidiary (other than Just-Rite), 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 or (B) make any loans, advances or capital contributions to, or investments in, any other Person, other than any direct or indirect wholly owned subsidiary of the Company’s ;
(ix) make or agree to make any new capital expenditure or expenditures that are in excess of $20,000;
(x) make or change any material Tax election, change Tax accounting methods, file any amended Tax Returns, consent to any extension or waiver of the Company Subsidiaries’ assetsstatute of limitations applicable to any Tax claim or assessment, securitiesor settle or compromise any material Tax Liability or refund;
(xi) (A) pay, propertiesdischarge or satisfy any claims, interests Liabilities or businessesobligations (absolute, accrued, asserted or unasserted, contingent or otherwise), including the Liabilities for the automobile used by Xxxxxx Xxxxx on the date of this Agreement, other than the sale of equipmentpayment, products and services and the licensing of Owned Intellectual Property Rights discharge or satisfaction, in the ordinary course of business consistent with past practice;
(v) except in the ordinary course of business practice or pursuant to credit facilities or other arrangements (including intercompany arrangements) in existence as of the date of this Agreement, incur any amount of Indebtedness for borrowed money, guarantee any Indebtedness of a third party, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assets, or create or suffer any material Encumbrance thereupon;
(vi) except (A) as set forth in Section 5.1(vi) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC ReportsDisclosure Letter, or (B) pursuant to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course of business, settle or offer or propose to settle, (I) cancel any material litigationindebtedness (individually or in the aggregate) or waive any claims or rights of substantial value or (C) waive the benefits of, investigationor agree to modify in any manner, arbitrationany confidentiality, proceeding standstill or other claim involving or against similar agreement to which the Company or any Company SubsidiarySubsidiary (other than Just-Rite) is a party;
(xii) enter into, grant, authorize or agree to any agreement that licenses Intellectual Property or allows the license of Intellectual Property to any Person;
(IIxiii) permit to be canceled or terminated, or cancel or terminate, any stockholder litigation or claim in writing against insurance policy naming the Company or any Company Subsidiary (other than Just-Rite) as a beneficiary or loss payee, unless such policy is replaced by a policy with comparable coverage, or otherwise fail to maintain insurance at less than current levels or otherwise in a manner consistent with past practices in all respects; provided, however, the Company shall have the right to settle any present litigation related to insurance coverage without being required to comply with the provisions of its officers or directors or (III) any litigationthis Section; provided, arbitration, proceeding or dispute further that relates the Company provide prompt written notice of such settlements to the TransactionParent;
(viixiv) change notwithstanding the foregoing, take any action, that will materially decrease the Working Capital or the cash balance of the accounting principles or practices used by it except as required by GAAP;
Company from their June 30, 2012 balances other than (viiiA) except for agreements existing as of the date of this Agreement, enter into any agreement or engage in any transaction with one or more of the Company’s directors, officers or stockholders, 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases in the ordinary course of business consistent with past practice, increase (B) any payments in connection with this Agreement and the compensationTransactions, bonus and (C) as a result of continuing losses consistent with the quarter ended March 31, 2012.
(xv) enter into, amend, or otherwise modify, terminate or waive any material provision of, any Material Contract (other benefits than any extension or expiration of any director, officer or senior employeesuch Material Contract in accordance with its terms);
(xxvi) (A) grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefitsfile, or grant suffer to exist, a voluntary or involuntary petition seeking relief under any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employeeapplicable Law, (B) enter into consent to, or fail to contest in a timely and appropriate manner to, the institution of any employmentrelief proceedings or the filing of any such petition or the appointment of or taking possession by a custodian, deferred compensation receiver, liquidator, assignee, trustee or other similar agreement sequestrator (or amend any such existing agreement), or (Csimilar official) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreement;
(xi) except to the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary;
(xii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger);
(xiii) (A) enter into any Contract that would constitute a Material Contract if it had been entered into as of the date of this Agreement or (B) amend, modify in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any Company Subsidiary thereunder; providedor for any substantial part of their assets, however(C) make an assignment for the benefit of creditors, that the foregoing shall not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing in the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (IID) entering into take any client or customer Contracts action in the ordinary course furtherance of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required);
(xiv) enter into any new line of business;
(xv) enter into any Contract to make a capital expenditure or to purchase a capital asset, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth in the budget related to such expenditures provided to Parent prior to the date of this Agreement;
(xvi) enter into an agreement to take any of the foregoing or (E) admit in writing its inability to pay its debts as such debts become due;
(xvii) hire any new employees other than to replace current manufacturing employees on terms and conditions no more favorable than the employee being replaced;
(xviii) make any voluntary changes with respect to the management, supervisory or other key personnel;
(xix) pay or incur any obligation to pay any compensation or remuneration, whether in cash, stock, or in-kind, to any member of the Company’s or any Company Subsidiary’s Board of Directors on account of their service in such capacity except for (A) any compensation or remuneration to a Board member that was earned and unpaid as of June 12, 2012, (B) reimbursing Board members for their reasonable out-of-pocket expenses for attending Board meetings in accordance with the Company’s or any Company Subsidiary’s policies and procedures, and (C) the payment of regular employment compensation for an employee Director, or
(xx) authorize any of, or commit or agree to take any of, the foregoing actions.
Appears in 1 contract
Conduct of Business by the Company. During the period from (a) From the date of this Agreement to until the Effective Time, except as otherwise contemplated by this Agreement (i) if the Chief Executive Officer or unless any Senior Vice President of Parent shall otherwise expressly consent in advance writing, (ii) as required by applicable Law or (iii) as expressly set forth in writingSection 5.1(a) of the Company Disclosure Letter or as otherwise expressly required by this Agreement, the Company shall, and shall cause each of the Company Subsidiaries to, carry on their respective businesses conduct its business in the usual, regular ordinary course and ordinary course, in a commercially reasonable manner consistent with past practice or practice, and shall use its current expense budgets as disclosed to Parent, and, to the extent substantially consistent therewith, use their commercially reasonable efforts to:
to (aA) Preserve preserve intact its business organization and goodwill and key relationships with its customers, suppliers, employees, contractors, distributors and others having business dealings with it, (B) keep available the services of its current officers and key employees and (C) preserve its tangible assets and properties in their present business organizations,current states of repair and condition (ordinary wear and tear excepted).
(b) Maintain in effect all of their foreign, federal, state In addition to and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep available the services of their directors, officers and key employees, and
(d) Subject to the right of contract parties to exercise applicable rights, maintain satisfactory relationships with their customers, clients, lenders, suppliers, vendors and others having material business relationships with them. Without without limiting the generality of the foregoingSection 5.1(a), neither the Company nor any except as expressly set forth in Section 5.1(b) of the Company Subsidiaries will (except Disclosure Letter or as otherwise expressly permitted or contemplated required by this Agreement, as set forth in Section 5.1 from the date hereof until the Effective Time, without the prior express written consent of Parent, the Company Disclosure Schedule shall not, and shall not permit any Company Subsidiary to, directly or to the extent that Parent shall otherwise consent in writing (it being understood that Parent shall respond within five Business Days to the Company’s communications soliciting such consent from Parent, such consent not be unreasonably withheld, conditioned or delayed)):indirectly:
(i) amend or modify, or permit the adoption of any amendment or modification to, any of its Constituent Documents;
(ii) (A) split, combine or reclassify any shares of its capital stock, (B) declare, authorize, set aside aside, make or pay any dividend or other distribution (whether in cash, stock, stock or property or any combination thereofproperty) in respect of any shares of capital stockits Securities, and other than dividends or distributions declared, set aside or paid by any Company Subsidiary to the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned by the Company, or (C) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Company Securities or any Company Subsidiary Securities;
(ii) except for grants and awards, in type and amount consistent with ordinary course past practices, under the Company Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or equity equivalents (including, without limitation, stock appreciation rights) other than the issuance of shares of Company Common Stock (A) upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof and (B) upon the exercise of Company Warrants outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof;
(iii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, in each case, other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items in the ordinary course of business of the Company and the Company Subsidiaries in a manner that is consistent with past practice;
(iv) sell, lease or otherwise transfer, or create or incur by any Encumbrance on, any of the Company’s or the wholly owned Company Subsidiaries’ assets, securities, properties, interests or businesses, other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights in the ordinary course of business consistent with past practice;
(v) except in the ordinary course of business or pursuant to credit facilities or other arrangements (including intercompany arrangements) in existence as of the date of this Agreement, incur any amount of Indebtedness for borrowed money, guarantee any Indebtedness of a third party, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assets, or create or suffer any material Encumbrance thereupon;
(vi) except (A) as set forth in Section 5.1(vi) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, or (B) pursuant to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the Transaction;
(vii) change any of the accounting principles or practices used by it except as required by GAAP;
(viii) except for agreements existing as of the date of this Agreement, enter into any agreement or engage in any transaction with one or more of the Company’s directors, officers or stockholders, 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases in the ordinary course of business consistent with past practice, increase the compensation, bonus or other benefits of any director, officer or senior employee;
(x) (A) grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (B) enter into split, combine or reclassify any employmentof its Securities or propose the issuance of any Securities in respect of, deferred compensation or other similar agreement (or amend any such existing agreement)in lieu of, or (C) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreement;
(xi) except to the extent required to comply with in substitution for shares of its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylawsSecurities, or otherwise amend the certificate terms of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary;
(xii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger);
(xiii) (A) enter into any Contract that would constitute a Material Contract if it had been entered into as of the date of this Agreement or (B) amend, modify in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing in the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (II) entering into any client or customer Contracts in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required);
(xiv) enter into any new line of business;
(xv) enter into any Contract to make a capital expenditure or to purchase a capital asset, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth in the budget related to such expenditures provided to Parent prior to the date of this Agreement;
(xvi) enter into an agreement to take any of the foregoing actions.its Securities,
Appears in 1 contract
Samples: Merger Agreement (Hillenbrand, Inc.)
Conduct of Business by the Company. During Pending the Closing.
(a) Subject to any obligations as a debtor or debtor in possession under the Bankruptcy Code, any requirements of the Joint Provisional Liquidators (whether pursuant to the Bermuda Orders or any other order of the Bermuda Court), and/or any order of the Bermuda Court, and except as set forth on Schedule 4.1, during the period from the date hereof and continuing until the earlier of the termination of this Agreement to in accordance with its terms or the Effective TimeClosing, except as unless each Investor otherwise contemplated by this Agreement or unless Parent shall otherwise consent in advance agrees in writing, the Company shall, and shall cause each of the Company Subsidiaries to, carry on their respective businesses : (i) conduct its business in the usualOrdinary Course of Business, regular including meeting its post-Petition obligations as they become due; (ii) use reasonable efforts to preserve and ordinary coursemaintain its relationships with its customers, consistent suppliers, partners, lessors, licensors, licensees, contractors, distributors, agents, officers and employees and other Persons with past practice or its current expense budgets as disclosed to Parent, and, which it has significant business relationships material to the extent substantially consistent therewithbusiness of the Company except in relation to Executory Contracts on the Rejection List (provided, that nothing herein shall prevent the Company or any Subsidiary from commencing or defending any litigation against or by any such Person in connection with the claims of such Person in the Bankruptcy Case or in the Bermuda Case); (iii) use their commercially its reasonable efforts to:
to preserve and maintain the Assets and properties it owns which are material to the business of the Company, ordinary wear and tear excepted other than Assets and properties which are the subject of Executory Contracts on the Rejection List; (aiv) Preserve intact their present business organizations,use reasonable efforts to preserve the ongoing operations of its business; (v) maintain its books and records in the Ordinary Course of Business; (vi) comply in all material respects with applicable Laws; and (vii) not enter into any business, arrangement or otherwise take any action that would reasonably be expected to have a material adverse impact on any Governmental Investigation or on the ability of the Company or the Investors to obtain any Regulatory Approvals.
(b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep available the services of their directors, officers and key employees, and
(d) Subject to the right of contract parties to exercise applicable rights, maintain satisfactory relationships with their customers, clients, lenders, suppliers, vendors and others having material business relationships with them. Without limiting the generality of the foregoing, neither except as expressly contemplated by this Agreement (including but not limited to Section 4.2) or as set forth on Schedule 4.1, between the date hereof and the Closing Date, the Company nor shall not, and shall cause each of the Subsidiaries not to, take any action that is reasonably likely to result in (i) any of the Company Subsidiaries will (except as expressly permitted or contemplated by this Agreement, as representations and warranties set forth in Section 5.1 of the Company Disclosure Schedule Article II becoming false or to the extent that Parent shall otherwise consent in writing (it being understood that Parent shall respond within five Business Days to the Company’s communications soliciting such consent from Parent, such consent not be unreasonably withheld, conditioned or delayed)):
(i) (A) split, combine or reclassify any shares of its capital stock, (B) declare, set aside or pay any dividend or other distribution (whether in cash, stock, or property or any combination thereof) in respect of any shares of capital stock, and dividends or distributions declared, set aside or paid by any Company Subsidiary to the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned by the Company, or (C) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Company Securities or any Company Subsidiary Securities;
(ii) except for grants and awards, in type and amount consistent with ordinary course past practices, under the Company Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or equity equivalents (including, without limitation, stock appreciation rights) other than the issuance of shares of Company Common Stock (A) upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof and (B) upon the exercise of Company Warrants outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof;
(iii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, in each case, other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items in the ordinary course of business of the Company and the Company Subsidiaries in a manner that is consistent with past practice;
(iv) sell, lease or otherwise transfer, or create or incur any Encumbrance on, any of the Company’s or the Company Subsidiaries’ assets, securities, properties, interests or businesses, other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights in the ordinary course of business consistent with past practice;
(v) except in the ordinary course of business or pursuant to credit facilities or other arrangements (including intercompany arrangements) in existence as of the date of this Agreement, incur any amount of Indebtedness for borrowed money, guarantee any Indebtedness of a third party, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assets, or create or suffer any material Encumbrance thereupon;
(vi) except (A) as set forth in Section 5.1(vi) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, or (B) pursuant to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the Transaction;
(vii) change any of the accounting principles or practices used by it except as required by GAAP;
(viii) except for agreements existing as of the date of this Agreement, enter into any agreement or engage in any transaction with one or more of the Company’s directors, officers or stockholders, 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases in the ordinary course of business consistent with past practice, increase the compensation, bonus or other benefits of any director, officer or senior employee;
(x) (A) grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (B) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), or (C) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreement;
(xi) except to the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary;
(xii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger);
(xiii) (A) enter into any Contract that would constitute a Material Contract if it had been entered into as of the date of this Agreement or (B) amend, modify inaccurate in any material respect or terminate (ii) the failure of any Material Contract of the conditions set forth in Article VI to be satisfied.
(c) Notwithstanding the foregoing provisions of this Section 4.1, the parties acknowledge that the transfer of control of the Communications Licenses may require prior approval of certain Governmental Entities and that all final decisions with respect to the FCC Licenses must be taken by the Company prior to the Closing. The parties do not intend that the foregoing provisions of this Section 4.1 shall transfer control of the Communications Licenses.
(d) Notwithstanding the foregoing provisions of this Section 4.1 or any Contract referred provision in this Agreement to in clause (A) or otherwise waivethe contrary, release or assign any material rights, claims or benefits of the parties hereto acknowledge that the Company shall not be prohibited from (i) settling or resolving any Company Subsidiary thereunderGovernmental Investigation prior to the Closing so long as any such settlement would not reasonably be likely to result in, individually or in the aggregate, a Material Adverse Effect or (ii) after consultation with the Investors, commencing insolvency proceedings for or against one or more Non-Filing Subsidiaries; provided, however, that the foregoing shall commencement of such proceedings is not prevent reasonably likely to result in, individually or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing in the ordinary course of business consistent with past practice any aggregate, a Material Contracts that are scheduled to expire upon their terms or (II) entering into any client or customer Contracts in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required);
(xiv) enter into any new line of business;
(xv) enter into any Contract to make a capital expenditure or to purchase a capital asset, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth in the budget related to such expenditures provided to Parent prior to the date of this Agreement;
(xvi) enter into an agreement to take any of the foregoing actionsAdverse Effect.
Appears in 1 contract
Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, except as otherwise contemplated by this Agreement or unless Parent shall otherwise consent in advance in writingAgreement, the Company shall, and shall cause each of the Company Subsidiaries to, use its commercially reasonable efforts to carry on their respective businesses in the usual, regular and ordinary course, consistent with the requirements of Law and past practice or practice, and use its current expense budgets as disclosed to Parent, and, to the extent substantially consistent therewith, use their commercially reasonable efforts to:
(a) Preserve to preserve intact their its present business organizations,
(b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep keep available the services of their directorsits present advisors, managers, officers and key employees, and
(d) Subject to the right of contract parties to exercise applicable rights, maintain satisfactory employees and preserve their relationships with their customers, clients, lenders, suppliers, vendors licensors and others having material business relationships dealings with themthem and continue to perform and comply with the terms of existing contracts as in effect on the date hereof (for the term provided in such contracts). Without limiting the generality of the foregoing, neither the Company nor any of the Company Subsidiaries will not (except as expressly permitted by this Agreement or as contemplated by this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule transactions contemplated hereby or to the extent that Parent shall otherwise consent in writing (it being understood that Parent shall respond within five Business Days to the Company’s communications soliciting such consent from Parent, such consent not be unreasonably withheld, conditioned or delayed)writing):
(ia) (A) split, combine or reclassify any shares of its capital stock, (Bi) declare, set aside or pay any dividend or other distribution (whether in cash, stock, or property or any combination thereof) in respect of any shares of its capital stock, and dividends (ii) split, combine or distributions declared, set aside or paid by reclassify any Company Subsidiary to the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned by the Company, of its capital stock or (Ciii) redeemrepurchase, repurchase or otherwise acquire or offer to redeem, repurchase redeem or otherwise acquire any Company Securities or any Company Subsidiary Securitiesof its securities;
(iib) except for grants and awards, in type and amount consistent with ordinary course past practices, under the Company Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell issue, sell, deliver or agree or commit to issue issue, sell or sell deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities (including indebtedness having the right to vote) or equity equivalents (including, without limitation, stock appreciation rights) other than the issuance of shares of Company Common Stock (A) upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof and (B) upon the exercise of Company Warrants outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof);
(iiic) acquire (by mergersell, consolidationlease, acquisition of stock license, assign, dispose, transfer or assets or otherwise), directly or indirectly, otherwise make any commitment with respect to assets, securities, properties, interests or businesses, in each case, other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items in the ordinary course of business of the Company and the Company Subsidiaries in a manner that is consistent with past practice;
(iv) sell, lease or otherwise transfer, or create or incur any Encumbrance on, any of the Company’s or the Company Subsidiaries’ assets, securities, properties, interests or businesses, other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights in the ordinary course of business consistent with past practice;
(vi) except in for any draw downs on the ordinary course of business or pursuant secured promissory note issued to credit facilities or other arrangements (including intercompany arrangements) in existence Regence BlueShield as of the date of this AgreementMarch 12, 2018, incur any amount of Indebtedness indebtedness for borrowed money, guarantee any Indebtedness indebtedness, guarantee (or become liable for) any debt of a third party, issue or sell debt securitiesothers, make any loans, advances or capital contributions, mortgage, pledge contributions or otherwise encumber issue or sell debt securities or warrants or rights to acquire any material assets, or create or suffer any material Encumbrance thereupondebt securities;
(vie) except (A) as set forth in Section 5.1(vi) of the Company Disclosure Schedulemortgage, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reportspledge, create, incur, assume or (B) pursuant suffer to exist any mandatory payments (including cash sweep arrangements) under Lien on any credit facilities in existence on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the Transaction;
(vii) change any of the accounting principles or practices used by it except as required by GAAP;
(viii) except for agreements existing as of the date of this Agreement, enter into any agreement or engage in any transaction with one or more of the Company’s directorsmaterial assets;
(f) (i) enter into, officers adopt, amend or stockholdersterminate any Employee Plan, (ii) enter into, adopt, amend or with terminate any corporationother agreement, partnership arrangement, plan or policy between the Company and any of its officers, directors or employees, (general iii) grant any increase in compensation or limited)benefits, limited liability companyincluding the grant of any bonus, association equity or other organization of which one equity-based compensation, to any current or more of the Company’s directors, officers or stockholders is (x) a former director, officer, manager, managing partner, managing member (employee or the holder of any office with similar authority), (y) has a direct or indirect financial interestconsultant, or (ziv) directly or indirectly controls, is controlled by or is under common control withfail to make contributions to Employee Plans in accordance with past practice;
(ixg) cause, permit or propose any amendments to the Certificate of Incorporation or Bylaws of the Company, except as required expressly provided by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases in the ordinary course terms of business consistent with past practice, increase the compensation, bonus or other benefits of any director, officer or senior employeethis Agreement;
(x) (A) grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (B) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), or (C) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreement;
(xi) except to the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary;
(xiih) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than of the Merger)Company;
(xiiii) (A) make any Tax election or settle or compromise any federal, state, local or foreign Tax liability, change its annual tax accounting period, change any method of Tax accounting, enter into any Contract that would constitute closing agreement relating to any Tax, surrender any right to claim a Tax refund, or consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment;
(j) settle or compromise any pending or threatened suit, action or claim where the amount paid in settlement or compromise exceeds $10,000 or which relates to the transactions contemplated hereby;
(k) forgive, compromise or waive any obligation or performance (past, present or future) owed to the Company, including under any Material Contract if it had been entered into as of the date of this Agreement or other right or claim;
(Bl) amend, cancel, waive or modify in any material respect or terminate right under any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing in the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (II) entering into any client or customer Contracts in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required);
(xiv) enter into any new line of business;Material Contract; or
(xvm) enter into authorize any Contract to make a capital expenditure of, or to purchase a capital asset, which expenditure commit or purchase exceeds the amount or amounts allocated therefor as set forth in the budget related to such expenditures provided to Parent prior to the date of this Agreement;
(xvi) enter into an agreement agree to take any of the foregoing actions.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Livongo Health, Inc.)
Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, except with the prior written consent of Parent (which shall not be unreasonably delayed) or as otherwise specifically contemplated by this Agreement or unless Parent shall otherwise consent as set forth in advance in writingSection 4.01(a) of the Company Letter, the Company shall, and shall cause each of the Company its Subsidiaries to, carry on their respective businesses in the usual, regular and ordinary course, course consistent with past practice or its current expense budgets as disclosed and use commercially reasonable efforts to Parent, comply with all applicable Laws and, to the extent substantially consistent therewith, use their commercially reasonable efforts to:
(a) Preserve intact their present business organizations,
(b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep to keep available the services of their directorspresent officers, officers software developers and key other employees, and
(d) Subject to the right of contract parties to exercise applicable rightspreserve their assets and technology, maintain satisfactory their relationships with their customers, clients, lenders, suppliers, vendors licensors, licensees, distributors and others having material business relationships dealings with themthem and to maintain their franchises, rights and Permits. Without in any way limiting the generality of the foregoing, neither during the Company nor any period from the date of this Agreement to the Company Subsidiaries will Effective Time, except with the prior written consent of Parent (except which shall not be unreasonably delayed) or as expressly permitted or specifically contemplated by this Agreement, Agreement or as set forth in Section 5.1 4.01(a) of the Company Disclosure Schedule or Letter (with specific reference to the extent that Parent subsection of this Section 4.01 to which the information stated in such disclosure relates), the Company shall otherwise consent in writing (it being understood that Parent not, and shall respond within five Business Days to the Company’s communications soliciting such consent from Parent, such consent not be unreasonably withheld, conditioned or delayed)):permit any of its Subsidiaries to:
(i) (A) split, combine or reclassify any shares of its capital stock, (B) declare, set aside or pay any dividend dividends on, or make any other distribution distributions (whether in cash, stock, stock or property or any combination thereofproperty) in respect of, any of its capital stock or other equity or voting interests, except for dividends by a direct or indirect wholly owned Subsidiary of the Company to its parent, (B) split, combine or reclassify any of its capital 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, shares of its capital stock or other equity or voting interests, (C) purchase, redeem or otherwise acquire any shares of capital stock, and dividends other equity or distributions declared, set aside voting interests or paid by any Company Subsidiary to other securities of the Company or any of its Subsidiaries or any options, warrants, calls or rights to acquire any Company Subsidiary that issuch shares or other securities (including any Stock Options or RSUs, directly except pursuant to the forfeiture conditions of such Stock Options or indirectlyRSUs or the cashless exercise or tax withholding provisions of such Stock Options or RSUs, wholly owned in each case only if and to the extent required by the Company, terms of such awards as in effect on the date of this Agreement) or (CD) redeemtake any action that would result in any amendment, repurchase modification or otherwise acquire or offer to redeem, repurchase or otherwise acquire change of any term of any indebtedness of the Company Securities or any Company Subsidiary Securitiesof its Subsidiaries;
(ii) except for grants and awardsissue, in type and amount consistent with ordinary course past practicesdeliver, under the Company sell, pledge or otherwise encumber any (A) shares of its capital stock, other equity or voting interests or Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit to issue or sell Equivalents (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or equity equivalents (including, without limitation, stock appreciation rights) other than the issuance of shares of Company Common Stock (A) upon the exercise of Stock Options or rights under the ESPP and the settlement of RSUs, in each case outstanding as of the date of this Agreement and only if and to the extent required by the terms of the Company Stock Options outstanding Plans, as in effect on the date of this Agreement in accordance with their present terms and the provisions hereof and Agreement), or (B) upon the exercise of Company Warrants outstanding on the date of this Agreement in accordance with their present terms and the provisions hereofsecurities convertible into, or exchangeable or exercisable for, or any options, warrants, calls or rights to acquire, any such stock, interests or Equity Equivalents;
(iii) acquire amend or propose to amend its certificate of incorporation or bylaws (by merger, consolidation, acquisition of stock or assets or otherwisesimilar organizational documents), directly or indirectly, any assets, securities, properties, interests or businesses, in each case, other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items in the ordinary course of business of the Company and the Company Subsidiaries in a manner that is consistent with past practice;
(iv) sell, lease acquire or otherwise transferagree to acquire (A) by merging or consolidating with, or create by purchasing all or incur a substantial portion of the assets of, or by purchasing all or a substantial equity or voting interest in, or by any Encumbrance onother manner, any of the Company’s business or the Company Subsidiaries’ assets, securities, properties, interests person or businesses, division thereof or (B) any other assets other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights immaterial assets acquired in the ordinary course of business consistent with past practice;
(v) except in the ordinary course of business or pursuant to credit facilities or other arrangements (including intercompany arrangements) in existence as of the date of this Agreementsell, incur any amount of Indebtedness for borrowed moneylease, guarantee any Indebtedness of a third partylicense, issue or sell debt securitiesand lease back, make any loans, advances or capital contributions, mortgage, pledge mortgage or otherwise encumber any material assets, or create or suffer any material Encumbrance thereupon;
(vi) except (A) as set forth in Section 5.1(vi) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, or (B) pursuant subject to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof Lien or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course otherwise dispose of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers material properties or directors assets (including any shares of capital stock, equity or (III) any litigationvoting interests or other rights, arbitrationinstruments or securities), proceeding or dispute that relates to the Transaction;
(vii) change any of the accounting principles or practices used by it except as required by GAAP;
(viii) except for agreements existing as (i) grants of the date of this Agreement, enter into any agreement or engage in any transaction with one or more of the Company’s directors, officers or stockholders, 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases nonexclusive licenses in the ordinary course of business consistent with past practice, increase the compensation, bonus (ii) sales of inventory or other benefits of any director, officer or senior employee;
(x) (A) grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (B) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), or (C) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreement;
(xi) except to the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary;
(xii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger);
(xiii) (A) enter into any Contract that would constitute a Material Contract if it had been entered into as of the date of this Agreement or (B) amend, modify in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing used equipment in the ordinary course of business consistent with past practice and (iii) Permitted Liens incurred in the ordinary course of business consistent with past practice;
(vi) (A) repurchase, prepay or incur any Material Contracts indebtedness, including by way of a guarantee or an issuance or sale of debt securities, or issue and sell options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, enter into any "keep well" or other 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 (B) make any loans, advances or capital contributions to, or investments in, any other person, other than (1) to the Company or any direct or indirect wholly owned Subsidiary of the Company and (2) advances of travel and similar expenses to employees in the ordinary course of business consistent with past practice;
(vii) incur or commit to incur any capital expenditures, or any obligations or liabilities in connection therewith, that individually are scheduled in excess of $375,000 or in the aggregate are in excess of $750,000;
(viii) (A) pay, discharge, settle or satisfy any claims (including any claims of stockholders and any stockholder litigation relating to expire upon this Agreement, the Merger or any other 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 on the date of this Agreement, of claims, liabilities or obligations reserved against in the Baseline Financials (IIfor amounts not in excess of such reserves) entering into any client or customer Contracts incurred since the date of such financial statements in the ordinary course of business consistent with past practice or incurred in connection with the transactions contemplated in this Agreement, in each case, the payment, discharge, settlement or satisfaction of which does not include any obligation (except for those described other than the payment of money) to be performed by the Company or its Subsidiaries following the Closing 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 Sections 3.18(a)(xiany 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 or by which the Company or any of its Subsidiaries is a party or bound;
(ix) and enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), or modify or amend in any material respect, or exercise any right to renew, any lease or sublease of real property or acquire any interest in real property;
(x) modify or amend in any material respect, or accelerate, terminate or cancel, any Material Contract or waive any right to enforce, relinquish, release, transfer or assign any rights or claims thereunder, other than any immaterial modifications or amendments made in the ordinary course of business consistent with past practice;
(xi) enter into any Contract that is not in the ordinary course of business or that is inconsistent with past practice;
(xii) except as required to ensure that any Benefit Plan or Benefit Agreement in effect on the date of this Agreement is not then out of compliance with applicable Law, (A) adopt, establish, enter into, terminate, amend or modify any Benefit Plan or Benefit Agreement, (B) increase in any manner the compensation or benefits of, or pay any bonus or award to, or grant any loan to, any Company Personnel (other than advances of travel in the ordinary course of business consistent with past practice), (C) pay or provide to any Company Personnel any compensation or benefit not provided for which Parent’s prior written consent shall under a Benefit Plan or Benefit Agreement as in effect on the date of this Agreement, other than the payment of base compensation in the ordinary course of business consistent with past practice, (D) grant or amend any award under any Benefit Plan (including the grant or amendment of Stock Options, RSUs, restricted stock, stock appreciation rights, performance units, stock purchase rights or other equity or equity-based compensation) or remove or modify existing restrictions in any Benefit Plan or Benefit Agreement or awards made thereunder, (E) grant or pay any severance, separation, change in control, termination, retention or similar compensation or benefits to, or increase in any manner the severance, separation, change in control, termination, retention or similar compensation or benefits of, any Company Personnel, (F) enter into any trust, annuity or insurance Contract or similar agreement or take any other action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or Benefit Agreement, (G) take any action to accelerate, or that could reasonably be required)expected to result in the acceleration of, the time of payment or vesting of any rights, compensation, benefits or funding obligations under any Benefit Plan or Benefit Agreement or otherwise or (H) make any material determination under any Benefit Plan or Benefit Agreement that is inconsistent with the ordinary course of business or past practice;
(xiii) form any Subsidiary of the Company;
(xiv) enter into any new line Contract containing any provisions having the effect of businessproviding that the consummation of the Merger or the other transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, result in any violation or breach of, or constitute a default (with or without notice or lapse of time or both) under, such Contract, or give rise under such Contract to any right of, or result in, a termination, right of first refusal, material amendment, revocation, cancelation or material acceleration, or a loss of a material benefit or the creation of any material Lien upon any of the properties or assets of the Company, Parent or any of their respective subsidiaries, or to any increased, guaranteed, accelerated or additional rights or entitlements of any person, except to the extent such conflicts, results, defaults, rights, losses or entitlements are required by applicable Law;
(xv) 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;
(xvi) except as required by applicable Law, adopt or enter into any collective bargaining agreement or other labor union Contract applicable to the employees of the Company or any of its Subsidiaries;
(xvii) write-down any of its material assets, including any Intellectual Property, or make any change in any financial or tax accounting principle, method or practice, other than as required by GAAP or applicable Law;
(xviii) engage in (A) any trade loading practices or any other 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, in each case in this clause (D) in a capital expenditure manner outside the ordinary course of business or inconsistent with past practice;
(xix) take any action or fail to purchase a capital asset, take any action which expenditure action or purchase exceeds the amount or amounts allocated therefor as set forth failure to act would result in the budget related to such expenditures provided to Parent material loss or reduction in value of the Intellectual Property of the Company and its Subsidiaries, taken as a whole;
(xx) enter into, extend or renew (A) any Contract or amendment thereof which, if executed prior to the date of this Agreement, would have been required to have been disclosed pursuant to Section 3.01(i)(i)(A), (B), (C), (E), (F), (H), (J), (L), (N), (P), or (R), (B) any Contract or amendment thereof that grants any person the right or ability to access, license or use all or a material portion of the Intellectual Property of the Company and its Subsidiaries, other than in the ordinary course of business consistent with past practice or (C) any Contract providing for the services of any dealer, distributor, sales representative or similar representative; provided, however, that solely for purposes of this clause (C) (and not clauses (A) or (B) above) the Company may enter into, extend or renew any Contract providing for the services of any dealer, distributor, sales representative or similar representative; provided that, with respect to this clause (C), in each case (x) such entry, extension or renewal is in the ordinary course of business and is not inconsistent with past practice and (y) if the entry, extension or renewal is other than on standard terms and conditions, including any terms and conditions relating to geographic exclusivity, the Company shall have provided Parent with prior written notice of the material terms of the proposed Contract, extension or renewal and not less than 48 hours to comment on such terms;
(xvixxi) enter into an agreement any Contract or material amendment thereof which, if executed prior to the date of this Agreement, would have been disclosed pursuant to Section 3.01(i)(i)(G), (I), (K) or (Q), other than any Contract pursuant to which the Company or any of its Subsidiaries has been or is being granted a license to source code in the ordinary course of business of the Company and its Subsidiaries consistent with past practice;
(xxii) amend, modify or waive any of the Company's existing takeover defenses or take any action to render any state takeover or similar statute inapplicable to any transaction other than the Merger; or
(xxiii) authorize any of, or commit, resolve or agree to take any of of, the foregoing actions.
Appears in 1 contract
Samples: Merger Agreement (DemandTec, Inc.)
Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, except as otherwise contemplated by this Agreement or unless Parent shall otherwise consent in advance in writingAgreement, the Company shallshall use its commercially reasonable efforts to, and shall cause each of the Company Subsidiaries to use its commercially reasonable efforts to, carry on their respective businesses in the usual, regular and ordinary course, consistent with past practice or its current expense budgets as disclosed to Parentand in material compliance with all Laws, and, to the extent substantially consistent therewith, and use their commercially reasonable efforts to:
(a) Preserve to preserve intact their present business organizations,
(b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep keep available the services of their directors, present officers and key employeesemployees and preserve their goodwill, and
(d) Subject to the right of contract parties to exercise applicable rightsCompany’s status as a REIT, maintain satisfactory and their relationships with their customers, clients, lenders, suppliers, vendors and others having material business relationships dealings with them. The Company shall confer on a regular basis with Eagles, report on operational matters and advise Eagles orally and in writing of any Company Material Adverse Effect or any matter that could reasonably be expected to result in the Company being unable to deliver the certificate described in Section 7.3(a). Without limiting the generality of the foregoing, neither the Company nor any of the Company Subsidiaries will (except as expressly permitted by this Agreement or as contemplated by this Agreementthe transactions contemplated hereby, as set forth in Section 5.1 5.2 of the Company Disclosure Schedule or to the extent that Parent Eagles shall otherwise consent in writing (it being understood that Parent Eagles shall respond within five (5) Business Days to the Company’s communications soliciting such consent from ParentEagles, such consent not be unreasonably withheld, conditioned or delayed)):
(ia) (Ai) split, combine or reclassify any shares of its capital stock, stock of the Company or (Bii) declare, set aside or pay any dividend or other distribution (whether in cash, stock, or property or any combination thereof) in respect of any shares of capital stockstock of the Company, except for: (x) regular quarterly dividends to stockholders of the Company in an amount not to exceed 90% of the Company’s estimated REIT taxable income for such period, provided that such dividends do not exceed $0.03 per Share in any quarter, and (y) dividends or distributions distributions, declared, set aside or paid by any Company Subsidiary to the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned by the Company, or (C) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Company Securities or any Company Subsidiary Securities;
(iib) except for grants and awards, in type and amount consistent with ordinary course past practices, under the Company Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or equity equivalents (including, without limitation, stock appreciation rights) other than the (i) issuance of company common shares of Company Common Stock (A) upon the exercise of the Company Stock Options outstanding on the date of this Agreement in accordance with their present terms and or (ii) issuance of company common shares (or cash in an amount equal to the provisions hereof and (Bvalue thereof) upon the exercise settlement of Company Warrants outstanding on the date of this Agreement long term incentive awards and out performance plan awards in accordance with their present terms and the provisions hereofterms;
(iiic) acquire except as set forth in Section 5.2(c) of the Company Disclosure Schedule (which sets forth all existing obligations in effect to purchase or sell mortgage loans and the purchases or sale price thereof), acquire, sell, encumber, transfer or dispose of any assets outside the ordinary course of business which are material to the Company or any of the Company Subsidiaries (whether by mergerasset acquisition, consolidation, stock acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, in each case, other than licenses ;
(d) except for the renewal of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items repurchase agreements in the ordinary course of business of the Company and the Company Subsidiaries in a manner that is consistent with past practice;
(iv) sell, lease or otherwise transfer, or create or incur any Encumbrance on, any of the Company’s or business (provided that the Company Subsidiaries’ assets, securities, properties, interests or businesses, other than the sale of equipment, products shall have consulted in advance with Eagles regarding such renewal and services and the licensing of Owned Intellectual Property Rights in the ordinary course of business consistent with past practice;
(v) except in the ordinary course of business or pursuant to credit facilities or other arrangements (including intercompany arrangements) in existence as of the date of this Agreementshall not effect such renewal if Eagles reasonably objects), incur any amount of Indebtedness for borrowed money, guarantee assume, guarantee, indemnify or endorse or otherwise become directly or indirectly responsible or liable for any Indebtedness of a third party, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assets, or create or suffer any material Encumbrance lien thereupon;
(vie) except pursuant to any mandatory payments under any credit facilities in existence on the date hereof, pay, discharge or satisfy any claims, liabilities or obligations (Aabsolute, accrued, asserted or unasserted, contingent or otherwise), other than any payment, discharge or satisfaction in the ordinary course of business consistent with past practice;
(f) change any of the accounting principles or practices used by it (except as required by GAAP, in which case written notice shall be provided to Eagles prior to any such change);
(g) (i) enter into, adopt, amend or terminate any Employee Program, (ii) enter into, adopt, amend or terminate any agreement, arrangement, plan or policy between Eagles or any of the Eagles Subsidiaries and one or more of their directors or executive officers, or (iii) except for normal increases in the ordinary course of business consistent with past practice, increase in any manner the compensation or fringe benefits of any non-executive officer or employee or pay to any non-executive officer or employee any benefit not required by any Employee Program or arrangement as in effect as of the date hereof;
(h) grant to any officer, director or employee the right to receive any new severance, change of control or termination pay or termination benefits, grant any increase in the right to receive any severance, change of control or termination pay or termination benefits or enter into any new employment, loan, retention, consulting, indemnification, termination, change of control, severance or similar agreement with any officer, director or employee other than the grant of compensation and fringe benefits to any non-executive officer or employee hired after the date of this Agreement;
(i) except to the extent required to comply with its obligations hereunder or with applicable law, amend its articles of incorporation or bylaws, limited partnership or limited liability company agreements, or similar organizational or governance documents;
(j) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger or plans of complete or partial liquidation or dissolution of inactive Company Subsidiaries);
(k) except as set forth in Section 5.1(vi5.2(k) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, settle or compromise any litigation (B) pursuant whether or not commenced prior to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof of this Agreement) other than settlements or entered into compromises for litigation where the amount paid (after giving effect to insurance proceeds actually received) in compliance with settlement or compromise does not exceed $100,000 (or $500,000 in the terms hereof, pay, discharge, satisfy outside aggregate) and which would not have or would not reasonably be likely to have a Company Material Adverse Effect;
(l) amend any term of any outstanding security of the Company or any Company Subsidiary;
(m) other than in the ordinary course of business, settle enter into any Material Contract or offer modify or propose amend any Material Contract to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against which the Company or any Company SubsidiarySubsidiary is a party or waive, release or assign any material rights or claims under any such Material Contract;
(IIn) permit any stockholder litigation or claim in writing against insurance policy naming the Company or any of its subsidiaries or officers or directors as a beneficiary or (III) any litigationan insured or a loss payable payee, arbitrationor the Company’s directors and officers liability insurance policy, proceeding to be canceled, terminated or dispute that relates allowed to expire, unless such entity shall have obtained an insurance policy with substantially similar terms and conditions to the Transactioncanceled, terminated or expired policy;
(viio) except as expressly required for change in law or regulation, change any of the accounting principles or practices used by it except as required by GAAPits methods of reporting income and deductions for Federal income tax purposes, but only if such change would reasonably be expected to have a Company Material Adverse Effect;
(viiip) except for agreements existing as create, renew or amend, or take any action that may result in the creation, renewal or amendment, of the date of this Agreement, enter into any agreement or engage in contract or other binding obligation of the Company or any transaction with one Company Subsidiary containing any material restriction on the ability of the Company or more of the Company’s directors, officers Subsidiary to conduct its business as it is presently being conducted; or
(q) take any action inconsistent with the Interim Management Agreement or stockholders, or with omit to take 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control withaction contemplated thereby;
(ixr) except as required by Law make or rescind any Tax election or settle or compromise any Tax liability of the Company or any contractual commitment or Employee Program in existence on the date hereof, and except for increases in the ordinary course of business consistent with past practice, increase the compensation, bonus or other benefits of any director, officer or senior employeeits subsidiaries;
(xs) (A) grant to amend any director, officer or employee the right to receive any new severanceTax Return, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (B) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), or (C) establishan annual Tax accounting period, adopt or amend change any Tax accounting method (except as required by applicable law) or execute or consent to any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock waivers extending the statutory period of limitations with respect to the collection or other benefit plan or agreementassessment of any taxes;
(xit) except to take any action that would prevent or impede the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylawsMerger from qualifying as a reorganization under Code Section 368(a); or
(u) authorize any of, or commit or agree to take any of, the certificate of formation, limited partnership foregoing actions or limited liability company agreements, or similar charter, organizational or governance documents any action that would result in a breach of any representation or warranty of the Company Subsidiary;
(xii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger);
(xiii) (A) enter into any Contract that would constitute a Material Contract if it had been entered into contained in this Agreement as of the date when made or as of this Agreement any future date or (B) amend, modify would result in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing in the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (II) entering into any client or customer Contracts in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required);
(xiv) enter into any new line of business;
(xv) enter into any Contract to make a capital expenditure or to purchase a capital asset, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth in the budget related to such expenditures provided to Parent prior to the date of this Agreement;
(xvi) enter into an agreement to take any of the foregoing actionsconditions to the Merger not being satisfied or in a material delay in the satisfaction of such conditions. Notwithstanding the foregoing, the Company and its subsidiaries may take any action authorized by the Manager pursuant to the Interim Management Agreement and no action by the Manager shall be deemed a violation of Article IV or this Section 5.2.
