Conduct of Business of the Company and its Subsidiaries. (a) Except as set forth in Section 5.01(a) of the Company Disclosure Schedule, contemplated by this Agreement, required by Law or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course and, to the extent consistent therewith, use reasonable best efforts to preserve substantially intact its current business organizations, to keep available the services of its current officers and employees and to preserve its relationships with significant customers, suppliers, licensors, licensees, distributors, lessors and others having significant business dealings with it. Without limiting the generality of the foregoing, except as set forth in Section 5.01(a) of the Company Disclosure Schedule, contemplated by this Agreement, required by Law (including, as applicable, Section 409A of the Code) or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to: (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock, other than dividends or distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent and other than as required pursuant to the Rights Agreement; (ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in lieu of or in substitution for shares of its capital stock; (iii) purchase, redeem or otherwise acquire any shares of its capital stock or any rights, warrants or options to acquire any such shares, other than (A) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of the Company Stock Options or as required pursuant to the terms of the ESPP, (B) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Incentive Plans and (C) the acquisition by the Company of Company Stock Options, Company Restricted Stock Units and shares of Company Restricted Stock in accordance with their terms in effect as of the date of this Agreement in connection with the forfeiture of such awards; (iv) issue, deliver or sell any shares of its capital stock, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, other than (A) upon the exercise of Company Stock Options and rights under the ESPP outstanding on the date of this Agreement, in each case in accordance with their present terms, (B) upon the vesting of Company Restricted Stock Units outstanding on the date of this Agreement, in accordance with their present terms, (C) as required to comply with any Company Benefit Plan as in effect on the date of this Agreement, (D) upon the conversion of the Convertible Notes outstanding on the date of this Agreement, in accordance with their present terms and (E) the issuance of Rights and the issuance of Company Common Stock or Preferred Stock of the Company upon the exercise of Rights, in each case, pursuant to the terms and conditions of the Rights Agreement; (v) amend the Company Certificate of Incorporation or the Company Bylaws or the comparable organizational documents of any Subsidiary of the Company; (vi) merge or consolidate with, or purchase an equity interest in or a substantial portion of the assets of, any person or any division or business thereof other than purchases of assets where the amount of the consideration paid or transferred by the Company and its Subsidiaries in connection with all such transactions does not exceed one million dollars ($1,000,000) in the aggregate; (vii) assign, sublease, terminate, waive any material rights under, or materially amend any Lease, or sell, lease or otherwise dispose of any of its properties or assets with an aggregate value in excess of one million dollars ($1,000,000), other than sales of inventory and other assets (other than Owned Real Property or Leased Real Property) in the ordinary course of business; (viii) (A) incur any indebtedness for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any such indebtedness or any debt securities of another person or enter into any “keep well” or other agreement to maintain any financial statement condition of another person (collectively, “Indebtedness”), other than (1) Indebtedness incurred, assumed or otherwise entered into in the ordinary course of business (including any borrowings under the Company’s existing credit facilities and in respect of letters of credit) for additional amounts after the date hereof not in excess of five million dollars ($5,000,000) in the aggregate and (2) Indebtedness incurred in connection with the refinancing of any Indebtedness existing on the date of this Agreement or permitted to be incurred, assumed or otherwise entered into hereunder; or (B) make any loans or capital contributions to, or investments in, any other person; (ix) make any capital expenditures, other than in accordance with the Company’s capital expenditures plan as set forth on Section 5.01(a) of the Company Disclosure Schedule; (x) settle any (A) material claim or material litigation, in each case made or pending against the Company or any of its Subsidiaries, other than any payment, discharge, settlement or satisfaction where no non-monetary obligations are imposed on the Company or its Subsidiaries or would apply to Parent or its Subsidiaries and where the amounts paid or to be paid (i) are covered by insurance coverage maintained by the Company or (ii) in an amount less than one million dollars ($1,000,000), individually, and five million dollars ($5,000,000), in the aggregate or (B) any investigation by any Governmental Entity by agreeing to a material fine or penalty or non-monetary obligations; (xi) except as required pursuant to the terms of any Company Benefit Plan or other written agreement, in each