Appears in 1 contract
Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, except as otherwise contemplated by this Agreement set forth in Section 4.01(a) of the Company Disclosure Schedule or unless Parent shall otherwise consent as consented to in writing in advance in writingby 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 the Company its Subsidiaries to, carry on their respective businesses its business (including making maintenance expenditures) in the usual, regular and ordinary course, course consistent with past practice or its current expense budgets as disclosed to Parentand in compliance in all material respects with all applicable laws, rules, regulations and treaties and, to the extent substantially consistent therewith, use their all commercially reasonable efforts to:
(a) Preserve to preserve intact their present its current business organizations,
(b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep keep available the services of their directorsits current officers, officers employees and key employees, and
(d) Subject to the right of contract parties to exercise applicable rights, maintain satisfactory consultants and preserve its relationships with their customers, clients, lenders, suppliers, vendors suppliers and others having material business relationships dealings with themit with the intention that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without In addition to and without limiting the generality of the foregoing, neither during the Company nor any period from the date of this Agreement to the Company Subsidiaries will (Effective Time, except as expressly permitted or contemplated by this Agreement, as otherwise set forth in Section 5.1 4.01(a) of the Company Disclosure Schedule or as otherwise expressly permitted by or required pursuant to this Agreement, the extent that Parent Company shall otherwise consent in writing (it being understood that Parent not, and shall respond within five Business Days to the Companynot permit any of its Subsidiaries to, without Parent’s communications soliciting such consent from Parent, such consent not be unreasonably withheld, conditioned or delayed)):prior written consent: Table of Contents
(i) (A) split, combine or reclassify any shares of its capital stock, (Bx) declare, set aside or pay any dividend dividends on, or make any other distribution distributions (whether in cash, stock, or property or any combination thereofotherwise) in respect of, any of 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 of its Capital Stock, or issue or authorize the issuance of any shares other securities in respect of, in lieu of capital stock, and dividends or distributions declared, set aside or paid by any Company Subsidiary to the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned by the Company, in substitution for its Capital Stock or (Cz) redeempurchase, repurchase or otherwise acquire or offer to redeem, repurchase redeem or otherwise acquire any Company Securities shares of 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 Subsidiary Securitiesin connection with the forfeiture of any Company Stock Options or Company Restricted Shares outstanding on the date hereof and (B) the Convertible Notes;
(ii) except for grants and awardsissue, in type and amount consistent with ordinary course past practicesdeliver, under the Company Equity Incentive Plansell, as amendedgrant, in connection with new hires and promotionspledge or otherwise encumber or subject to any Lien any of its Capital Stock or any securities convertible into, authorize for issuanceor exchangeable for, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of optionsany rights, warrants, commitmentscalls or options to acquire, subscriptionsany such Capital Stock or convertible or exchangeable securities, rights to purchase or otherwise) any stock of any class or any other securities or equity equivalents (including“phantom” stock, without limitation“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 Contracts as in effect on the date hereof (other than (A) the issuance of shares of Company Common Stock (A) upon the exercise of Company Stock Options outstanding on the date of this Agreement hereof in accordance with their present terms and on the provisions date hereof and (B) upon the exercise issuance of shares of Company Warrants outstanding on Common Stock upon conversion of the date of this Agreement in accordance with their present terms and the provisions hereofConvertible Notes);
(iii) amend the Company Certificate or the Company Bylaws or other comparable charter or organizational documents of any of the Company’s Subsidiaries except as may be required by the SEC or the Nasdaq Global Market;
(iv) directly or indirectly acquire (x) by mergermerging or consolidating with, consolidationor by purchasing assets of, acquisition or by any other manner, any person or division, business or equity interest of stock any person or (y) other than capital expenditures permitted by clause (vii) below or deferred taxes, (A) any non-current asset or assets or otherwise)that, directly or indirectlyindividually, any assets, securities, properties, interests or businesseshas a purchase price in excess of $75,000 or, in each casethe aggregate, other than licenses have a purchase price in excess of Licensed Intellectual Property Rights, inventory, supplies, equipment $500,000 and other similar items in (B) current assets acquired outside the ordinary course of business of the Company and the Company Subsidiaries or in a manner that is consistent with past practice;
(iv) sell, lease or otherwise transfer, or create or incur any Encumbrance on, any of the Company’s or the Company Subsidiaries’ assets, securities, properties, interests or businesses, other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights in the ordinary course of business consistent inconsistent with past practice;
(v) except in the ordinary course of business directly or pursuant to credit facilities or other arrangements indirectly (including intercompany arrangementsx) in existence as of the date of this Agreementsell, incur any amount of Indebtedness for borrowed moneylease, guarantee any Indebtedness of a third party, issue or sell debt securities, make any loans, advances or capital contributionslicense, mortgage, pledge sell and leaseback or otherwise encumber any material assets, or create or suffer any material Encumbrance thereupon;
(vi) except (A) as set forth in Section 5.1(vi) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, or (B) pursuant subject to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof Lien or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course otherwise dispose of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers properties or directors other assets or any interests therein (III) any litigation, arbitration, proceeding or dispute that relates to the Transaction;
(vii) change any of the accounting principles or practices used by it except as required by GAAP;
(viii) except for agreements existing as of the date of this Agreement, enter into any agreement or engage in any transaction with one or more of the Company’s directors, officers or stockholders, or with any corporation, partnership (general or limitedincluding securitizations), limited liability company, association or other organization of which one or more of the Company’s directors, officers or stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases in the ordinary course of business consistent with past practice, increase the compensation, bonus or other benefits of any director, officer or senior employee;
(x) (A) grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (B) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), or (C) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreement;
(xi) except to the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary;
(xii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger);
(xiii) (A) enter into any Contract that would constitute a Material Contract if it had been entered into as sales of the date of this Agreement or (B) amend, modify in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing inventory and 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 Material Contracts of the Company’s subsidiaries’ operations or (y) enter into, modify or amend any lease of property, except for modifications or amendments that are scheduled not adverse in any material respect to expire upon their terms the Company or any of its Subsidiaries; Table of Contents
(IIvi) entering (x) incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, 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, guarantee any debt securities of another person, enter into any client “keep well” or customer Contracts other 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 (A) short-term borrowings incurred in the ordinary course of business consistent with past practice not to exceed $1,000,000 at any time outstanding, (except B) letters of credit issued to support payment obligations in respect of equipment for those described in Sections 3.18(a)(xi) the St. Xxxxxxx expansion project with an aggregate face value not to exceed $50,000,000 at any time outstanding and (xii), for which Parent’s prior written consent shall be required);
(xivC) enter into any new line letters of business;
(xv) enter into any Contract to make a capital expenditure or to purchase a capital asset, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth credit issued in the budget related ordinary course of business consistent with past practice to such expenditures provided support payment obligations under sales contracts with an aggregate face value not to Parent prior exceed $10,000,000 at any time outstanding, (y) make any loans, advances or capital contributions to, or investments in, any other person (other than extensions of trade credit in the ordinary course of business 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;
(xvivii) enter into an agreement to take make any capital expenditure, other than (A) normal recurring capital expenditures which, in the aggregate, are not in excess of $18,000,000 for 2007 and (B) capital expenditures for the St. Xxxxxxx expansion project in accordance with Section 4.01(a)(vii) of the foregoing actions.Company Disclosure Schedule; provided that, notwithstanding and in addition to the foregoing, the Company may 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 such purchase) does not exceed the number of chlorine rail cars owned and leased by the Company as of the date of this Agreement;
Appears in 1 contract
Samples: Merger Agreement (Olin Corp)
Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, except as otherwise contemplated by this Agreement or unless Parent shall otherwise consent in advance in writingAgreement, the Company shallshall use its commercially reasonable efforts to, and shall cause each of the Company Subsidiaries to use its commercially reasonable efforts to, carry on their respective businesses in the usual, regular and ordinary course, consistent with past practice or its current expense budgets as disclosed to Parent, and, to the extent substantially consistent therewith, use their commercially reasonable efforts to:
(a) Preserve to preserve intact their present business organizations,
(b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep keep available the services of their directors, present officers and key employees, and
(d) Subject to the right of contract parties to exercise applicable rights, maintain satisfactory employees and preserve their relationships and goodwill with their Governmental Entities and its clients and customers, clients, lenders, suppliers, vendors and others having material business relationships with them. Without limiting the generality of the foregoing, neither the Company nor any of the Company Subsidiaries will (except as expressly permitted or contemplated by this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule or to the extent that Parent shall otherwise consent in writing (writing; it being understood that Parent shall respond within five (5) Business Days to the Company’s communications soliciting such consent from Parent, and such consent not be unreasonably withheld, conditioned or delayed)):
(a) (i) (A) redeem, split, combine or reclassify or otherwise retire or acquire, any shares of its capital stockstock or other equity interest of the Company or any of the Company Subsidiaries (other than Company Subsidiaries that are wholly owned by the Company) or any rights with respect thereto, any security convertible into or representing a right to acquire such shares of the Company or any of the Company Subsidiaries (Bother than Company Subsidiaries that are wholly owned by the Company), or enter into any agreement, call or commitment of any character that would obligate it to do any of the foregoing, in each case, except as required to consummate the Transaction or (ii) authorize, declare, set aside or pay any dividend or other distribution distribution; (whether in cash, stock, assets or property or any combination thereof) in respect of any shares of capital stockstock of the Company, and except for dividends or distributions declared, set aside or paid by any Company Subsidiary to the Company or to any Company Subsidiary that is, directly or indirectly, wholly wholly-owned by the Company, or (C) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Company Securities or any Company Subsidiary Securities;
(iib) except for grants and awards, in type and amount consistent with ordinary course past practices, under the Company Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or equity equivalents (including, without limitation, stock appreciation rights) other than the issuance of shares of Company Common Stock (Ai) upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof and (Bii) upon the exercise of Company Warrants outstanding on the date of this Agreement in accordance with commitments to issue such shares under any long-term incentive plan awards in accordance with their present terms and the provisions hereof;
(iiic) except as set forth on Schedule 5.1(c) acquire any entity, business or assets (whether by asset acquisition, stock acquisition, merger, consolidationconsolidation or otherwise) exceeding $2.5 million in the aggregate or sell any entity, acquisition of stock business or assets (whether by asset acquisition, stock acquisition, merger, consolidation or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses) exceeding $2.5 million in the aggregate, in each case, case other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items in the ordinary course of business of the Company and the Company Subsidiaries in a manner that is consistent with past practicebusiness;
(ivd) sell, lease or otherwise transfer, or create or incur any Encumbrance on, any of the Company’s or the Company Subsidiaries’ assets, securities, properties, interests or businesses, other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights except (i) in the ordinary course of business business; (ii) pursuant to the Senior Credit Documents; (iii) vehicle finance facilities (including capitalized leasing facilities); (iv) intercompany arrangements exclusively among the Company and the wholly-owned Company Subsidiaries; or (v) credit card obligations that are not delinquent consistent with past practice;
, incur or assume any Indebtedness for borrowed money (including any guarantee of Indebtedness of a third party) in excess of $3 million in the aggregate; provided, that other than (i) pursuant to clauses (i) and (v) except in of this Section 5.1(d) and (ii) the ordinary course of business or pursuant to credit facilities or other arrangements (including intercompany arrangements) Senior Credit Documents and any hedging obligations in existence as of the date of this Agreementhereof, incur any the aggregate amount of Indebtedness for borrowed money, guarantee permitted to exist shall not exceed $45 million (other than the Senior Credit Documents and any Indebtedness hedging obligations in existence as of a third party, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assets, or create or suffer any material Encumbrance thereuponthe date hereof );
(vie) except (A) as set forth in Section 5.1(vi) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, create or (B) pursuant to assume any mandatory payments (including cash sweep arrangements) under any credit facilities in existence Encumbrance or lien on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding assets other than Encumbrances securing Indebtedness permitted by paragraph (d) or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the TransactionPermitted Liens;
(viif) settle any individual claim or series of related claims exceeding $5 million in the aggregate; provided, that this Section 5.1(f) shall not affect the Company ability to settle individual claims or a series of related claims not exceeding $100,000 individually;
(g) change any of the accounting principles or practices (or change an annual accounting period) used by it except as required by GAAP;
(viii) except for agreements existing as of the date of this Agreement, enter into any agreement or engage in any transaction with one or more of the Company’s directors, officers or stockholders, 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ixh) except as required by Law or any written contractual commitment or (including any commitment imposed by the terms of any Employee Program as in existence effect on the date hereof), and increase the compensation or benefits of any director, executive officer, division President or Vice President that reports directly to a division President or, except for increases in the ordinary course of business consistent with past practice, increase the compensation, bonus any other employees or other benefits of any director, officer consultant or senior employeeindependent contractor performing similar services;
(xi) (A) except as set forth on Schedule 5.1(i), grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (Bin excess of $500,000 in the aggregate for all such Persons, provided that it will not constitute a violation of this Section 5.1(i) to enter into any employment, deferred compensation indemnification agreements with directors and officers in the form historically used by the Company or other similar agreement (or amend any such existing agreement), or (C) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreementto pay severance to terminated employees in the ordinary course of business consistent with past practice;
(xij) except to the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any (other than such amendments exclusively involving Company SubsidiarySubsidiaries that are wholly owned by the Company and for tax, corporate organizational or other business purposes and that do not have a material adverse impact on the Company and the Company Subsidiaries taken as a whole);
(xiik) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the MergerMerger or plans of complete or partial liquidation or dissolution of inactive Company Subsidiaries or other than other similar transactions or amendments exclusively involving Company Subsidiaries that are wholly owned by the Company and for tax, corporate organizational or other business purposes and that do not have a material adverse impact on the Company and the Company Subsidiaries taken as a whole);
(xiiil) (A) enter into any Contract that would constitute a Material Contract if it had been entered into as of the date of this Agreement or (B) amend, modify in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing other than in the ordinary course of business consistent or as required by applicable Law, in which case written notice shall be provided to Parent and Merger Sub prior to any such change (i) make, change or rescind any Tax election or change any method of accounting, (ii) enter into any settlement or compromise of any Tax liability, (iii) file any amended Tax Return with past practice respect to any Material Contracts that are scheduled Tax, (iv) enter into any closing agreement relating to expire upon their terms any Tax, (v) surrender any right to claim a material Tax refund, or (IIvi) entering into any client waive or customer Contracts extend the statute of limitations in respect of Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be requiredbusiness);
(xivm) except as not otherwise prohibited in this Section 5.1, enter into into, materially amend or terminate or consent to the termination of any new line of business;
(xv) enter into Material Contract or any contract, agreement or understanding that would be a Material Contract to make a capital expenditure or to purchase a capital asset, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth if in the budget related to such expenditures provided to Parent prior to effect on the date of this Agreement;
(xvin) make any earnout payments under the Company’s acquisition agreements listed in Sections 3.3(a), 3.3(d)(i) and 3.3(d)(ii) of the Company Disclosure Schedule in a form of consideration other than in cash;
(o) amend, modify or waive any of the Company’s existing takeover defenses or take any action to render any state takeover or similar statute inapplicable to any transaction other than the Transaction;
(p) make any capital expenditures other than (i) in accordance with the Company’s budget, (ii) such capital expenditures for vehicle lease facilities not prohibited under Section 5.1(d), and (ii) such capital expenditures as do not exceed the Company’s budget by $5,000,000 more than in the aggregate; or
(q) authorize or enter into an agreement agreement, contract or understanding or otherwise make any arrangement or commitment to take any of the foregoing actions.
Appears in 1 contract
Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, except as otherwise contemplated by this Agreement set forth in Section 4.01(a) of the Company Disclosure Schedule or unless Parent shall otherwise consent as consented to in writing in advance in writingby Parent or as otherwise permitted pursuant to Section 4.01(a)(i) through (xv) of this Agreement, the Company shall, and shall cause each of the Company its Subsidiaries to, carry on their respective businesses its business in the usual, regular and ordinary course, course consistent with past practice or its current expense budgets and as disclosed currently proposed by the Company to Parentbe conducted prior to the Closing (including in respect of research, development and clinical trial activities and programs) and shall use commercially reasonable efforts to carry on such business in compliance in all material respects with all applicable laws, rules, regulations and treaties and, to the extent substantially consistent therewith, use their all commercially reasonable efforts to:
(a) Preserve to preserve intact their present its current business organizations,
(b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep keep available the services of their directorsits current officers, officers employees and key employees, and
(d) Subject to the right of contract parties to exercise applicable rights, maintain satisfactory consultants and preserve its relationships with their customers, clients, lenders, suppliers, vendors licensors, licensees, distributors and others having material business relationships dealings with themit with the intention that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without In addition to and without limiting the generality of the foregoing, neither during the Company nor any period from the date of this Agreement to the Company Subsidiaries will (Effective Time, except as expressly permitted or contemplated by this Agreement, as otherwise set forth in Section 5.1 4.01(a) of the Company Disclosure Schedule or to Schedule, the extent that Parent Company shall otherwise consent in writing (it being understood that Parent not, and shall respond within five Business Days to the Companynot permit any of its Subsidiaries to, without Parent’s communications soliciting such consent from Parent, such consent not be unreasonably withheld, conditioned or delayed)):prior written consent:
(i) (A) split, combine or reclassify any shares of its capital stock, (Bx) declare, set aside or pay any dividend dividends on, or make any other distribution distributions (whether in cash, stock, stock or property or any combination thereofproperty) in respect of, any of any shares of its capital stock, and other than dividends or distributions declared, set aside by a direct or paid by any Company indirect wholly owned Subsidiary to of the Company to its shareholders, (y) split, combine or to reclassify any Company Subsidiary that isof its capital stock or issue or authorize the issuance of any other securities in respect of, directly in lieu of or indirectly, wholly owned by the Company, in substitution for shares of its capital stock or (Cz) redeempurchase, repurchase or otherwise acquire or offer to redeem, repurchase redeem or otherwise acquire any Company Securities shares of its capital stock or any other securities thereof or any 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 or, in the case of the repurchase of Company Subsidiary SecuritiesRestricted Shares in connection with forfeitures, permitted under the terms of any plans, arrangements or other 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 such plans, arrangements or other Contracts (or, with respect to Company Stock Options, forms of stock option agreements) have been heretofore made available to Parent);
(ii) except for grants and awardsissue, in type and amount consistent with ordinary course past practicesdeliver, under the Company Equity Incentive Plansell, as amendedgrant, in connection with new hires and promotionspledge or otherwise encumber or subject to any Lien any shares of its capital stock, authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class other voting securities or any other securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or equity equivalents (includingconvertible securities, without limitationor any “phantom” stock, “phantom” stock rights, stock appreciation rights) rights or stock based performance units, including pursuant to Contracts as in effect on the date hereof (other than (x) the issuance of shares of Company Common Stock (A) upon the exercise of Company Stock Options outstanding on the date of this Agreement hereof in accordance with their present terms and on the provisions date hereof and (By) upon the exercise issuance of Company Warrants shares pursuant to rights outstanding under the ESPP on the date of this Agreement hereof, in accordance with their present terms and as of the provisions date hereof, subject to Section 5.04(b));
(iii) acquire (by merger, consolidation, acquisition amend the Company Certificate or the Company Bylaws or other comparable charter or organizational documents of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, in each case, other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items in the ordinary course of business of the Company Company’s Subsidiaries, except as may be required by law or the rules and regulations of the Company Subsidiaries in a manner that is consistent with past practiceSEC or The Nasdaq Stock Market, LLC and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(iv) sell, lease directly or otherwise transferindirectly acquire (x) by merging or consolidating with, or create by purchasing assets of, or incur by any Encumbrance onother manner, any person or division, business or equity interest of any person (other than immaterial equity interests which do not impose any obligations on the Company or any of its Subsidiaries acquired in connection with the normal cash management activities of the Company’s Company and its Subsidiaries) or (y) any asset or assets that, individually, has a purchase price in excess of $100,000 or, in the Company Subsidiaries’ assetsaggregate, securitieshave a purchase price in excess of $250,000, propertiesexcept for new capital expenditures, interests which shall be subject to the limitations of clause (vii) below, and except for purchases of components, raw materials or businesses, other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights supplies in the ordinary course of business consistent with past practice;
(v) (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 or any interests therein (including securitizations), except for sales of inventory and used equipment in the ordinary course of business consistent with past practice or pursuant (y) enter into, modify or amend any lease of real property, except for modifications or amendments that are not materially adverse to credit facilities or other arrangements the Company and its Subsidiaries taken as a whole;
(including intercompany arrangementsvi) in existence as of the date of this Agreement, (x) incur any amount of Indebtedness indebtedness for borrowed money, money or guarantee any Indebtedness such indebtedness of a third partyanother person, issue or sell any debt securitiessecurities or calls, options, warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another person, enter into any “keep well” or other Contract to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing or (y) make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assetscontributions to, or create or suffer investments in, any material Encumbrance thereupon;
(vi) except other person, other than (A) as set forth to employees in Section 5.1(vi) respect of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor travel or other related expenses in the most recent balance sheet of the Company set forth in the Company SEC Reports, or (B) pursuant to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course of business, settle or offer or propose to settle, business consistent with past practice and (IB) acquisitions of immaterial equity interests which do not impose any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against obligations on the Company or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to Subsidiaries in connection with the Transactionnormal cash management activities of the Company and its Subsidiaries;
(vii) change make any of new capital expenditure or expenditures, other than those which, individually, is less than or equal to $250,000 or, in the accounting principles aggregate, are less than or practices used by it except as required by GAAPequal to $1,000,000;
(viii) except as required by any Legal Provision or for agreements existing as those capital expenditures permitted under Section 4.01(a)(vii), (v) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (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 in accordance with their terms, of liabilities disclosed, reflected or reserved against in the most recent financial statements (or, if applicable, the notes thereto) of the Company included in the Filed Company SEC Documents (for amounts not in excess of such reserves) or incurred since the date of this Agreement, enter into any agreement or engage in any transaction with one or more of the Company’s directors, officers or stockholders, 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect such financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases statements in the ordinary course of business consistent with past practice, increase (w) cancel any indebtedness, (x) waive or assign any claims or rights of substantial value or (y) waive any benefits of, or agree to modify in any respect, or, subject to the compensationterms hereof, bonus fail to enforce, or other consent to any 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 or (z) 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 to which the Company or any of any director, officer or senior employeeits Subsidiaries is a party;
(x) (A) grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (B) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), or (C) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreement;
(xi) except to the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary;
(xii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger);
(xiii) (A) enter into any Contract that would constitute a Material Contract if it had been entered into as of the date of this Agreement or (B) amend, modify in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing in the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (II) entering into any client or customer Contracts and for an amount which is less than $1,000,000 in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii)aggregate, for which Parent’s prior written consent shall be required);
(xiv) enter into any new line Contracts relating to research, clinical trial, development, distribution, sale, supply, license, marketing, co-promotion or manufacturing by third parties of business;
products (xvincluding products under development) enter into any Contract to make a capital expenditure or to purchase a capital asset, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth in the budget related to such expenditures provided to Parent prior to the date of this Agreement;
(xvi) enter into an agreement to take any of the foregoing actions.Company or any Subsidiary of the Company or products (including products under development) licensed by the Company or any Subsidiary of the Company, or the Intellectual Property Rights of the Company or any Subsidiary of the Company or (y) initiate, launch or commence any sale, marketing, distribution, co-promotion or any similar activity with respect to any new product (including products under development) in or outside the United States;
Appears in 1 contract
Conduct of Business by the Company. During Except (i) as set forth in Section 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 to and continuing until the earlier of the termination of this Agreement or the Effective Time, except as otherwise contemplated by this Agreement or unless Parent shall otherwise consent in advance in writing, the Company shall, and shall cause each of the Company its Subsidiaries to, carry on their respective businesses in the usual, regular and ordinary course, course consistent with past practice and in compliance in all material respects with all applicable laws and regulations, pay their respective debts and Taxes when due, pay or its current expense budgets as disclosed to Parentperform their other respective obligations when due, and, to the extent substantially consistent therewith, use their all commercially reasonable efforts to:
(a) Preserve consistent with the other terms of this Agreement to preserve intact their present current business organizations,
(b) Maintain in effect , use all commercially reasonable efforts consistent with the other terms of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep this Agreement to keep available the services of their directors, current officers and key employees, and
(d) Subject to the right of contract parties to exercise applicable rights, maintain satisfactory Employees and preserve their relationships with their customers, clients, lenders, suppliers, vendors and others those Persons having material business relationships 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, neither senior officers of Parent and the Company nor any shall meet on a reasonably regular basis to review the financial and operational affairs of the Company Subsidiaries will 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 (except as i) expressly permitted or contemplated by this Agreement, as set forth (ii) disclosed in Section 5.1 4.1 of the Company Disclosure Schedule or Schedule, (iii) consented to the extent that in advance by Parent shall otherwise consent in writing or (it being understood that Parent iv) except as required by applicable law or regulation, after the date hereof the Company shall respond within five Business Days to the Company’s communications soliciting such consent from Parentnot, such consent and shall not be unreasonably withheld, conditioned or delayed)):permit any of its Subsidiaries to:
(i) (A) split, combine other than dividends and distributions by a direct or reclassify any shares indirect wholly owned Subsidiary of the Company to its capital stockparent, (Bx) declare, set aside or pay any dividend or dividends on, make any other distribution (whether distributions in cash, stockrespect of, or property or enter into any combination thereofagreement with respect to the voting of, any of 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 respect of any shares of capital stockthe past, and dividends or distributions declaredprovided that in no event shall the Company declare, set aside or paid by any Company Subsidiary to pay dividends on the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned by Common Stock if such action would result in the Company, or (C) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Company Securities or any Company Subsidiary Securities;
(ii) except for grants and awards, in type and amount consistent with ordinary course past practices, under the Company Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or equity equivalents (including, without limitation, stock appreciation rights) other than the issuance of shares 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 (Awithout 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, or in substitution for, shares of its capital stock, except upon the exercise of Company Stock Options that are outstanding on as of the date of this Agreement hereof in accordance with their present terms and terms, or (z) purchase, redeem or otherwise acquire any shares of capital stock or other securities of the provisions hereof and Company or any of its Subsidiaries, or any rights, warrants or options to acquire any such shares or other securities;
(Bii) issue, grant, deliver, sell, pledge or otherwise encumber or subject to any Lien (other than Company Permitted Liens) any shares of its capital 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 Warrants Stock Options that are outstanding on as of the date of this Agreement hereof in accordance with their present terms and the provisions hereofterms;
(iii) acquire (by mergeramend its certificate of incorporation, consolidation, acquisition of stock bylaws or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, in each case, other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items in the ordinary course of business of the Company and the Company Subsidiaries in a manner that is consistent with past practicecomparable organizational documents;
(iv) sell(A) acquire or agree to acquire by merging or consolidating with, lease or by purchasing any assets or any equity securities of, or by any other manner, any business or any Person, or otherwise transfer, acquire or create or incur agree to acquire any Encumbrance on, any of the Company’s or the Company Subsidiaries’ assets, securities, properties, interests or businesses, other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights assets except in the ordinary course of business consistent with past practicepractice (but subject to clause (xxi) below with respect to purchasing or selling any 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 action or (C) enter into any new line of business;
(v) except sell, 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 other than securitizations and other transactions in the ordinary course of business or pursuant to credit facilities or other arrangements (including intercompany arrangements) in existence as of the date of this Agreement, incur any amount of Indebtedness for borrowed money, guarantee any Indebtedness of a third party, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assets, consistent with past practices or create any security interest in such assets or suffer any material Encumbrance thereuponproperties (other than Company Permitted Liens);
(vi) except for the incurring of Permitted Deposit Liabilities (Aas defined below) as set forth in Section 5.1(vi) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, or (B) pursuant to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the Transaction;
(vii) change any of the accounting principles or practices used by it except as required by GAAP;
(viii) except for agreements existing as of the date of this Agreement, enter into any agreement or engage in any transaction with one or more of the Company’s directors, officers or stockholders, 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases in the ordinary course of business consistent with past practice, increase incur any Indebtedness for borrowed money (including any Federal Home Loan Bank borrowings or advances) or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for the compensation, bonus or other benefits obligations of any director, officer or senior employee;
(x) (A) grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (B) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), or (C) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreement;
(xi) except to the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary;
(xii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization Person (other than the Merger);
(xiiiCompany or any wholly owned Subsidiary thereof) (A) or enter into any Contract that would constitute a Material Contract if it had been entered into as of the date of this Agreement or (B) amendrepurchase agreements, modify in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waiveor, release or assign any material rights, claims or benefits of the Company or any Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing other than in the ordinary course of business consistent with past practice, make any loans, advances or capital contributions to, or investments in, any Person other 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 underlying 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 Material Contracts of its methods of reporting income and deductions for Federal 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, 2003, except as required by changes in law or regulation or as contemplated in Section 4.4 of this Agreement;
(viii) change in any 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 are scheduled 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 expire upon their terms conduct its business as it is presently being conducted or (IIB) entering any restriction on the Company or its Subsidiaries engaging in any type or activity or business;
(xi) (A) incur any capital expenditures in excess of $25,000 individually or $100,000 in the aggregate, other than pursuant to binding commitments existing on the date hereof and listed in 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 client 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 the type described in Section 3.1(f) or Section 3.1(y) of this Agreement;
(xii) terminate, amend or otherwise modify, except in the ordinary course of business 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;
(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 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 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 Contracts 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 claim, action, litigation, arbitration or proceeding, other than any such payment, discharge, settlement or compromise that involves solely money damages in an 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 (except for those described in Sections 3.18(a)(xiincluding its deposit pricing policies) that do not materially change the risk profile of the Company and its Subsidiaries (xii), for which Parent’s prior written consent it being understand that "ordinary course of business" shall not be requireddeemed to include non-retail or "jumbo" certificates of deposit or Brokered Deposits) ("PERMITTED DEPOSIT LIABILITIES");
(xivxix) enter into make any new line 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 businessbusiness consistent with past practice in connection with foreclosure, settlement in lieu of foreclosure, or troubled loan or debt restructuring;
(xvxx) enter into originate (i) any Contract 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 make a capital expenditure any loan or in the aggregate as to purchase a capital assetany related loans or loans to related Persons, which expenditure (vi) commercial real estate first mortgage loans in excess of $2,500,000 as to any loan or purchase exceeds in the amount 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 allocated therefor as set forth in the budget related to such expenditures provided to Parent prior to the date of this Agreement(v) and (vi) above;
(xvixxi) enter into an agreement purchase or sell any loans or any mortgage loan servicing rights;
(xxii) 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 compensation information without the prior consent of Parent (which shall not be unreasonably delayed or withheld), except for communications that, upon advice of outside counsel, are required by applicable law or by the requirements of the SEC, AMEX or the IRS (in which case the Company shall in any event use reasonable best efforts to consult with Parent in advance of such communications), or issue any broadly distributed communication of a general nature to customers without the prior approval of Parent (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;
(xxiii) award or authorize the award of any Company Stock Options or Company Stock-Based Awards;
(xxiv) 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 insurance policies referred to in Section 3.1(o) except with Parent's prior written consent, which shall not 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 the conditions of Article VI not being satisfied; or
(xxvi) authorize, or commit or agree to take, any of the foregoing actions.
Appears in 1 contract
Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, except as otherwise contemplated by this Agreement Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule or unless with the prior consent of Parent (which consent shall otherwise consent in advance in writingnot be unreasonably withheld, conditioned or delayed), the Company shall, and shall cause each of the Company Subsidiaries to, carry on their respective businesses in the usual, regular and ordinary course, consistent with past practice or its current expense budgets as disclosed to Parentpractice, and, to the extent substantially consistent therewith, use their commercially reasonable efforts to:
(a) Preserve to preserve intact their present business organizations,
(b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep keep available the services of their directors, present officers and key employees, and
(d) Subject to the right of contract parties to exercise applicable rights, maintain satisfactory employees and preserve their relationships and goodwill with their Governmental Entities and significant customers, clients, lenders, suppliers, vendors and others having material business relationships with them. Without limiting the generality of the foregoing, neither the Company nor any of the Company Subsidiaries will will, directly or indirectly (except as expressly permitted or contemplated by this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule or to the extent that Parent shall otherwise consent in writing (it being understood that Parent shall respond within five (5) Business Days to the Company’s communications soliciting such consent from Parent, such consent not be unreasonably withheld, conditioned or delayed)):
(ia) (Ai) split, combine combine, subdivide or reclassify any shares of its capital stock, stock of the Company or (Bii) declare, set aside or pay any dividend or other distribution (whether in cash, stock, or property or any combination thereof) in respect of any shares of capital stock of the Company, or make any other distribution in respect of shares of capital stock, and except for dividends or distributions declared, set aside or paid by any Company Subsidiary to the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned by the Company, or (C) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Company Securities or any Company Subsidiary Securities;
(iib) except for grants and awards, in type and amount consistent with ordinary course past practices, under the Company Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue issue, deliver, sell, redeem or sell repurchase or agree or commit to issue issue, deliver, sell, redeem or sell repurchase (whether through the issuance or granting of of, or accelerating the exercisability of, options, warrants, commitments, subscriptions, rights to purchase or otherwise) ), other than the repurchase of Company Restricted Shares on termination of employment, any stock of any class or any other securities or equity equivalents (including, without limitation, including stock appreciation rights) other than the issuance of shares of Company Common Stock (Ai) upon the exercise of Company Stock Options and Company Warrants outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof and (Bii) upon the exercise of Company Warrants in accordance with commitments to issue such shares under any long-term incentive plan awards outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof;
(iiic) acquire (by merger, consolidation, acquisition of stock or assets or otherwiseexcept as set forth on Schedule 5.1(c), directly acquire, sell, pledge, grant a security interest in, license, lease, transfer or indirectly, dispose of any assets, securities, properties, interests or businesses, in each case, other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items in assets outside the ordinary course of business with a value or purchase price in excess of (i) $500,000 per individual incurrence or (ii) $2,000,000 in the Company and the Company Subsidiaries in a manner that is consistent with past practiceaggregate (whether by asset acquisition, stock acquisition or otherwise);
(ivd) sell, lease or otherwise transfer, or create or incur any Encumbrance on, any of the Company’s or the Company Subsidiaries’ assets, securities, properties, interests or businesses, other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights in the ordinary course of business consistent with past practice;
(v) except in the ordinary course of business or pursuant to credit facilities or other arrangements (including intercompany arrangements) in existence as of the date of this Agreementpractices, incur any amount of Indebtedness for borrowed money, guarantee any Indebtedness of a third party, issue or sell debt securities, make any loans, advances or capital contributionscontributions (except as permitted by paragraph (m) below), or, except for Permitted Liens, mortgage, pledge or otherwise encumber any material assets, or create or suffer any material Encumbrance lien thereupon, in excess of (i) $1,000,000 per individual incurrence or (ii) $2,500,000 in the aggregate;
(vie) amend or otherwise modify the terms of the Credit Facilities, except in a manner favorable to the Company;
(Af) as set forth in Section 5.1(vicommence, settle or compromise any pending or threatened suit, action or claim which (i) is material to the business of the Company Disclosure Scheduleand the Company Subsidiaries, provided taken as a whole, or that such settlement does not exceed otherwise involves the amounts accrued therefor payment by the Company of an amount in excess of $500,000, in the most recent balance sheet aggregate, for all such suits, actions or claims, (ii) would involve restrictions on the business activities of the Company set forth in the or any Company SEC Reports, Subsidiary or (Biii) would involve the issuance of Company securities;
(g) except pursuant to any mandatory payments (including cash each sweep arrangementsarrangement) under any credit facilities Credit Facilities in existence on the date hereof or entered into in compliance with the terms hereof, pay, discharge, discharge or satisfy outside the ordinary course of businessbusiness any claims, settle pending or offer threatened litigations, proceedings, liabilities or propose obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) in excess of $500,000 in the aggregate with respect to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the Transactionmatters;
(viih) change any of the accounting principles or practices used by it except as required by GAAP;
(viiii) except for agreements existing as increase the compensation or benefits of any director or “named executive officer” of the date Company or increase the compensation or benefits of this Agreement, enter into any agreement director or engage in officer of any transaction with one or more of the Company’s directorsCompany Subsidiaries, officers or stockholders, 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases in the ordinary course of business consistent with past practice, increase the compensation, bonus or other benefits of any director, officer or senior employeepractices;
(x) (Aj) grant to any director, officer director or employee “named executive officer” of the Company the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee“named executive officer” of the Company;
(k) grant to any director or officer of any of the Company Subsidiaries the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits, except for (Bx) enter into any employment, deferred compensation grants of new severance or other similar agreement (termination pay or amend any such existing agreement)termination benefits, or (C) establish, adopt or amend (except as required by applicable lawy) any collective bargaininggrants of increases in any existing severance or termination pay or termination benefits, bonusin each case, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreementin the ordinary course consistent with past practices;
(xil) except to the extent required to comply with its obligations hereunder or with applicable Law, amend its the certificate of incorporation or bylaws, or bylaws of the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company SubsidiaryCompany;
(xiim) adopt a plan or agreement of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization of the Company or any Company Subsidiary other than the complete or partial liquidation or dissolution of any Company Subsidiary that is not a wholly owned subsidiary;
(n) make or change any material Tax election, forego any material Tax refund or change any material Tax accounting method, amend any material Tax Return, or enter into any material Tax allocation agreement, material Tax sharing agreement, material Tax indemnity agreement or closing or settlement agreement relating to any material Tax, or agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of material Taxes;
(o) make any loans, advances or capital contributions to or investments in any Person (other than the Merger)Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $500,000 in the aggregate;
(xiiip) forgive any loans to employees, officers, directors or any of their Affiliates;
(Aq) make or authorize any capital expenditures in excess of $2,000,000 in the aggregate;
(r) enter into any Contract new line of business or exit any existing line of business that would constitute is material to the Company and the Company Subsidiaries, taken as a Material Contract if it had been entered into as whole;
(s) convene any regular or special meeting (or adjournment thereof) of the date stockholders of this Agreement the Company other than the Company Stockholders’ Meeting;
(t) modify, amend or (B) amendterminate, modify in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rightsrights or claims with respect to any confidentiality or non-competition agreement to which the Company is a party;
(u) enter into any agreement to purchase or sell any interest in real property, claims grant any security interest in real property, enter into any material lease, sublease, license or benefits other occupancy agreement with respect to any real property or materially alter, amend, modify or terminate any of the Company terms of any Leases;
(i) make any material acquisition, by purchase or any Company Subsidiary thereunder; providedother acquisition of stock or other equity interests, howeverby merger, that the foregoing shall not prevent consolidation or preclude the Company or any Company Subsidiary from other business combination (Iincluding by formation of a material joint venture) negotiating and/or renewing in outside of the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (II) entering into any client or customer Contracts a value in the ordinary course excess of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required);$3,000,000; or
(xivw) enter into any new line of business;
(xv) enter into any Contract to make a capital expenditure authorize, commit or to purchase a capital asset, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth in the budget related to such expenditures provided to Parent prior to the date of this Agreement;
(xvi) enter into an agreement to take any of the foregoing actions. Notwithstanding the foregoing, none of the restrictions contained in this Section 5.1 shall be deemed to limit the ability of the Company or any Company Subsidiary to undertake or otherwise conduct any activity if any such restriction would violate Section 7.09(a) of the Revolving Credit Agreement.