case, in effect on the date of this Agreement, (1) grant to any officer, director or employee of the Company or any of its Subsidiaries any increase in compensation (other than increases in the ordinary course of business that are not material for employees who are not executive officers of the Company or any of its Subsidiaries), (2) grant to any officer, director or employee of the Company or any of its Subsidiaries any change in control, severance, retention or termination compensation or benefits, or any increase in change in control, retention, severance or termination compensation or benefits, (3) enter into any employment, consulting, severance, termination, retention or change in control agreement with any officer, director or employee of the Company or any of its Subsidiaries, (4) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or any plan, agreement or arrangement which, if in effect on the date of the Agreement, would constitute a Company Benefit Plan or (5) accelerate any rights or benefits, or make any material determinations, under any Company Benefit Plan; provided, however, that the foregoing clauses (1), (2), and (3) shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees or sales representatives or to employees or sales representatives in the context of promotions based on job performance or workplace requirements, in each case in the ordinary course of business, or pursuant to existing plans, agreements, benefits and compensation arrangements and incentive grants (excluding any plans, agreements, arrangements or grants pursuant to which compensation or benefits are payable based wholly or partially on the occurrence of a change in control) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees or sales representatives in similar positions; (xii) make any material change in accounting methods, principles or practices affecting the consolidated assets, liabilities or results of operations of the Company, other than as required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including Regulation S-X under the Securities Act; (xiii) except as consistent with past practice, make any material Tax election, file any amended Tax Return with respect to any material Tax, change any annual Tax accounting period, settle or compromise any material Tax audit, enter into any material closing agreement, surrender any right to claim a material refund of Taxes or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiaries; (xiv) except as required pursuant to this Agreement or the terms of the applicable agreement covering the indebtedness to be repaid to which the Company or any Subsidiary is a party as in effect as of the date hereof, pre-pay any long-term debt (which shall be deemed to include pre-payments or repayments of lines of credit facilities or other similar lines of credit or payments made in respect of any termination or settlement of any interest rate swap or other similar hedging instrument relating thereto other than currency or commodity swaps or hedging instruments entered into in the ordinary course of business as described in Section 5.01(a) of the Company Disclosure Schedule); (xv) amend, modify, cancel, terminate or waive or release any material right under any Company Material Contract or enter into any new contract, agreement or arrangement that, if entered into prior to the date of this Agreement, would be a Company Material Contract, where such action or omission would or would reasonably be expected, individually or in the aggregate, to (A) have a Material Adverse Effect, (B) impair in any material respect the ability of the Company or its Subsidiaries to perform its obligations under this Agreement, (C) prevent or materially impede, interfere with, hinder or delay the consummation of any of the transactions contemplated by this Agreement or (D) impair in any material respect the ability of the Company and its Subsidiaries to conduct their business as currently conducted; (xvi) create any subsidiary of the Company or otherwise alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiaries; (xvii) renew or enter into any noncompete or material exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries or, after the Share Acceptance Date, Parent or its Subsidiaries; (xviii) enter into any material transaction with any of its Affiliates (other than the Company and its Subsidiaries) other than pursuant to written arrangements in effect on the date of this Agreement and excluding any employment, compensation or similar arrangements otherwise permitted pursuant to this Section 5.01(a); (xix) transfer or make available to a third party any material research materials or material Intellectual Property, or transfer or make available to any third party any Pharmaceutical Product or product candidate owned by the Company or any Subsidiary of the Company or being studied in a Company or Subsidiary research program, except (A) as set forth in Section 5.01(a) of the Company Disclosure Schedule or (B) pursuant to any applicable written agreement in the ordinary course of business; (xx) take (or omit to take) any action that adversely affects in any material respect, or would reasonably be expected to adversely effect in any material respect, any material patent or patent application, or abandon or permit to lapse any right to any material patent or patent application, in each case, of the Company or any of its Subsidiaries; or (xxi) authorize any of, or commit or agree to take any of, the foregoing actions.