Appears in 1 contract
Conduct of Business by the Company. During the period from the date of this Agreement to the Effective TimeTime (or such earlier date on which this Agreement may be terminated), except as otherwise contemplated required by this Agreement or unless Parent shall otherwise consent applicable Law, consented to in writing in advance in writingby Parent (which consent shall not be unreasonably withheld, delayed or conditioned), or otherwise specifically contemplated or permitted by or required pursuant to this Agreement, the Company shall, and shall cause each of the Company its Subsidiaries to, carry on their respective businesses its business in the usual, regular and ordinary course, course consistent with past practice or its current expense budgets as disclosed to Parent, and, to the extent substantially consistent therewith, use its and their commercially reasonable efforts to:
(a) Preserve to preserve intact their present business organizations,
(b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep keep available the services of their directors, present officers and key employees, and
(d) Subject employees and maintain operations at all of their respective school locations existing as of the date hereof. In addition to the right of contract parties to exercise applicable rights, maintain satisfactory relationships with their customers, clients, lenders, suppliers, vendors and others having material business relationships with them. Without without limiting the generality of the foregoing, neither the Company nor any of the Company Subsidiaries will (during such period, except as expressly required by applicable Law or as otherwise specifically contemplated or permitted by or contemplated by required pursuant to this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule or to the extent that Parent shall otherwise not, and shall not permit any of its Subsidiaries to, without Parent’s prior written consent in writing (it being understood that Parent shall respond within five Business Days to the Company’s communications soliciting which such consent from Parent, such consent shall not be unreasonably withheld, conditioned delayed or delayed)conditioned):
(i) (A) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property or any combination of the foregoing) in respect of, any of its capital stock, except that Subsidiaries may make distributions to the Company, (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 shares of its capital stock, or (C) purchase, redeem or otherwise acquire any shares of its capital stock or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities, except for (x) 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, (y) the acquisition or redemption of the Rights or (z) the cancellation (by tender offer or otherwise) of the Eligible Options, provided that the amount paid to the holders of such Eligible Options in the aggregate does not exceed $4,308,000;
(ii) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien any shares of its capital stock, (B) declareany other voting securities or any securities convertible into, set aside or pay any dividend rights, warrants or other distribution (whether in cashoptions to acquire, any such shares, voting securities or convertible securities, or any “phantom” stock, or property or any combination thereof) in respect of any shares of capital stock, and dividends or distributions declared, set aside or paid by any Company Subsidiary to the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned by the Company, or (C) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Company Securities or any Company Subsidiary Securities;
(ii) except for grants and awards, in type and amount consistent with ordinary course past practices, under the Company Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any “phantom” stock of any class or any other securities or equity equivalents (including, without limitationrights, stock appreciation rights) rights or stock based performance units, including pursuant to Contracts as in effect on the date hereof (other than the issuance of shares of Company Common Stock (A) upon the exercise of Company Stock Options outstanding on the date of this Agreement hereof in accordance with their present terms and the provisions hereof and (B) upon the exercise of Company Warrants outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof);
(iii) acquire amend the certificate of incorporation or the bylaws of the Company or other comparable charter or organizational documents of the Company or any of its Subsidiaries;
(iv) except as set forth on Schedule 4.01(a)(iv) hereto, make any acquisition (including by merger, consolidation, stock acquisition or otherwise) of the capital stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, in each case, other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items (except in the ordinary course of business or as otherwise permitted pursuant to this Agreement) assets of the Company and the Company Subsidiaries any other Person for consideration in a manner that is consistent with past practice;
(iv) sell, lease or otherwise transfer, or create or incur any Encumbrance on, any excess for all such transactions of the Company’s or the Company Subsidiaries’ assets, securities, properties, interests or businesses, other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights $1,000,000 in the ordinary course of business consistent with past practiceaggregate;
(v) adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(vi) except in the ordinary course of business or pursuant to credit facilities or other arrangements (including intercompany arrangements) in existence as of the date of this Agreementhereof, incur any amount of Indebtedness for borrowed money, guarantee any Indebtedness of a third party, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assets, or create or suffer any material Encumbrance lien thereupon;
(vivii) 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 or any interests therein (including securitizations), except (A) for sales, 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, or (E) for transfers among the Company and its Subsidiaries;
(viii) make or authorize capital expenditures except (A) as budgeted in the Company’s current or the fiscal year 2012 plan approved by the Board that was made available to Parent, (B) in the ordinary course of business consistent with past practice (which shall include any expenditures required by Education and Childcare Authorities) or (C) otherwise in an amount not to exceed $500,000 in the aggregate;
(ix) 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 in on Section 5.1(vi3.01(h) of the Company Disclosure Schedule subject to the limits and conditions set forth on Section 3.01(h) of the Company Disclosure Schedule, provided (B) settlements of any suit, action or claim, or threatened suit, action or claim, that such settlement does (1) require payments by the Company or any Company Subsidiary (net of insurance proceeds) in an amount not to exceed the amounts accrued therefor $25,000 individually or $100,000 in the most recent balance sheet aggregate and (2) do not require any other actions or impose any other material restrictions on the business or operations of the Company set forth in and the Company SEC ReportsSubsidiaries, or (BC) pursuant to settlements of any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof workers’ compensation claims or entered into in compliance employee claims filed with the terms hereofEqual Employment Opportunity Commission, payin each case, discharge, satisfy outside so long as such settlement is in the ordinary course of business consistent with past practice;
(x) amend or modify in any material respect or terminate any Material Contract other than in the ordinary course of business;
(xi) except set forth on Schedule 4.01(a)(xi) of the Company Disclosure Schedule or as required to ensure that any Company Benefit Plan is not then out of compliance with applicable Law or to comply with any Contract entered into prior to the date hereof (A) adopt, settle enter into, terminate or offer amend (1) any Company Benefit Plan or propose to settle(2) any other agreement, plan or policy involving the Company or any of its Subsidiaries and one or more of their respective current or former employees or members of the Board that is not terminable at will, (IB) any material litigationincrease the compensation, investigation, arbitration, proceeding bonus or fringe or other claim involving benefits offered by the Company or against its Subsidiaries other than increases in the ordinary course of business consistent with past practice, (C) 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, (IID) grant any stockholder litigation awards under any bonus, incentive, performance or claim in writing against 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 contemplated by this Agreement, amend or modify any Stock Option, (F) except as required by Sections 2.03(a) and 2.03(b) 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, whether directly, pursuant to Company credit cards or otherwise) to any current or former member of the Board or employee of the Company or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the TransactionCompany Subsidiary;
(vii) change any of the accounting principles or practices used by it except as required by GAAP;
(viiixii) except for agreements existing as entered into or transactions occurring in the ordinary course of the date of this AgreementCompany’s business consistent with past practice, enter into any agreement or engage in any transaction with one or more of the Company’s directors, officers or stockholders, 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 stockholders is (xA) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (yB) has a direct or indirect financial interest, or (zC) directly or indirectly controls, is controlled by or is under common control with;
(ixxiii) except as may be required by Law GAAP or any contractual commitment or Employee Program in existence on the date hereof, applicable accounting requirements and except for increases in the ordinary course of business consistent with past practice, increase the compensation, bonus or other benefits of any director, officer or senior employee;
(x) (A) grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (B) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), or (C) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreement;
(xi) except to the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary;
(xii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger);
(xiii) (A) enter into any Contract that would constitute a Material Contract if it had been entered into as published rules and regulations of the date of this Agreement SEC, make any change in financial or (B) amendtax accounting methods, modify in any material respect principles or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing in the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (II) entering into any client or customer Contracts in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required)practices;
(xiv) enter into any new line of businesscollective bargaining agreement or other agreement with a labor union, works council or similar organization;
(xv) enter into adopt or implement any Contract to make a capital expenditure stockholder rights plan or to purchase a capital asset, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth in the budget related to such expenditures provided to Parent prior to the date of this Agreementsimilar arrangement;
(xvi) file any amended tax return or any income tax return, enter into an agreement any closing agreement, settle any tax claim or assessment relating to the Company or any of its Subsidiaries, surrender any right to claim a refund of taxes, consent to any extension or waiver of the limitation period applicable to any tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action relating to the filing of any tax return or the payment of any tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action would have the effect of increasing the tax liability of the Company or any of its Subsidiaries for any period, decreasing any tax refund of the Company or any of its Subsidiaries for any period or decreasing any tax attribute (such as a net operating loss carryforward, capital loss carryforward, or tax credit carryforward) of the Company or any of its Subsidiaries existing on the Closing Date; provided, however, that the Company or its Subsidiaries may, without the consent of Parent, file any return, enter into any closing agreement, settle any tax claim or assessment, surrender any right to claim a tax refund, consent to any extension or waiver of the limitation period, or take any such other similar action with respect to filing any tax return or payment of any tax, in any instance where the amount of the related tax, assessment, refund or decrease in tax attribute is $10,000 or less individually and $50,000 or less in the aggregate;
(xvii) enter into any new line of business; or
(xviii) authorize or agree or commit to take any of the foregoing actions.
Appears in 1 contract
Conduct of Business by the Company. During the period from the date of this Agreement Date to the Effective Time, except with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed) or as otherwise specifically contemplated by this Agreement or unless Parent shall otherwise consent as set forth in advance in writingSchedule 5.1(a), the Company shall, and shall cause each of the other Company Subsidiaries Entities to, carry on their respective businesses in the usual, regular and ordinary course, course consistent with past practice or and materially comply with all applicable Laws (including Competition Laws and the Federal Acquisition Regulation) and accounting standards (including GAAP and Cost Accounting Standards) and use its current expense budgets as disclosed reasonable best efforts to Parent, and, to the extent substantially consistent therewith, use their commercially reasonable efforts to:
(a) Preserve intact their present business organizations,
(b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep keep available the services of their directors, present officers and key employees, and
(d) Subject other employees and to the right of contract parties to exercise applicable rights, maintain satisfactory preserve their assets and their relationships with their material licensors, licensees, partners, customers, clients, lenders, suppliers, vendors distributors and others having material business relationships dealings with themthem and maintain their franchises, rights and Permits. Without limiting Further, during the generality of period from the foregoing, neither the Company nor any of the Company Subsidiaries will (except as expressly permitted or contemplated by this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule or Agreement Date to the extent that Effective Time, except (i) with the prior written consent of Parent (which shall otherwise consent in writing (it being understood that Parent shall respond within five Business Days to the Company’s communications soliciting such consent from Parent, such consent not be unreasonably withheld, conditioned or delayed)):, (ii) as may be required by applicable Law (including the rules of NYSE, excluding any stockholder voting requirements contained therein), (iii) as specifically contemplated by this Agreement or (iv) as set forth in Schedule 5.1(a), the Company shall not, and shall not permit any of the other Company Entities to:
(i) (A) split, combine or reclassify any shares of its capital stock, (B) declare, set aside or pay any dividend dividends on, or make any other distribution distributions (whether in cash, stockproperty, stock or property or any combination thereofother securities) in respect of, any of its capital stock or other equity or voting interests, except for any dividends by a direct or indirect wholly-owned Subsidiary of the Company to its parent, other than the payment by the Company of the quarterly cash dividend declared by the Company on August 20, 2010 of $0.10 per share of Company Common Stock and a dividend of $0.10 per share of Company Common Stock contemplated to be declared in December, 2010 to be paid on or after March 11, 2011 to shareholders of record as of a date that is on or after Maxxx 00, 0000, (X) xplit, combine or reclassify any of its capital 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 shares of its capital stock or other equity or voting interests (other than upon the conversion, exercise or settlement, in accordance with their terms or this Agreement, of outstanding Company RSUs or Company SARs in the amounts set forth in Section 4.1(c)(ii)) (C) purchase, redeem or otherwise acquire any shares of capital stock or any other securities of the Company Entities or any options, warrants, calls or rights to acquire any such shares or other securities (except pursuant to the forfeiture of Company RSUs or Company Restricted Stock, the Tax withholding obligations of holders of Company RSUs, Company SARs or Company Restricted Stock, or the acquisition by the trustee of the Company 401(k) Plan of shares of Company Common Stock on the open market in order to satisfy participant elections under the Company 401(k) Plan)
(ii) issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock, 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 stock, interests or securities or any stock appreciation rights, restricted stock units, stock-based performance units, “phantom” stock awards or other rights that are linked to the value of Company Common Stock or the value of the Company or any part thereof, (other than upon the conversion, exercise or settlement, in accordance with their terms or this Agreement, of Company RSUs or Company SARs in the amounts set forth in Section 4.1(c)(ii));
(iii) amend the Company Certificate or the Company By-laws or other comparable charter or organizational documents of any of the Company’s Subsidiaries;
(iv) acquire or agree to acquire by merging or consolidating with, or by purchasing all or a substantial portion of the assets of, or by purchasing all or a substantial equity or voting interest in, or by any other manner, any Person or business or division thereof;
(v) sell, lease, license, sell and lease back, mortgage or otherwise subject to any Lien or otherwise dispose of or abandon any (A) shares of capital stock, equity or voting interests or other rights, instruments or securities in the Company Entities or (B) a material portion of its properties or assets (excluding any shares of capital stock, and dividends equity or distributions declaredvoting interests or other rights, set aside instruments or paid by any Company Subsidiary to the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned by the Company, or (C) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Company Securities or any Company Subsidiary Securities;
(ii) except for grants and awards, securities in type and amount consistent with ordinary course past practices, under the Company Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or equity equivalents (including, without limitation, stock appreciation rights) entities other than the issuance Company Entities), except, in the case of shares of Company Common Stock (A) upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof and clause (B) upon the exercise of Company Warrants outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof;
(iii) acquire (by mergeronly, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, in each case, other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items in the ordinary course of business consistent with past practice and for Permitted Liens;
(vi) repurchase, prepay or incur any indebtedness for borrowed money, including by way of a guarantee or an issuance or sale of debt securities, other than (A) short-term borrowings incurred in the ordinary course of business consistent with past practice to finance the working capital needs of the Company and the Company Subsidiaries in a manner that is consistent with past practice;
(iv) sell, lease or otherwise transferEntities, or create (B) letters of credit, bonds or incur any Encumbrance on, any other surety instruments to secure the payment and/or performance of the Company’s or the Company Subsidiaries’ assets, securities, properties, interests or businesses, other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights contractual obligations in the ordinary course of business consistent with past practice;
(vvii) except in the ordinary course of business or pursuant to credit facilities issue and sell options, warrants, calls or other arrangements (including intercompany arrangements) in existence as rights to acquire any debt securities of the date of this Agreement, incur any amount of Indebtedness for borrowed money, guarantee any Indebtedness of a third party, issue or sell debt securities, Company Entities;
(viii) make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assetscontributions to, or create or suffer investments in, any material Encumbrance thereupon;
(vi) except other Person, other than (A) as set forth in Section 5.1(vi) of the Company Disclosure ScheduleEntities, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, or (B) pursuant advances to any mandatory payments (including cash sweep arrangements) under any credit facilities employees in existence on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course respect of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding travel or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the Transaction;
(vii) change any of the accounting principles or practices used by it except as required by GAAP;
(viii) except for agreements existing as of the date of this Agreement, enter into any agreement or engage in any transaction with one or more of the Company’s directors, officers or stockholders, 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases related ordinary expenses in the ordinary course of business consistent with past practice, increase the compensation, bonus or other benefits of any director, officer or senior employee;
(x) (A) grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (B) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), or (C) establishinvestments in marketable securities that are readily salable at their fair market value, adopt that, individually or amend in the aggregate, do not exceed 10% of the voting equity of any Person;
(except ix) incur or commit to incur any capital expenditures in excess of $250,000 each or $500,000 in the aggregate, or any obligations or liabilities in connection therewith, other than in the ordinary course of business or to replace or repair any damaged or obsolete capital equipment;
(A) pay, discharge, settle or satisfy any unmatured or contingent claims (including any claims of stockholders and any stockholder litigation relating to this Agreement or any transaction contemplated by this Agreement or otherwise), liabilities or obligations for an amount in excess of $100,000, other than (i) the payment, discharge, settlement or satisfaction thereof in the ordinary course of business consistent with past practice, including payments in settlement or the payment of a judgment related to claims against any Company Entity related to exposure to asbestos, (ii) such claims, liabilities or obligations reserved against in the Company’s most recent financial statements (including the notes thereto) included in the Filed Company SEC Documents (for amounts not in excess of 120% of such reserves) or incurred since the date of such financial statements in the ordinary course of business consistent with past practice, (iii) as required by any applicable lawLaw or Contract that is not entered into in violation of this Agreement, (iv) the payment, discharge, settlement or satisfaction of any collective bargainingsuch claims out of the proceeds of any applicable policy of insurance, bonusor (v) payment of Transaction Expenses; (B) waive, profitrelinquish, release, grant, transfer or assign any right of material value or (C) disclose any confidential or non-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock public proprietary information of the Company Entities other than pursuant to a confidentiality agreement (including an Acceptable Confidentiality Agreement) restricting the right of the recipient thereof to use and disclose such confidential or other benefit plan or agreementproprietary information;
(xi) enter into any Material Contract, modify or amend in any material respect any Material Contract, waive, release, assign or fail to exercise or pursue any rights or claims under any Material Contract or accelerate, terminate or cancel any Material Contract other than (A) consistent with past practice and in the ordinary course of business, (B) pursuant to any bid or proposal or Material Contract relating to ship repair, construction or overhaul;
(xii) except as required to ensure that any Company Benefit Plan or Company Benefit Agreement in effect on the Agreement Date (or the administration thereof) is not out of compliance with applicable Law or as required to comply with any Company Benefit Plan or Company Benefit Agreement in effect on the Agreement Date or as specifically required pursuant to this Agreement (and, in each case, in compliance with Section 6.11), and except as otherwise contemplated by this Agreement (A) adopt, enter into, establish, terminate, amend or modify any Company Benefit Plan or Company 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, other than in the ordinary course of business, (C) pay or provide to any Company Personnel any compensation or benefit, other than pursuant to agreements or plans in existence as of the Agreement Date and other than the payment of base cash compensation in the ordinary course of business consistent with past practice or regularly-scheduled bonus compensation, (D) grant or amend any awards under any Company Benefit Plan (including the grant or amendment of any equity or equity-based or related compensation) or remove or modify existing restrictions in any Company Benefit Plan or Company Benefit Agreement or awards made thereunder (other than as contemplated by Section 3.4), (E) grant or pay any severance, separation, change in control, retention, incentive compensation, termination or similar compensation or benefits to, or increase in any manner the severance, separation, change in control, retention, incentive compensation, termination or similar compensation or benefits of, any Company Personnel, other than (1) in the ordinary course of business, (2) pursuant to any Contract or established formal or informal severance policy or (3) pursuant to any Company Benefit Plan or Company Benefit Agreement, (F) enter into any trust, annuity or insurance Contract or similar agreement with respect to, or take any action to fund or in any other way secure the payment of compensation or benefits under, any Company Benefit Plan or Company Benefit Agreement, or (G) make any determination under any Company Benefit Plan or Company Benefit Agreement that is inconsistent in any material respect with the ordinary course of business and past practice; provided, however, that the foregoing shall not restrict any Company Entity from entering into or making available to newly hired employees or to employees in the context of promotions based on job performance or workplace requirements, other than any director or executive of the Company, in each case in the ordinary course of business, plans, agreements, benefits and compensation arrangements (other than incentive grants) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees in similar positions;
(xiii) form any Subsidiary;
(xiv) enter into any Contract that would require the consent of a third-party in connection with or following the consummation of the Transactions;
(xv) adopt or enter into or revise or amend any collective bargaining agreement or other labor union Contract applicable to any employees of the Company Entities;
(xvi) write down any material assets other than as may be consistent with Company’s historical accounting practices;
(xvii) enter into, approve or recommend (or propose publicly to approve or recommend), or permit any of the Company’s Affiliates to enter into, any agreement requiring, or reasonably expected to cause, the Company to abandon, terminate, delay or fail to consummate, or that would otherwise impede, interfere or be inconsistent with, the Transactions or requiring, or reasonably expected to cause, the Company to fail to comply with this Agreement (other than in connection with Section 5.2);
(xviii) fail to keep in force any material insurance policy or replacement or revised provisions providing insurance coverage with respect to the assets, operations and activities of the Company Entities as are currently in effect (except to the extent required to comply any such material insurance policy lapses, expires or terminates in accordance with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylawsterms), or the certificate of formationfail to replace, limited partnership on substantially similar terms and conditions, any such material insurance policy that lapses, expires or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiaryterminates in accordance with its terms;
(xiixix) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of such entity (other than the Mergerin connection with Section 5.2);
(xiii) (A) enter into any Contract that would constitute a Material Contract if it had been entered into as of the date of this Agreement or (B) amend, modify in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing in the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (II) entering into any client or customer Contracts in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required);
(xivxx) enter into any new line of businessbusiness outside its existing business segments;
(xvxxi) enter into convene any Contract special meeting (or any adjournment thereof) of the stockholders of the Company other than the Stockholders’ Meeting (if such a meeting is required by this Agreement and applicable Law);
(xxii) take any action intended to make a capital expenditure result in any of the conditions of the Offer set forth on Exhibit A or to purchase a capital asset, which expenditure or purchase exceeds the amount or amounts allocated therefor as Merger set forth in Article VII not being satisfied or intended to prevent, delay or impair the budget related ability of the Company to such expenditures provided to Parent prior to consummate the date of this Agreement;Merger (other than in connection with Section 5.2); or
(xvixxiii) enter into an agreement authorize, or commit, resolve or agree to take take, any of the foregoing actions.
Appears in 1 contract
Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, except with the prior written consent of Parent or as otherwise specifically contemplated by the Company Letter or this Agreement or unless Parent shall otherwise consent in advance in writingAgreement, the Company shall, and shall cause each of the Company its Subsidiaries to, carry on their respective businesses in the usual, regular and ordinary course, course consistent with past practice or its current expense budgets as disclosed and use commercially reasonable efforts to Parent, comply with all applicable Laws and, to the extent substantially consistent therewith, use their commercially reasonable efforts to:
(a) Preserve intact their present business organizations,
(b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep to keep available the services of their directorspresent officers, officers software developers and other key employees, and
(d) Subject employees and to the right of contract parties to exercise applicable rights, maintain satisfactory preserve their assets and technology and preserve their relationships with their customers, clients, lenders, suppliers, vendors licensors, licensees, distributors and others having material business relationships dealings with themthem and maintain their franchises, rights and Permits. Without limiting the generality of the foregoing, neither during the period from the date of this Agreement to the Effective Time, except as specifically contemplated by the Company nor Letter or this Agreement or with the prior written consent of Parent, the Company shall not, and shall not permit any of the Company its Subsidiaries will (except as expressly permitted or contemplated by this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule or to the extent that Parent shall otherwise consent in writing (it being understood that Parent shall respond within five Business Days to the Company’s communications soliciting such consent from Parent, such consent not be unreasonably withheld, conditioned or delayed)):to:
(i) (A) split, combine or reclassify any shares of its capital stock, (B) declare, set aside or pay any dividend dividends on, or make any other distribution distributions (whether in cash, stock, stock or property or any combination thereofproperty) in respect of, any of its capital stock or other equity or voting interests, except for dividends by a direct or indirect wholly owned Subsidiary to its parent, (B) split, combine or reclassify any of its capital 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 shares of its capital stock or other equity or voting interests, (C) purchase, redeem or otherwise acquire any shares of capital stock, and dividends stock or distributions declared, set aside or paid by any Company Subsidiary to other securities of the Company or any of its Subsidiaries or any options, warrants, calls or rights to acquire any Company Subsidiary that is, directly such shares or indirectly, wholly owned by the Companyother securities (including any Stock Options, or Restricted Shares, except pursuant to the forfeiture or repurchase conditions of such Restricted Shares as in effect on the date of this Agreement) or (CD) redeemtake any action that would result in any amendment, repurchase modification or otherwise acquire or offer change of any term of any indebtedness (other than accounts payable to redeem, repurchase or otherwise acquire any trade creditors) of the Company Securities or any Company Subsidiary Securitiesof its Subsidiaries;
(ii) except for grants and awardsissue, in type and amount consistent with ordinary course past practicesdeliver, under the Company Equity Incentive Plansell, as amendedpledge or otherwise encumber any shares of its capital stock, in connection with new hires and promotionsany other equity or voting interests or any securities convertible into, authorize for issuanceor exchangeable for, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of any options, warrants, commitments, subscriptions, calls or rights to purchase acquire, any such stock, interests or otherwise) any stock of any class securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights) , phantom stock awards or other similar rights that are linked to the value of Company Common Stock or the value of the Company or any part thereof (other than the issuance of shares of Company Common Stock (A) upon the exercise of Company Stock Options or rights under the ESPP outstanding as of the date of this Agreement and only if and to the extent required by their terms as in effect on the date of this Agreement in accordance with their present terms and the provisions hereof and (B) upon the exercise of Company Warrants outstanding on the date of this Agreement in accordance with their present terms and the provisions hereofAgreement);
(iii) amend or propose to amend its certificate of incorporation or bylaws (or similar organizational documents);
(iv) acquire or agree to acquire (A) by mergermerging or consolidating with, consolidationor by purchasing all or a substantial portion of the assets of, acquisition of stock or assets by purchasing all or otherwise)a substantial equity or voting interest in, directly or indirectlyby any other manner, any assetsbusiness or person or division thereof, securities, properties, interests or businesses, in each case, (B) any other assets (other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment and Property) other similar items than immaterial assets acquired in the ordinary course of business or (C) Third Party Software and other Intellectual Property except for Third Party Software and Intellectual Property acquired in the ordinary course of the Company and the Company Subsidiaries in a manner that is business consistent with past practicepractice for an acquisition price of not more than $50,000 on an individual basis and not more than $250,000 on an aggregate basis;
(ivv) subject to the second sentence of Section 4.01(ix), sell, lease, license, sell and lease back, mortgage or otherwise transfer, encumber or create subject to any Lien or incur any Encumbrance on, otherwise dispose of any of the Company’s its material properties or the Company Subsidiaries’ assetsassets (including any shares of capital stock, securities, properties, equity or voting interests or businessesother rights, other than the sale of equipmentinstruments or securities), products and services and except the licensing of Owned its Intellectual Property Rights and Software and sales of inventory and products or used equipment, in each such case in the ordinary course of business consistent with past practice and except for Permitted Liens or Liens incurred in the ordinary course of business consistent with past practice;
(vvi) (A) repurchase, prepay or incur any indebtedness other than ordinary course accounts payable to trade creditors or guarantee any indebtedness of another person or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, (B) guarantee any debt securities of another person, enter into any “keep well” or other Contract to maintain any financial statement condition of another person other than the Company or a Subsidiary or enter into any arrangement having the economic effect of any of the foregoing other than such arrangements for the benefit of the Company or any Subsidiary or (C) make any loans, advances or capital contributions to, or investments in, any other person, other than the Company or any direct or indirect wholly owned Subsidiary;
(vii) incur or commit to incur any capital expenditures, or any obligations or liabilities in connection therewith, that in the aggregate are in excess of $1,000,000;
(A) pay, discharge, settle or satisfy any claims (including any claims of stockholders and any stockholder 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 (1) reflected or reserved against in the Company’s most recent financial statements contained in the Filed SEC Documents (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 or (2) 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 Closing Date and is in an amount of less than $1,000,000 individually or $2,000,000 in the aggregate, (B) waive the right to enforce, relinquish, release, transfer or assign (except for transfer or assignment to the Company or a Subsidiary) any right of material value or (C) waive any material benefits of, or agree to modify in any adverse respect or consent to any matter with respect to which its consent is required under, any 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. Notwithstanding the foregoing, the Company may sublease (as sublessor) or assign leases for properties which the Company does not fully utilize; provided, that in each case (A) such sublease or assignment is consistent with commercial practice and (B) the Company shall have provided Parent with prior written notice of the material terms of the proposed sublease or assignment and not less than 48 hours to comment on such terms;
(x) modify or amend in any material respect or accelerate, terminate or cancel any material Contract or waive any right to enforce, relinquish, release, transfer or assign any rights or claims thereunder;
(xi) enter into any Contract that is not in the ordinary course of business or that is inconsistent with past practice;
(xii) except as required to ensure that any Benefit Plan or Benefit Agreement in effect on the date of this Agreement is not then out of compliance with applicable Law or as specifically required pursuant to credit facilities this Agreement, (A) adopt, enter into, terminate or other arrangements amend any Benefit Plan or Benefit Agreement, (including intercompany arrangementsB) increase in existence any manner the compensation or benefits of, or pay any bonus to, any Company Personnel, except as of required to comply with any Benefit Plan or Benefit Agreement in effect on the date of this Agreement, incur any amount of Indebtedness for borrowed money, guarantee any Indebtedness of a third party, issue (C) pay or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assets, or create or suffer any material Encumbrance thereupon;
(vi) except (A) as set forth in Section 5.1(vi) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, or (B) pursuant provide to any mandatory payments (including cash sweep arrangements) Company Personnel any benefit not provided for under any credit facilities a Benefit Plan or Benefit Agreement as in existence effect on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the Transaction;
(vii) change any of the accounting principles or practices used by it except as required by GAAP;
(viii) except for agreements existing as of the date of this Agreement, enter into any agreement or engage in any transaction with one or more other than the payment of the Company’s directors, officers or stockholders, 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases base compensation in the ordinary course of business consistent with past practice, increase (D) grant any awards under any Benefit Plan (including the compensationgrant of stock options, bonus stock appreciation rights, performance units, restricted stock, stock purchase rights or other stock-based or stock-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 vesting or payment of any directorcompensation or benefits under any Contract, officer Benefit Plan or senior employeeBenefit Agreement or (G) make any material determination under any Benefit Plan or Benefit Agreement that is inconsistent with the ordinary course of business or past practice;
(xxiii) form any subsidiary of the Company;
(A) grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (Bxiv) enter into any employmentContract containing any provisions having the effect of providing that the consummation of the Merger or compliance by the Company with the provisions of this Agreement will conflict with, deferred compensation result in any violation or other similar agreement breach of, or constitute a default (with or without notice or lapse of time or both) under, such Contract, or give rise under such Contract to any right of, or result in, a termination, right of first refusal, material amendment, revocation, cancelation or material acceleration, or a loss of a material benefit or the creation of any material Lien upon any of the properties or assets of the Company, Parent or any of their respective subsidiaries, or to any increased, guaranteed, accelerated or additional rights or entitlements of any person, except to the extent such conflicts, results, defaults, rights, losses or entitlements are required as a matter of applicable Law;
(xv) 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 Merger;
(xvi) take any action (or amend omit to take any action) if such action (or omission) is reasonably likely to result in (A) any representation and warranty of the Company set forth in this Agreement that is qualified as to materiality becoming untrue (as so qualified) or (B) any such existing agreement), or representation and warranty that is not so qualified becoming untrue in any material respect;
(Cxvii) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreement;
(xi) except to the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation adopt or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary;
(xii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger);
(xiii) (A) enter into any collective bargaining agreement or other labor union Contract that would constitute a Material Contract if it had been entered into as of applicable to the date of this Agreement or (B) amend, modify in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits employees of the Company or any of its Subsidiaries or terminate (other than for cause) the employment of any Company Subsidiary thereunder; providedPersonnel who has an employment, however, that the foregoing shall not prevent severance or preclude similar agreement or arrangement with the Company or any of its Subsidiaries;
(xviii) write-down any of its material assets, including any Intellectual Property, or make any change in any financial or tax accounting principle, method or practice other than those required by GAAP or applicable Law;
(xix) engage in (A) any trade loading practices or any other 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 (based on past practice) 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 (based on past practice) 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 Subsidiary from or any of its Subsidiaries that would otherwise be expected (Ibased on past practice) negotiating and/or renewing to be made in prior fiscal quarters (including the current fiscal quarter) or (D) any other promotional sales or discount activity, in each case in this clause (D) in a manner outside the ordinary course of business or inconsistent with past practice;
(xx) take any action or fail to take any action which action or failure to act would result in the material loss or reduction in value of the Intellectual Property, taken as a whole;
(xxi) make loans, advances or capital contributions to, or investments in, any other person (other than the Company or a Subsidiary);
(xxii) enter into, extend or renew (A) any Contract or amendment thereof which contains any provision listed in Section 3.01(i)(i)(B), (C), (E), (H)(2) or (L)(2), (B) any Contract or amendment thereof that grants any party the right or ability to access, license or use all or a material portion of the Intellectual Property of the Company and its Subsidiaries, other than in the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (IIC) entering into any client Contract providing for the services of any dealer, distributor, sales representative or customer Contracts similar representative. Notwithstanding the foregoing, the Company may enter into, extend or renew any Contract providing for the services of any dealer, distributor, sales representative or similar representative, provided, that with respect to this clause (C), in each case (x) such entry, extension or renewal is in the ordinary course of business consistent and is not inconsistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s y) the Company shall have provided Parent with prior written consent shall be required)notice of the material terms of the proposed Contract, extension or renewal and not less than 48 hours to comment on such terms;
(xiv) enter into any new line of business;
(xvxxiii) enter into any Contract or material amendment to make a capital expenditure Contract which contains any provision listed in Section 3.01(i)(i)(F), (G), (I)-(K), (M), (N), (O) or to purchase a capital asset, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth in the budget related to such expenditures provided to Parent prior to the date of this Agreement(Q)-(S);
(xvixxiv) enter into an agreement authorize any of, or commit, resolve or agree to take any of of, the foregoing actions.
Appears in 1 contract
Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, except as otherwise contemplated consented to in writing by this Agreement or unless Parent shall otherwise consent in advance in writingParent, the Company shall, and shall cause each of the Company Subsidiaries Subsidiary to, carry on their respective businesses conduct its business in the usual, regular and ordinary course, consistent with past practice or its current expense budgets course in substantially the same manner as disclosed to Parent, previously conducted and, to the extent substantially consistent therewith, use their all commercially reasonable efforts to:
(a) Preserve to preserve intact their present its current business organizations,
(b) Maintain in effect all of their foreignorganization, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep keep available the services of their directors, its current officers and key employees, and
(d) Subject to the right of contract parties to exercise applicable rights, maintain satisfactory employees and keep its relationships with their customers, clients, lenders, suppliers, vendors licensors, licensees, distributors and others having business dealings with them and to comply in all material respects with all Laws, Judgments and Consents of and Permits with all Governmental Entities applicable to them (including, without limitation, the Settlement Agreement) to the end that its goodwill and ongoing business relationships with themshall not be impaired in any material respect at the Effective Time. Without In addition, and without limiting the generality of the foregoing, neither except for matters set forth in the Company nor any Disclosure Letter (with specific reference to the relevant sections of the Company Subsidiaries will (except as covenants) or otherwise expressly permitted or contemplated by this Agreement, as set forth in Section 5.1 during the period from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any Company Subsidiary to, do any of the Company Disclosure Schedule following without the prior written consent of Parent (such consent not to be unreasonably withheld or delayed in the case of subsections (ix), (x), (xi), (xiii) and (xiv) and, to the extent that Parent shall otherwise consent in writing applicable, subsection (it being understood that Parent shall respond within five Business Days to the Company’s communications soliciting such consent from Parent, such consent not be unreasonably withheld, conditioned or delayedxvi)):
(i) (A) split, combine or reclassify any shares of its capital stock, (B) declare, set aside or pay any dividend dividends on, or make any other distribution distributions (whether in cash, stock, stock or property or any combination thereofproperty) in respect of, any of any its shares of capital stock, and dividends or distributions declared, set aside or paid by any Company Subsidiary to the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned by the Company, or (C) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Company Securities or any Company Subsidiary Securities;
(ii) except for grants and awards, in type and amount consistent with ordinary course past practices, under the Company Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or equity equivalents (including, without limitation, stock appreciation rights) other than the issuance of shares of Company Common Stock (A1) upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms dividends and the provisions hereof and (B) upon the exercise of Company Warrants outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof;
(iii) acquire (distributions by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, in each case, other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items in the ordinary course of business of the Company and the Company Subsidiaries in a manner that is consistent with past practice;
(iv) sell, lease or otherwise transfer, or create or incur any Encumbrance on, any of the Company’s or the Company Subsidiaries’ assets, securities, properties, interests or businesses, other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights in the ordinary course of business consistent with past practice;
(v) except in the ordinary course of business or pursuant to credit facilities or other arrangements (including intercompany arrangements) in existence as of the date of this Agreement, incur any amount of Indebtedness for borrowed money, guarantee any Indebtedness of a third party, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assets, or create or suffer any material Encumbrance thereupon;
(vi) except (A) as set forth in Section 5.1(vi) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, or (B) pursuant to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the Transaction;
(vii) change any of the accounting principles or practices used by it except as required by GAAP;
(viii) except for agreements existing as of the date of this Agreement, enter into any agreement or engage in any transaction with one or more of the Company’s directors, officers or stockholders, 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases in the ordinary course of business consistent with past practice, increase the compensation, bonus or other benefits of any director, officer or senior employee;
(x) (A) grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (B) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), or (C) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreement;
(xi) except to the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary;
(xii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger);
(xiii) (A) enter into any Contract that would constitute a Material Contract if it had been entered into as of the date of this Agreement or (B) amend, modify in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any wholly owned Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing in the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (II) entering into any client or customer Contracts in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required);
(xiv) enter into any new line of business;
(xv) enter into any Contract to make a capital expenditure or to purchase a capital asset, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth in the budget related to such expenditures provided to Parent prior to the date of this Agreement;
(xvi) enter into an agreement to take any of the foregoing actions.its parent and
Appears in 1 contract
Samples: Merger Agreement
Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, except as otherwise contemplated by this Agreement or unless Parent shall otherwise consent in advance in writingAgreement, the Company shallshall use its commercially reasonable efforts to, and shall cause each of the Company Subsidiaries to use its commercially reasonable efforts to, carry on their respective businesses in the usual, regular and ordinary course, consistent with past practice or its current expense budgets as disclosed to Parentand in material compliance with all Laws, and, to the extent substantially consistent therewith, and use their commercially reasonable efforts to:
(a) Preserve to preserve intact their present business organizations,
(b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep keep available the services of their directors, present officers and key employeesemployees and preserve their goodwill, and
(d) Subject to the right of contract parties to exercise applicable rightsCompany’s status as a REIT, maintain satisfactory and their relationships with their customers, clients, lenders, suppliers, vendors tenants and others having material business relationships dealings with them. The Company shall confer on a regular basis with Parent, report on operational matters and advise Parent orally and in writing of any Company Material Adverse Effect or any matter that could reasonably be expected to result in the Company being unable to deliver the certificate described in Section 7.2(a). Without limiting the generality of the foregoing, neither the Company nor any of the Company Subsidiaries will (except as expressly permitted by this Agreement or as contemplated by this Agreementthe transactions contemplated hereby, as set forth in Section 5.1 of the Company Disclosure Schedule or to the extent that Parent shall otherwise consent in writing (it being understood that Parent shall respond within five (5) Business Days to the Company’s communications soliciting such consent from Parent, such consent not be unreasonably withheld, conditioned or delayed)):
(ia) (Ai) split, combine or reclassify any shares of its capital stock, stock of the Company or (Bii) declare, set aside or pay any dividend or other distribution (whether in cash, stock, or property or any combination thereof) in respect of any shares of capital stockstock of the Company, except for: (A) a regular, quarterly cash dividend at a rate not in excess of $0.35 per share of Company Common Stock, declared and paid in accordance with past practice, and corresponding regular quarterly distributions payable to holders of Partnership Units, provided that no dividend shall be paid hereunder on account of any period subsequent to September 30, 2005; (B) distributions payable to holders of Series A Preferred Stock in accordance with its terms as of the date of this Agreement; (C) dividends or distributions distributions, declared, set aside or paid by any Company Subsidiary to the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned by the Company, or and (CD) redeem, repurchase or otherwise acquire or offer distributions required for the Company to redeem, repurchase or otherwise acquire any Company Securities or any Company Subsidiary Securities;maintain its status as a REIT pursuant to Section 5.2.