Appears in 2 contracts
Samples: Merger Agreement (King Pharmaceuticals Inc), Merger Agreement (Alpharma Inc)
Conduct of Business of the Company and its Subsidiaries. (a) Except as set forth in Section 5.01(a) of the Company Disclosure Schedule, contemplated by this Agreement, required by Law or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course and, to the extent consistent therewith, use reasonable best efforts to preserve substantially intact its current business organizations, to keep available the services of its current officers and employees and to preserve its relationships with significant customers, suppliers, licensors, licensees, distributors, lessors and others having significant business dealings with it. Without limiting the generality of the foregoing, except as set forth in Section 5.01(a) of the Company Disclosure Schedule, contemplated by this Agreement, required by Law (including, as applicable, Section 409A of the Code) or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to:
(i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock, other than dividends or distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent and other than as required pursuant to the Rights Agreement;
(ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in lieu of or in substitution for shares of its capital stock;
(iii) purchase, redeem or otherwise acquire any shares of its capital stock or any rights, warrants or options to acquire any such shares, other than (A) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of the Company Stock Options or as required pursuant to the terms of the ESPP, (B) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Incentive Plans and (C) the acquisition by the Company of Company Stock Options, Company Restricted Stock Units and shares of Company Restricted Stock in accordance with their terms in effect as of the date of this Agreement in connection with the forfeiture of such awards;
(iv) issue, deliver or sell any shares of its capital stock, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, other than (A) upon the exercise of Company Stock Options and rights under the ESPP outstanding on the date of this Agreement, in each case in accordance with their present terms, (B) upon the vesting of Company Restricted Stock Units outstanding on the date of this Agreement, in accordance with their present terms, (C) as required to comply with any Company Benefit Plan as in effect on the date of this Agreement, (D) upon the conversion of the Convertible Notes outstanding on the date of this Agreement, in accordance with their present terms and (E) the issuance of Rights and the issuance of Company Common Stock or Preferred Stock of the Company upon the exercise of Rights, in each case, pursuant to the terms and conditions of the Rights Agreement;
(v) amend the Company Certificate of Incorporation or the Company Bylaws or the comparable organizational documents of any Subsidiary of the Company;
(vi) merge or consolidate with, or purchase an equity interest in or a substantial portion of the assets of, any person or any division or business thereof other than purchases of assets where the amount of the consideration paid or transferred by the Company and its Subsidiaries in connection with all such transactions does not exceed one million dollars ($1,000,000) in the aggregate;
(vii) assign, sublease, terminate, waive any material rights under, or materially amend any Lease, or sell, lease or otherwise dispose of any of its properties or assets with an aggregate value in excess of one million dollars ($1,000,000), other than sales of inventory and other assets (other than Owned Real Property or Leased Real Property) in the ordinary course of business;
(viii) (A) incur any indebtedness for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any such indebtedness or any debt securities of another person or enter into any “keep well” or other agreement to maintain any financial statement condition of another person (collectively, “Indebtedness”), other than (1) Indebtedness incurred, assumed or otherwise entered into in the ordinary course of business (including any borrowings under the Company’s existing credit facilities and in respect of letters of credit) for additional amounts after the date hereof not in excess of five million dollars ($5,000,000) in the aggregate and (2) Indebtedness incurred in connection with the refinancing of any Indebtedness existing on the date of this Agreement or permitted to be incurred, assumed or otherwise entered into hereunder; or (B) make any loans or capital contributions to, or investments in, any other person;
(ix) make any capital expenditures, other than in accordance with the Company’s capital expenditures plan as set forth on Section 5.01(a) of the Company Disclosure Schedule;
(x) settle any (A) material claim or material litigation, in each case made or pending against the Company or any of its Subsidiaries, other than any payment, discharge, settlement or satisfaction where no non-monetary obligations are imposed on the Company or its Subsidiaries or would apply to Parent or its Subsidiaries and where the amounts paid or to be paid (i) are covered by insurance coverage maintained by the Company or (ii) in an amount less than one million dollars ($1,000,000), individually, and five million dollars ($5,000,000), in the aggregate or (B) any investigation by any Governmental Entity by agreeing to a material fine or penalty or non-monetary obligations;
(xi) except as required pursuant to the terms of any Company Benefit Plan or other written agreement, in each case, in effect on the date of this Agreement, (1) grant to any officer, director or employee of the Company or any of its Subsidiaries any increase in compensation (other than increases in the ordinary course of business that are not material for employees who are not executive officers of the Company or any of its Subsidiaries), (2) grant to any officer, director or employee of the Company or any of its Subsidiaries any change in control, severance, retention or termination compensation or benefits, or any increase in change in control, retention, severance or termination compensation or benefits, (3) enter into any employment, consulting, severance, termination, retention or change in control agreement with any officer, director or employee of the Company or any of its Subsidiaries, (4) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or any plan, agreement or arrangement which, if in effect on the date of the Agreement, would constitute a Company Benefit Plan or (5) accelerate any rights or benefits, or make any material determinations, under any Company Benefit Plan; provided, however, that the foregoing clauses (1), (2), and (3) shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees or sales representatives or to employees or sales representatives in the context of promotions based on job performance or workplace requirements, in each case in the ordinary course of business, or pursuant to existing plans, agreements, benefits and compensation arrangements and incentive grants (excluding any plans, agreements, arrangements or grants pursuant to which compensation or benefits are payable based wholly or partially on the occurrence of a change in control) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees or sales representatives in similar positions;
(xii) make any material change in accounting methods, principles or practices affecting the consolidated assets, liabilities or results of operations of the Company, other than as required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including Regulation S-X under the Securities Act;
(xiii) except as consistent with past practice, make any material Tax election, file any amended Tax Return with respect to any material Tax, change any annual Tax accounting period, settle or compromise any material Tax audit, enter into any material closing agreement, surrender any right to claim a material refund of Taxes or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiaries;
(xiv) except as required pursuant to this Agreement or the terms of the applicable agreement covering the indebtedness to be repaid to which the Company or any Subsidiary is a party as in effect as of the date hereof, pre-pay any long-term debt (which shall be deemed to include pre-payments or repayments of lines of credit facilities or other similar lines of credit or payments made in respect of any termination or settlement of any interest rate swap or other similar hedging instrument relating thereto other than currency or commodity swaps or hedging instruments entered into in the ordinary course of business as described in Section 5.01(a) of the Company Disclosure Schedule);
(xv) amend, modify, cancel, terminate or waive or release any material right under any Company Material Contract or enter into any new contract, agreement or arrangement that, if entered into prior to the date of this Agreement, would be a Company Material Contract, where such action or omission would or would reasonably be expected, individually or in the aggregate, to (A) have a Material Adverse Effect, (B) impair in any material respect the ability of the Company or its Subsidiaries to perform its obligations under this Agreement, (C) prevent or materially impede, interfere with, hinder or delay the consummation of any of the transactions contemplated by this Agreement or (D) impair in any material respect the ability of the Company and its Subsidiaries to conduct their business as currently conducted;
(xvi) create any subsidiary of the Company or otherwise alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiaries;
(xvii) renew or enter into any noncompete or material exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries or, after the Share Acceptance Date, Parent or its Subsidiaries;
(xviii) enter into any material transaction with any of its Affiliates (other than the Company and its Subsidiaries) other than pursuant to written arrangements in effect on the date of this Agreement and excluding any employment, compensation or similar arrangements otherwise permitted pursuant to this Section 5.01(a);
(xix) transfer or make available to a third party any material research materials or material Intellectual Property, or transfer or make available to any third party any Pharmaceutical Product or product candidate owned by the Company or any Subsidiary of the Company or being studied in a Company or Subsidiary research program, except (A) as set forth in Section 5.01(a) of the Company Disclosure Schedule or (B) pursuant to any applicable written agreement in the ordinary course of business;
(xx) take (or omit to take) any action that adversely affects in any material respect, or would reasonably be expected to adversely effect in any material respect, any material patent or patent application, or abandon or permit to lapse any right to any material patent or patent application, in each case, of the Company or any of its Subsidiaries; or
(xxi) authorize any of, or commit or agree to take any of, the foregoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Stryker Corp), Merger Agreement (Orthovita Inc)
Conduct of Business of the Company and its Subsidiaries. (a) Except as set forth in Section 5.01(a) of the Company Disclosure Schedule, expressly contemplated by this Agreement, required by Law or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date hereof until such time as Purchaser's designees shall constitute a majority of this Agreement to the Effective TimeBoard, the Company shall, and the Company shall cause each of its Subsidiaries to, carry on :
(i) conduct its business only in the ordinary course andconsistent with past practice in all material respects; (ii) use commercially reasonable efforts to preserve, to maintain, and protect its assets and the extent consistent therewith, business of the Company and each of its Subsidiaries; (iii) use commercially reasonable best efforts to preserve substantially intact the business organization of the business of the Company and each of its current business organizationsSubsidiaries, to keep available the services of the employees of its current officers and employees business, and to preserve its maintain existing relationships with significant customers, suppliers, licensors, licensees, suppliers, contractors, distributors, lessors customers, and others having significant business dealings relationships with it. its business; and (iv) comply in all material respects with all applicable laws, including all applicable federal and state securities laws, rules and regulations and including, without limitation, the timely filing of all periodic reports with the SEC required to be filed pursuant to the Exchange Act.