(iib) except for grants and awards, in type and amount consistent with ordinary course past practices, under the Company Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or equity equivalents (including, without limitation, stock appreciation rights) other than the (i) issuance of shares of Company Common Stock (A) upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms and terms, (ii) issuance of shares of Company Common Stock (or cash in an amount equal to the provisions hereof and (Bvalue thereof) upon the exercise settlement of Company Warrants outstanding on the date of this Agreement long term incentive awards and out performance plan awards in accordance with their present terms and the provisions hereof;
terms; (iii) acquire the issuance of shares of Company Common Stock pursuant to and in accordance with the terms of the Company ESIP in effect as of the date of this Agreement, or (by merger, consolidation, acquisition iv) the issuance of stock Company Common Stock in exchange for Partnership Units pursuant to the Partnership Agreement.
(c) except as set forth in Section 5.1(c) of the Company Disclosure Schedule (which sets forth all existing obligations in effect to purchase or assets sell real property and the purchases or otherwisesale price thereof), directly acquire, sell, encumber, transfer or indirectly, dispose of any assets, securities, properties, interests or businesses, in each case, other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items in assets outside the ordinary course of business which are material to the Company or any of the Company and Subsidiaries (whether by asset acquisition, stock acquisition or otherwise), except pursuant to obligations in effect on the Company Subsidiaries in a manner that is consistent with past practicedate hereof;
(iv) sell, lease or otherwise transfer, or create or incur any Encumbrance on, any of the Company’s or the Company Subsidiaries’ assets, securities, properties, interests or businesses, other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights in the ordinary course of business consistent with past practice;
(vd) except in the ordinary course of business or pursuant to credit facilities or other arrangements (including intercompany arrangements) in existence as of the date hereof (including, without limitation, (i) payment of this Agreementregular quarterly dividends as per Section 5.1(a); (ii) capital expenditures consistent with the Corporate Budget as per Section 5.1(g); and (iii) contractual obligations of the Company or Company Subsidiaries to other Company Subsidiaries or joint ventures), incur any amount of Indebtedness indebtedness for borrowed money, guarantee assume, guarantee, indemnify or endorse or otherwise become directly or indirectly responsible or liable for any Indebtedness indebtedness of a third party, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assets, or create or suffer any material Encumbrance lien thereupon, except in an amount equal to $10,000,000 in the aggregate;
(vie) except pursuant to any mandatory payments under any credit facilities in existence on the date hereof, pay, discharge or satisfy any claims, liabilities or obligations (Aabsolute, accrued, asserted or unasserted, contingent or otherwise), other than any payment, discharge or satisfaction in the ordinary course of business consistent with past practice;
(f) (i) enter into any new lease (or renew or extend any existing lease) for vacant space at a Company Property except for leases of not more than 10,000 square feet that are on commercially reasonable terms consistent with the Company’s past practices; (ii) terminate, modify or amend any Company Space Lease (provided, however, the Company or Company Subsidiaries may terminate, modify or amend a Company Space Lease so long as such terminated Company Space Lease is promptly replaced and the replacement, modified or amended lease is for commercially reasonable terms consistent with the Company’s past practices); (iii) terminate or grant any reciprocal easement or similar agreements affecting a Company Property (unless contractually obligated to do so or in connection with a transaction otherwise permitted by this Agreement), (iv) consent to or enter into the sublease or assignment of any Company Space Lease;
(g) except as set forth in the Capital Expenditures & Reserves Budget set forth in Section 5.1(g) of the Company Disclosure Schedule (the “Corporate Budget”), authorize, commit to or make any equipment purchases or capital expenditures in excess of $100,000 per individual item (exclusive of any tenant improvements or leasing commissions);
(h) change any of the accounting principles or practices used by it (except as required by GAAP, in which case written notice shall be provided to Parent and MergerCo prior to any such change);
(i) except as required by law or as set forth in Section 5.1(vi3.23 of the Company Disclosure Schedule, (i) enter into, adopt, amend or terminate any Employee Program, (ii) enter into, adopt, amend or terminate any agreement, arrangement, plan or policy between the Company or any of the Company Subsidiaries and one or more of their directors or executive officers, or (iii) except for normal increases in the ordinary course of business consistent with past practice and retention bonuses pursuant to the Company’s Severance and Stay Bonus Plan, increase in any manner the compensation or fringe benefits of any non-executive officer or employee or pay to any non-executive officer or employee any benefit not required by any Employee Program or arrangement as in effect as of the date hereof;
(j) grant to any officer, director or employee the right to receive any new severance, change of control or termination pay or termination benefits, grant any increase in the right to receive any severance, change of control or termination pay or termination benefits or enter into any new employment, loan, retention, consulting, indemnification, termination, change of control, severance or similar agreement with any officer, director or employee other than the grant of compensation and fringe benefits to any non-executive officer or employee hired after the date of this Agreement; provided, however; that consistent with the terms of this Agreement and Section 3.23 of the Company Disclosure Schedule, the Company may (i) accelerate the vesting and/or the payment of any existing benefits or awards and/or make any amendments to existing benefits, agreements or awards in order to facilitate such accelerated vesting and/or payments, and (ii) pay officers and key employees 2005 bonuses immediately prior to the Effective Time calculated in the manner set forth in Section 3.23 of the Company Disclosure Schedule;
(k) except to the extent required to comply with its obligations hereunder or with applicable law, amend its articles of incorporation or bylaws, limited partnership or limited liability company agreements, or similar organizational or governance documents;
(l) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger or plans of complete or partial liquidation or dissolution of inactive Company Subsidiaries);
(m) except as set forth in Section 5.1(m) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, settle or compromise any litigation (B) pursuant whether or not commenced prior to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof of this Agreement) other than settlements or entered into compromises for litigation where the amount paid (after giving effect to insurance proceeds actually received) in compliance with settlement or compromise does not exceed $1,000,000 (or $2,500,000 in the terms hereof, pay, discharge, satisfy outside aggregate) and which would not have or would not reasonably be likely to have a Company Material Adverse Effect;
(n) amend any term of any outstanding security of the Company or any Company Subsidiary;
(o) other than in the ordinary course of business, settle modify or offer or propose amend any Material Contract to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against which the Company or any Company Subsidiary, (II) any stockholder litigation Subsidiary is a party or claim in writing against the Company or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the Transaction;
(vii) change any of the accounting principles or practices used by it except as required by GAAP;
(viii) except for agreements existing as of the date of this Agreement, enter into any agreement or engage in any transaction with one or more of the Company’s directors, officers or stockholders, 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases in the ordinary course of business consistent with past practice, increase the compensation, bonus or other benefits of any director, officer or senior employee;
(x) (A) grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (B) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), or (C) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreement;
(xi) except to the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary;
(xii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger);
(xiii) (A) enter into any Contract that would constitute a Material Contract if it had been entered into as of the date of this Agreement or (B) amend, modify in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, rights or claims or benefits of under any such Material Contract;
(p) permit any insurance policy naming the Company or any Company Subsidiary thereunder; providedof its subsidiaries or officers or directors as a beneficiary or an insured or a loss payable payee, howeveror the Company’s directors and officers liability insurance policy, that to be canceled, terminated or allowed to expire, unless such entity shall have obtained an insurance policy with substantially similar terms and conditions to the foregoing shall not prevent canceled, terminated or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing in the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (II) entering into any client or customer Contracts in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required)expired policy;
(xiv) enter into any new line of business;
(xv) enter into any Contract to make a capital expenditure or to purchase a capital asset, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth in the budget related to such expenditures provided to Parent prior to the date of this Agreement;
(xviq) enter into an agreement to take any of the foregoing actions;
(r) except as expressly required for change in law or regulation, change any of its methods of reporting income and deductions for Federal income tax purposes, but only if such change would reasonably be expected to have a Company Material Adverse Effect; or
(s) create, renew or amend, or take any action that may result in the creation, renewal or amendment, of any agreement or contract or other binding obligation of the Company or any Company Subsidiary containing any material restriction on the ability of the Company or any Company Subsidiary to conduct its business as it is presently being conducted.
Appears in 1 contract
Conduct of Business by the Company. During the period from the date of this Agreement to the Company Merger Effective Time, except as otherwise contemplated expressly permitted by this Agreement or unless Parent shall otherwise consent as agreed to in advance in writingwriting by Parent, the Company shallshall use its commercially reasonable efforts to, and shall cause each of the Company Subsidiaries to use its commercially reasonable efforts to, (i) carry on their respective businesses in all material respects in the usual, regular and ordinary course, consistent with past practice or practice, and (ii) (A) maintain its material assets and properties in their current expense budgets as disclosed to Parentcondition (normal wear and tear excepted), and, to the extent substantially consistent therewith, use their commercially reasonable efforts to:
(aB) Preserve preserve intact in all material respects their present business organizations,
, ongoing businesses and significant relationships with tenants, agricultural advisors and other third parties having business dealings with them, (bC) Maintain provided it does not require additional compensation (in effect all which case the Company shall obtain the consent in writing of their foreignParent), federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep keep available the services of their directors, present officers and key employees, and
and (dD) Subject to preserve the right Company’s status as a REIT within the meaning of contract parties to exercise applicable rights, maintain satisfactory relationships with their customers, clients, lenders, suppliers, vendors and others having material business relationships with themthe Code. Without limiting the generality of the foregoing, neither the Company nor any of the Company Subsidiaries will (except as expressly permitted or contemplated by this Agreement, as set forth in Section 5.1 6.1 of the Company Disclosure Schedule or to the extent that Parent shall otherwise consent in writing (it being understood that Parent shall respond within five Business Days to the Company’s communications soliciting such consent from Parentwriting, such consent not to be unreasonably withheld, conditioned delayed or delayed)conditioned):
(i) (Aa) split, combine combine, reclassify or reclassify subdivide any shares of its capital stock, units or other equity securities or ownership interests of the Company or the Company Subsidiaries or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of Company Common Stock or any equity interests or other securities of the Company Subsidiaries;
(Bb) declare, set aside or pay any dividend on, or make any other distribution distributions (whether in cash, stock, stock or property or any combination thereofotherwise) in respect of of, any shares of capital stockstock of the Company, any units of the Partnership or other equity securities or ownership interests in the Company or any Company Subsidiary, except for: (i) the declaration and payment by the Company of a regular, quarterly cash dividend at a rate not in excess of $0.0625 per share of Company Common Stock, declared and paid in accordance with past practice (it being agreed that the timing of any such quarterly dividends will be coordinated so that, if either the holders of Parent Common Stock or the holders of shares of Company Common Stock receive a dividend for a particular quarter prior to the Closing Date, then the holders of shares of Company Common Stock and the holders of Parent Common Stock, respectively, shall receive a dividend for such quarter prior to the Closing Date; provided, however, that the record and payment dates for the Company’s dividends pursuant to this Section 6.1(b) shall be the same as Parent’s record and payment dates, to the extent that such dates were not declared prior to the date of this Agreement); (ii) the regular distributions that are required to be made in respect of the Partnership OP Units in connection with any dividends paid on the shares of the Company Common Stock, (iii) dividends or distributions distributions, declared, set aside or paid by any Company Subsidiary to the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned by the Company, or (C) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Company Securities or any Company Subsidiary Securities;
(ii) except for grants ; and awards, in type and amount consistent with ordinary course past practices, under the Company Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or equity equivalents (including, without limitation, stock appreciation rights) other than the issuance of shares of Company Common Stock (A) upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof and (B) upon the exercise of Company Warrants outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof;
(iii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, in each case, other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items in the ordinary course of business of the Company and the Company Subsidiaries in a manner that is consistent with past practice;
(iv) sell, lease or otherwise transfer, or create or incur any Encumbrance on, any of the Company’s or distributions required for the Company Subsidiaries’ assets, securities, properties, interests or businesses, other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights in the ordinary course of business consistent with past practice;
(v) except in the ordinary course of business or pursuant to credit facilities or other arrangements (including intercompany arrangements) in existence as of the date of this Agreement, incur any amount of Indebtedness for borrowed money, guarantee any Indebtedness of a third party, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assets, or create or suffer any material Encumbrance thereupon;
(vi) except (A) as set forth in Section 5.1(vi) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, or (B) pursuant to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of maintain its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the Transaction;
(vii) change any of the accounting principles or practices used by it except as required by GAAP;
(viii) except for agreements existing as of the date of this Agreement, enter into any agreement or engage in any transaction with one or more of the Company’s directors, officers or stockholders, 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases in the ordinary course of business consistent with past practice, increase the compensation, bonus or other benefits of any director, officer or senior employee;
(x) (A) grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (B) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), or (C) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreement;
(xi) except to the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary;
(xii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger);
(xiii) (A) enter into any Contract that would constitute a Material Contract if it had been entered into as of the date of this Agreement or (B) amend, modify in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing in the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (II) entering into any client or customer Contracts in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required);
(xiv) enter into any new line of business;
(xv) enter into any Contract to make a capital expenditure or to purchase a capital asset, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth in the budget related to such expenditures provided to Parent prior to the date of this Agreement;
(xvi) enter into an agreement to take any of the foregoing actions.status as
Appears in 1 contract
Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, except as otherwise contemplated by this Agreement set forth in Section 4.01(a) of the Company Disclosure Schedule or unless Parent shall otherwise consent as consented to in writing in advance in writingby Parent or as expressly permitted pursuant to this Section 4.01(a)(i) through (xvi) or otherwise pursuant to this Agreement, the Company shall, and shall cause each of the Company its Subsidiaries to, carry on their respective businesses its business in the usual, regular and ordinary course, course consistent with past practice or its current expense budgets as disclosed to Parent(including in respect of research and development activities and programs) and in compliance in all material respects with all applicable laws, rules, regulations and treaties and, to the extent substantially consistent therewith, use their commercially reasonable efforts to:
(a) Preserve to preserve intact their present its current business organizations,
(b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep keep available the services of their directorsits current officers, officers employees and key employees, and
(d) Subject to the right of contract parties to exercise applicable rights, maintain satisfactory consultants and preserve its relationships with their customers, clients, lenders, suppliers, vendors licensors, licensees, distributors and others having material business relationships dealings with themit with the intention that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without In addition to and without limiting the generality of the foregoing, neither during the Company nor any period from the date of this Agreement to the Company Subsidiaries will (Effective Time, except as expressly permitted or contemplated by this Agreement, as otherwise set forth in Section 5.1 4.01(a) of the Company Disclosure Schedule or as otherwise expressly permitted pursuant to this Agreement, the extent that Parent Company shall otherwise consent in writing (it being understood that Parent not, and shall respond within five Business Days to the Company’s communications soliciting such consent from not permit any of its Subsidiaries to, without Parent, such consent not be unreasonably withheld, conditioned or delayed)):'s prior written consent:
(i) (A) split, combine or reclassify any shares of its capital stock, (Bx) declare, set aside or pay any dividend dividends on, or make any other distribution distributions (whether in cash, stock, stock or property or any combination thereofproperty) in respect of, any of any shares of its capital stock, and other than dividends or distributions declared, set aside by a direct or paid by any Company indirect wholly owned Subsidiary to of the Company to its shareholders, (y) split, combine or to reclassify any Company Subsidiary that isof its capital stock or issue or authorize the issuance of any other securities in respect of, directly in lieu of or indirectly, wholly owned by the Company, in substitution for shares of its capital stock or (Cz) redeempurchase, repurchase or otherwise acquire or offer to redeem, repurchase redeem or otherwise acquire any Company Securities shares of its capital stock or any other securities thereof or any 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 agreements existing on the date hereof between the Company Subsidiary Securitiesor any of its Subsidiaries and any director, officer, employee or consultant of the Company or any of its Subsidiaries (complete and accurate copies of which have been heretofore delivered to Parent);
(ii) except for grants and awardsissue, in type and amount consistent with ordinary course past practicesdeliver, under the Company Equity Incentive Plansell, as amendedgrant, in connection with new hires and promotionspledge or otherwise encumber or subject to any Lien any shares of its capital stock, authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class other voting securities or any other securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or equity equivalents (includingconvertible securities, without limitationor any "phantom" stock, "phantom" stock rights, stock appreciation rights) rights or stock based performance units, including pursuant to Contracts as in effect on the date hereof (other than the issuance of shares of Company Common Stock (A) upon the conversion of Company Preferred Stock or Company Notes, or the exercise of Company Stock Options (including rights under the ESPP, subject to Section 5.04(b)) or Warrants, in each case outstanding on the date of this Agreement hereof in accordance with their present terms and the provisions hereof and (B) upon the exercise of Company Warrants outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof);
(iii) acquire amend (by mergerx) the Company Certificate or the Company By-laws or other comparable charter or organizational documents of any of the Company's Subsidiaries or (y) the Certificate of Designation with respect to the Company Preferred Stock or the Indenture dated as of August 5, consolidation2002 between the Company and Wells Fargo Bank, acquisition of stock or assets or otherwise)National Association, directly or indirectly, any assets, securities, properties, interests or businesseswith respect to the Coxxxxx Notes, in each case, other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment case except as may be required by law or the rules and other similar items in the ordinary course of business regulations of the Company and the Company Subsidiaries in a manner that is consistent with past practiceSEC or The Nasdaq Stock Market, Inc.;
(iv) sell, lease directly or otherwise transferindirectly acquire (x) by merging or consolidating with, or create by purchasing assets of, or incur by any Encumbrance onother manner, any person or division, business or equity interest of any person or (y) any asset or assets that, individually, has a purchase price in excess of $500,000 or, in the Company’s aggregate, have a purchase price in excess of $1,000,000, except for new capital expenditures, which shall be subject to the limitations of clause (vii) below, and except for purchases of components, raw materials or the Company Subsidiaries’ assets, securities, properties, interests or businesses, other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights supplies in the ordinary course of business consistent with past practice;
(v) (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 or any interests therein (including securitizations), except for sales of inventory and used equipment in the ordinary course of business consistent with past practice; or pursuant (y) enter into, modify or amend any lease of property, except for modifications or amendments that are not materially adverse to credit facilities or other arrangements the Company and its Subsidiaries taken as a whole;
(including intercompany arrangementsvi) in existence as of the date of this Agreement, (x) incur any amount of Indebtedness indebtedness for borrowed money, money or guarantee any Indebtedness such indebtedness of a third partyanother person, issue or sell any debt securitiessecurities or calls, options, warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another person, enter into any "keep well" or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing or (y) make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assetscontributions to, or create or suffer investments in, any material Encumbrance thereuponother person, other than to employees in the ordinary course of business consistent with past practice;
(vivii) except (A) as make any new capital expenditure or expenditures in excess of the amounts set forth in Section 5.1(vi4.01(a)(vii) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, or (B) pursuant to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the Transaction;
(vii) change any of the accounting principles or practices used by it except as required by GAAP;
(viii) except as required by law or any judgment by a court of competent jurisdiction, (v) pay, discharge, settle or satisfy any material claims, liabilities, obligations or litigation (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 in accordance with their terms, of liabilities disclosed, reflected or reserved against in the most recent financial statements (or the notes thereto) of the Company included in the Filed Company SEC Documents (for agreements existing as amounts not in excess of such reserves) or incurred since the date of this Agreement, enter into any agreement or engage in any transaction with one or more of the Company’s directors, officers or stockholders, 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect such financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases statements in the ordinary course of business consistent with past practice, increase (w) cancel any indebtedness (other than upon the compensation, bonus or other benefits conversion of any directorCompany Notes outstanding on the date hereof in accordance with their terms on the date hereof), officer (x) waive or senior employeeassign any claims or rights of substantial value or (y) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, knowingly fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar agreement containing provisions prohibiting a third party from purchasing the capital stock of the Company or otherwise seeking to influence or exercise control over the Company to which the Company or any of its Subsidiaries is a party or (z) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, knowingly 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 agreement to which the Company or any of its Subsidiaries is a party;
(x) (A) grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (Bix) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), or (C) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreement;
(xi) except material Contracts relating to the extent required to comply with its obligations hereunder research, clinical trial, development, distribution, sale, supply, license, marketing, co-promotion or with applicable Law, amend its certificate manufacturing of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary;
(xii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger);
(xiii) (A) enter into any Contract that would constitute a Material Contract if it had been entered into as of the date of this Agreement or (B) amend, modify in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits products of the Company or any Subsidiary of the Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent or preclude products licensed by the Company or any Subsidiary of the Company, or the Intellectual Property Rights of the Company or any Subsidiary from of the Company, other than (Ix) negotiating and/or renewing confidentiality agreements entered into in the ordinary course of business consistent with past practice containing customary terms which do not impose any Material Contracts that are scheduled obligations on the Company or its Subsidiaries other than those relating to expire upon their terms or the treatment of confidential information, (IIy) entering consulting agreements entered into any client or customer Contracts in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) which individually have aggregate values of no more than $50,000 and (xii), for which Parent’s z) pursuant to any such Contracts currently in place (that have been disclosed in writing to Parent prior written consent shall be required)to the date hereof) in accordance with their terms as of the date hereof;
(xivx) enter into into, modify, amend or terminate any new line material Contract or waive, release or assign any material rights or claims thereunder, which if so entered into, modified, amended, terminated, waived, released or assigned would reasonably be expected to (A) materially adversely affect the Company, (B) impair in any material respect the ability of businessthe Company to perform its obligations under this Agreement or (C) prevent or materially delay the consummation of the transactions contemplated by this Agreement;
(xvxi) enter into any Contract to make 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 a capital expenditure 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 purchase the loss of a capital assetbenefit under, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth result in the budget related creation of any Lien in or upon any of the properties or other assets of the Company or any of its Subsidiaries 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 expenditures provided Contract;
(xii) enter into any Contract containing any restriction on the ability of the Company or any of its Subsidiaries to assign its rights, interests or obligations thereunder, unless such restriction expressly excludes any assignment to Parent or any of its Subsidiaries in connection with or following the consummation of the Merger and the other transactions contemplated by this Agreement;
(xiii) sell, transfer or license to any person or otherwise extend, amend or modify any rights to the Intellectual Property Rights of the Company or any of its Subsidiaries, other than pursuant to (x) confidentiality agreements entered into in the ordinary course of business consistent with past practice containing customary terms which do not impose any obligations on the Company or its Subsidiaries other than those relating to the treatment of confidential information, (y) consulting agreements entered into in the ordinary course of business consistent with past practice which individually have aggregate values of no more than $50,000 and (z) any such Contracts currently in place (that have been disclosed in writing to Parent prior to the date hereof) in accordance with their terms as of the date hereof;
(xiv) except as otherwise contemplated by this Agreement or as required to ensure that any Company Benefit Plan or Company Benefit Agreement is not then out of compliance with applicable law or to comply with any Contract or Company Benefit Plan or Company Benefit Agreement entered into prior to the date hereof (complete and accurate copies of which have been heretofore delivered to Parent), (A) adopt, enter into, terminate or amend (I) any collective bargaining agreement or Company Benefit Plan or (II) any Company Benefit Agreement or other agreement, plan or policy involving the Company or any of its Subsidiaries and one or more of their respective current or former directors, officers, employees or consultants, (B) increase in any manner the compensation, bonus or fringe or other benefits of, or pay any bonus of any kind or amount whatsoever to, any current or former director, officer, employee or consultant, except for any planned salary increases and payment of bonuses, each as described in Section 4.01(a)(xiv) of the Company Disclosure Schedule, (C) pay any benefit or amount not required under any Company Benefit Plan or Company Benefit Agreement or any other benefit plan or arrangement of the Company or any of its Subsidiaries as in effect on the date of this Agreement, other than as contemplated in clause (B), (D) grant or pay any severance or termination pay or increase in any manner the severance or termination pay of any current or former director, officer, employee or consultant of the Company or any of its Subsidiaries, (E) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement, Company Benefit Agreement or Company Benefit Plan (including the grant of Company Stock Options (including rights under the ESPP), Company Restricted Stock, "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 in any Company Benefit Agreements, Company Benefit Plans or agreements or awards made thereunder), other than as contemplated in clause (B), (F) amend or modify any Stock Option or Warrant, (G) take any action to fund or in any other way secure the payment of compensation or benefits under any employee plan, agreement, contract or arrangement or Company Benefit Plan or 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 (I) 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;
(xv) except as required by GAAP or by the Company's independent public accountants, revalue any material assets of the Company or any of its Subsidiaries or make any material change in accounting methods, principles or practices; or
(xvi) enter into an agreement authorize any of, or commit, resolve, propose or agree to take any of of, the foregoing actions.
Appears in 1 contract
Samples: Merger Agreement (Johnson & Johnson)
Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, except as otherwise contemplated by this Agreement or unless Parent shall otherwise consent in advance in writingAgreement, the Company shallshall use its commercially reasonable efforts to, and shall cause each of the Company Subsidiaries to use its commercially reasonable efforts to, carry on their respective businesses in the usual, regular and ordinary course, consistent with past practice or its current expense budgets as disclosed to Parentand in material compliance with all Laws, and, to the extent substantially consistent therewith, and use their commercially reasonable efforts to:
(a) Preserve to preserve intact their present business organizations,
(b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep keep available the services of their directors, present officers and key employeesemployees and preserve their goodwill, and
(d) Subject to the right of contract parties to exercise applicable rightsCompany’s status as a REIT, maintain satisfactory and their relationships with their customers, clients, lenders, suppliers, vendors and others having material business relationships dealings with them. The Company shall confer on a regular basis with Eagles, report on operational matters and advise Eagles orally and in writing of any Company Material Adverse Effect or any matter that could reasonably be expected to result in the Company being unable to deliver the certificate described in Section 7.3(a). Without limiting the generality of the foregoing, neither the Company nor any of the Company Subsidiaries will (except as expressly permitted by this Agreement or as contemplated by this Agreementthe transactions contemplated hereby, as set forth in Section 5.1 5.2 of the Company Disclosure Schedule or to the extent that Parent Eagles shall otherwise consent in writing (it being understood that Parent Eagles shall respond within five (5) Business Days to the Company’s communications soliciting such consent from ParentEagles, such consent not be unreasonably withheld, conditioned or delayed)):
(ia) (Ai) split, combine or reclassify any shares of its capital stock, stock of the Company or (Bii) declare, set aside or pay any dividend or other distribution (whether in cash, stock, or property or any combination thereof) in respect of any shares of capital stockstock of the Company, except for: (x) regular quarterly dividends to stockholders of the Company in an amount not to exceed 90% of the Company’s estimated REIT taxable income for such period, provided that such dividends do not exceed $0.03 per Share in any quarter, and (y) dividends or distributions distributions, declared, set aside or paid by any Company Subsidiary to the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned by the Company, or (C) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any except for the Company Securities or any Company Subsidiary SecuritiesPre-Closing Dividend;
(iib) except for grants and awards, in type and amount consistent with ordinary course past practices, under the Company Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or equity equivalents (including, without limitation, stock appreciation rights) other than the (i) issuance of company common shares of Company Common Stock (A) upon the exercise of the Company Stock Options outstanding on the date of this Agreement in accordance with their present terms and or (ii) issuance of company common shares (or cash in an amount equal to the provisions hereof and (Bvalue thereof) upon the exercise settlement of Company Warrants outstanding on the date of this Agreement long term incentive awards and out performance plan awards in accordance with their present terms and the provisions hereofterms;
(iiic) acquire except as set forth in Section 5.2(c) of the Company Disclosure Schedule (which sets forth all existing obligations in effect to purchase or sell mortgage loans and the purchases or sale price thereof), acquire, sell, encumber, transfer or dispose of any assets outside the ordinary course of business which are material to the Company or any of the Company Subsidiaries (whether by mergerasset acquisition, consolidation, stock acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, in each case, other than licenses ;
(d) except for the renewal of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items repurchase agreements in the ordinary course of business of the Company and the Company Subsidiaries in a manner that is consistent with past practice;
(iv) sell, lease or otherwise transfer, or create or incur any Encumbrance on, any of the Company’s or business (provided that the Company Subsidiaries’ assets, securities, properties, interests or businesses, other than the sale of equipment, products shall have consulted in advance with Eagles regarding such renewal and services and the licensing of Owned Intellectual Property Rights in the ordinary course of business consistent with past practice;
(v) except in the ordinary course of business or pursuant to credit facilities or other arrangements (including intercompany arrangements) in existence as of the date of this Agreementshall not effect such renewal if Eagles reasonably objects), incur any amount of Indebtedness for borrowed money, guarantee assume, guarantee, indemnify or endorse or otherwise become directly or indirectly responsible or liable for any Indebtedness of a third party, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assets, or create or suffer any material Encumbrance lien thereupon;
(vie) except pursuant to any mandatory payments under any credit facilities in existence on the date hereof, pay, discharge or satisfy any claims, liabilities or obligations (Aabsolute, accrued, asserted or unasserted, contingent or otherwise), other than any payment, discharge or satisfaction in the ordinary course of business consistent with past practice;
(f) change any of the accounting principles or practices used by it (except as required by GAAP, in which case written notice shall be provided to Eagles prior to any such change);
(g) (i) enter into, adopt, amend or terminate any Employee Program, (ii) enter into, adopt, amend or terminate any agreement, arrangement, plan or policy between Eagles or any of the Eagles Subsidiaries and one or more of their directors or executive officers, or (iii) except for normal increases in the ordinary course of business consistent with past practice, increase in any manner the compensation or fringe benefits of any non-executive officer or employee or pay to any non-executive officer or employee any benefit not required by any Employee Program or arrangement as in effect as of the date hereof;
(h) grant to any officer, director or employee the right to receive any new severance, change of control or termination pay or termination benefits, grant any increase in the right to receive any severance, change of control or termination pay or termination benefits or enter into any new employment, loan, retention, consulting, indemnification, termination, change of control, severance or similar agreement with any officer, director or employee other than the grant of compensation and fringe benefits to any non-executive officer or employee hired after the date of this Agreement;
(i) except to the extent required to comply with its obligations hereunder or with applicable law, amend its articles of incorporation or bylaws, limited partnership or limited liability company agreements, or similar organizational or governance documents;
(j) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger or plans of complete or partial liquidation or dissolution of inactive Company Subsidiaries);
(k) except as set forth in Section 5.1(vi5.2(k) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, settle or compromise any litigation (B) pursuant whether or not commenced prior to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof of this Agreement) other than settlements or entered into compromises for litigation where the amount paid (after giving effect to insurance proceeds actually received) in compliance with settlement or compromise does not exceed $100,000 (or $500,000 in the terms hereof, pay, discharge, satisfy outside aggregate) and which would not have or would not reasonably be likely to have a Company Material Adverse Effect;
(l) amend any term of any outstanding security of the Company or any Company Subsidiary;
(m) other than in the ordinary course of business, settle enter into any Material Contract or offer modify or propose amend any Material Contract to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against which the Company or any Company SubsidiarySubsidiary is a party or waive, release or assign any material rights or claims under any such Material Contract;
(IIn) permit any stockholder litigation or claim in writing against insurance policy naming the Company or any of its subsidiaries or officers or directors as a beneficiary or (III) any litigationan insured or a loss payable payee, arbitrationor the Company’s directors and officers liability insurance policy, proceeding to be canceled, terminated or dispute that relates allowed to expire, unless such entity shall have obtained an insurance policy with substantially similar terms and conditions to the Transactioncanceled, terminated or expired policy;
(viio) except as expressly required for change in law or regulation, change any of the accounting principles or practices used by it except as required by GAAPits methods of reporting income and deductions for Federal income tax purposes, but only if such change would reasonably be expected to have a Company Material Adverse Effect;
(viiip) except for agreements existing as create, renew or amend, or take any action that may result in the creation, renewal or amendment, of the date of this Agreement, enter into any agreement or engage in contract or other binding obligation of the Company or any transaction with one Company Subsidiary containing any material restriction on the ability of the Company or more of the Company’s directors, officers Subsidiary to conduct its business as it is presently being conducted; or
(q) take any action inconsistent with the Interim Management Agreement or stockholders, or with omit to take 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control withaction contemplated thereby;
(ixr) except as required by Law make or rescind any Tax election or settle or compromise any Tax liability of the Company or any contractual commitment or Employee Program in existence on the date hereof, and except for increases in the ordinary course of business consistent with past practice, increase the compensation, bonus or other benefits of any director, officer or senior employeeits subsidiaries;
(xs) (A) grant to amend any director, officer or employee the right to receive any new severanceTax Return, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (B) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), or (C) establishan annual Tax accounting period, adopt or amend change any Tax accounting method (except as required by applicable law) or execute or consent to any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock waivers extending the statutory period of limitations with respect to the collection or other benefit plan or agreementassessment of any taxes;
(xit) except to take any action that would prevent or impede the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylawsMerger from qualifying as a reorganization under Code Section 368(a); or
(u) authorize any of, or commit or agree to take any of, the certificate of formation, limited partnership foregoing actions or limited liability company agreements, or similar charter, organizational or governance documents any action that would result in a breach of any representation or warranty of the Company Subsidiary;
(xii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger);
(xiii) (A) enter into any Contract that would constitute a Material Contract if it had been entered into contained in this Agreement as of the date when made or as of this Agreement any future date or (B) amend, modify would result in any material respect or terminate any Material Contract or any Contract referred to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing in the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (II) entering into any client or customer Contracts in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required);
(xiv) enter into any new line of business;
(xv) enter into any Contract to make a capital expenditure or to purchase a capital asset, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth in the budget related to such expenditures provided to Parent prior to the date of this Agreement;
(xvi) enter into an agreement to take any of the foregoing actionsconditions to the Merger not being satisfied or in a material delay in the satisfaction of such conditions. Notwithstanding the foregoing, the Company and its subsidiaries may take any action authorized by the Manager pursuant to the Interim Management Agreement and no action by the Manager shall be deemed a violation of Article IV or this Section 5.2.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Sunset Financial Resources Inc)
Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, except with the prior written consent of Parent (which shall not be unreasonably delayed) or as otherwise specifically contemplated by this Agreement or unless Parent shall otherwise consent as set forth in advance in writingSection 4.01(a) of the Company Letter, the Company shall, and shall cause each of the Company its Subsidiaries to, carry on their respective businesses in the usual, regular and ordinary course, course consistent with past practice or its current expense budgets as disclosed and use commercially reasonable efforts to Parent, comply with all applicable Laws and, to the extent substantially consistent therewith, use their commercially reasonable efforts to:
(a) Preserve intact their present business organizations,
(b) Maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations,
(c) Keep to keep available the services of their directorspresent officers, officers software developers and key other employees, and
(d) Subject to the right of contract parties to exercise applicable rightspreserve their assets and technology, maintain satisfactory their relationships with their customers, clients, lenders, suppliers, vendors licensors, licensees, distributors and others having material business relationships dealings with themthem and to maintain their franchises, rights and Permits. Without in any way limiting the generality of the foregoing, neither during the Company nor any period from the date of this Agreement to the Company Subsidiaries will Effective Time, except with the prior written consent of Parent (except which shall not be unreasonably delayed) or as expressly permitted or specifically contemplated by this Agreement, Agreement or as set forth in Section 5.1 4.01(a) of the Company Disclosure Schedule or Letter (with specific reference to the extent that Parent subsection of this Section 4.01 to which the information stated in such disclosure relates), the Company shall otherwise consent in writing (it being understood that Parent not, and shall respond within five Business Days to the Company’s communications soliciting such consent from Parent, such consent not be unreasonably withheld, conditioned or delayed)):permit any of its Subsidiaries to:
(i) (A) split, combine or reclassify any shares of its capital stock, (B) declare, set aside or pay any dividend dividends on, or make any other distribution distributions (whether in cash, stock, stock or property or any combination thereofproperty) in respect of, any of its capital stock or other equity or voting interests, except for dividends by a direct or indirect wholly owned Subsidiary of the Company to its parent, (B) split, combine or reclassify any of its capital 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, shares of its capital stock or other equity or voting interests, (C) purchase, redeem or otherwise acquire any shares of capital stock, and dividends other equity or distributions declared, set aside voting interests or paid by any Company Subsidiary to other securities of the Company or to any Company Subsidiary that is, directly or indirectly, wholly owned by the Company, or (C) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Company Securities of its Subsidiaries or any Company Subsidiary Securities;
(ii) except for grants and awards, in type and amount consistent with ordinary course past practices, under the Company Equity Incentive Plan, as amended, in connection with new hires and promotions, authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, calls or rights to purchase acquire any such shares or otherwiseother securities (including any Stock Options, Restricted Shares or RSUs, except pursuant to the forfeiture conditions of such Stock Options, Restricted Shares or RSUs or the cashless exercise or tax withholding provisions of such Stock Options, Restricted Shares or RSUs, in each case only if and to the extent required by the terms of such awards as in effect on the date of this Agreement) or (D) take any stock action that would result in any amendment, modification or change of any class term of any Indebtedness of the Company or any of its Subsidiaries; 30 Table of Contents (ii) issue, deliver, sell, pledge or otherwise encumber any (A) shares of its capital stock, other securities equity or equity equivalents voting interests or Equity Equivalents (including, without limitation, stock appreciation rights) other than the issuance of shares of Company Common Stock (A) upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof and (B) upon the exercise settlement of Company Warrants outstanding on the date of this Agreement in accordance with their present terms and the provisions hereof;
(iii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businessesRSUs, in each case, other than licenses of Licensed Intellectual Property Rights, inventory, supplies, equipment and other similar items in the ordinary course of business of the Company and the Company Subsidiaries in a manner that is consistent with past practice;
(iv) sell, lease or otherwise transfer, or create or incur any Encumbrance on, any of the Company’s or the Company Subsidiaries’ assets, securities, properties, interests or businesses, other than the sale of equipment, products and services and the licensing of Owned Intellectual Property Rights in the ordinary course of business consistent with past practice;
(v) except in the ordinary course of business or pursuant to credit facilities or other arrangements (including intercompany arrangements) in existence as of the date of this Agreement, incur any amount of Indebtedness for borrowed money, guarantee any Indebtedness of a third party, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assets, or create or suffer any material Encumbrance thereupon;
(vi) except (A) as set forth in Section 5.1(vi) of the Company Disclosure Schedule, provided that such settlement does not exceed the amounts accrued therefor in the most recent balance sheet of the Company set forth in the Company SEC Reports, or (B) pursuant to any mandatory payments (including cash sweep arrangements) under any credit facilities in existence on the date hereof or entered into in compliance with the terms hereof, pay, discharge, satisfy outside the ordinary course of business, settle or offer or propose to settle, (I) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Company Subsidiary, (II) any stockholder litigation or claim in writing against the Company or any of its officers or directors or (III) any litigation, arbitration, proceeding or dispute that relates to the Transaction;
(vii) change any of the accounting principles or practices used by it except as required by GAAP;
(viii) except for agreements existing as of the date of this Agreement, enter into any agreement or engage in any transaction with one or more of the Company’s directors, officers or stockholders, 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 stockholders is (x) a director, officer, manager, managing partner, managing member (or the holder of any office with similar authority), (y) has a direct or indirect financial interest, or (z) directly or indirectly controls, is controlled by or is under common control with;
(ix) except as required by Law or any contractual commitment or Employee Program in existence on the date hereof, and except for increases in the ordinary course of business consistent with past practice, increase the compensation, bonus or other benefits of any director, officer or senior employee;
(x) (A) grant to any director, officer or employee the right to receive any new severance, change of control or termination pay or termination benefits, or grant any increase in any existing severance, change of control or termination pay or termination benefits to any officer, director or employee, (B) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), or (C) establish, adopt or amend (except as required by applicable law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or agreement;
(xi) except to the extent required to comply with its obligations hereunder or with applicable Law, amend its certificate of incorporation or bylaws, or the certificate of formation, limited partnership or limited liability company agreements, or similar charter, organizational or governance documents of any Company Subsidiary;
(xii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger);
(xiii) (A) enter into any Contract that would constitute a Material Contract if it had been entered into case outstanding as of the date of this Agreement or (B) amend, modify in any material respect or terminate any Material Contract or any Contract referred and only if and to in clause (A) or otherwise waive, release or assign any material rights, claims or benefits the extent required by the terms of the Company or any Company Subsidiary thereunder; provided, however, that the foregoing shall not prevent or preclude the Company or any Company Subsidiary from (I) negotiating and/or renewing Stock Plans as in the ordinary course of business consistent with past practice any Material Contracts that are scheduled to expire upon their terms or (II) entering into any client or customer Contracts in the ordinary course of business consistent with past practice (except for those described in Sections 3.18(a)(xi) and (xii), for which Parent’s prior written consent shall be required);
(xiv) enter into any new line of business;
(xv) enter into any Contract to make a capital expenditure or to purchase a capital asset, which expenditure or purchase exceeds the amount or amounts allocated therefor as set forth in the budget related to such expenditures provided to Parent prior to effect on the date of this Agreement), or (B) securities convertible into, or exchangeable or exercisable for, or any options, warrants, calls or rights to acquire, any such stock, interests or Equity Equivalents;
(xvi) enter into an agreement to take any of the foregoing actions.
Appears in 1 contract
Samples: Merger Agreement (Netezza Corp)