(b) Without limiting the generality of the foregoing, and except as set forth otherwise expressly provided in Section 5.01(a) of the Company Disclosure Schedule, contemplated by this Agreement, required prior to the time Persons designated or elected by Law (including, as applicable, Section 409A Purchaser or any of its affiliates shall constitute a majority of the Code) or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective TimeBoard, the Company shall Board will not, and shall not without the prior written consent of Purchaser, permit the Company or any of its Subsidiaries to:
(i) declare, set aside amend or pay any dividends on, propose to amend its certificate of incorporation or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock, other than dividends or distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent and other than as required pursuant to the Rights Agreementby-laws;
(ii) splitauthorize for issuance, combine issue, sell, deliver, or reclassify agree or commit to issue, sell or deliver, dispose of, encumber or pledge any of its capital stock or issue or authorize the issuance of any other securities in lieu of or in substitution for shares of its capital stock;
(iii) class, options, warrants, commitments, subscriptions, rights to purchase, redeem or otherwise acquire any shares of its capital stock or any appreciation rights, warrants restricted stock, performance units, stock equivalents or options to acquire any such sharesother securities, other than (A) the acquisition except as required by the Company of shares of Company Common Stock in connection agreements with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price employees of the Company Stock Options or as required pursuant to the terms of the ESPPits Subsidiaries or under benefit plans, (B) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Incentive Plans and (C) the acquisition by the Company of Company Stock Options, Company Restricted Stock Units and shares of Company Restricted Stock in accordance with their terms either case in effect as of the date of this Agreement and disclosed in connection with Section 4.2 of the forfeiture Schedule, or amend any of the terms of any such awardssecurities or agreements outstanding, or benefit plans in effect, as of the date of this Agreement;
(iviii) issuesplit, deliver combine or sell reclassify any shares of its capital stock, declare, set aside or pay any dividend or other voting distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, or redeem or otherwise acquire any of its securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, other than (A) upon the exercise of Company Stock Options and rights under the ESPP outstanding on the date of this Agreement, in each case in accordance with their present terms, (B) upon the vesting of Company Restricted Stock Units outstanding on the date of this Agreement, in accordance with their present terms, (C) as required to comply with any Company Benefit Plan as in effect on the date of this Agreement, (D) upon the conversion of the Convertible Notes outstanding on the date of this Agreement, in accordance with their present terms and (E) the issuance of Rights and the issuance of Company Common Stock or Preferred Stock of the Company upon the exercise of Rights, in each case, pursuant to the terms and conditions of the Rights Agreementits Subsidiaries;
(v) amend the Company Certificate of Incorporation or the Company Bylaws or the comparable organizational documents of any Subsidiary of the Company;
(vi) merge or consolidate with, or purchase an equity interest in or a substantial portion of the assets of, any person or any division or business thereof other than purchases of assets where the amount of the consideration paid or transferred by the Company and its Subsidiaries in connection with all such transactions does not exceed one million dollars ($1,000,000) in the aggregate;
(vii) assign, sublease, terminate, waive any material rights under, or materially amend any Lease, or sell, lease or otherwise dispose of any of its properties or assets with an aggregate value in excess of one million dollars ($1,000,000), other than sales of inventory and other assets (other than Owned Real Property or Leased Real Property) in the ordinary course of business;
(viiiiv) (A) incur or assume any indebtedness for borrowed money, long-term or short-term Indebtedness or issue or sell any debt securities or warrants or other rights to acquire any debt securities except for borrowings under existing lines of the Company or any of its Subsidiaries, guarantee any such indebtedness or any debt securities of another person or enter into any “keep well” or other agreement to maintain any financial statement condition of another person (collectively, “Indebtedness”), other than (1) Indebtedness incurred, assumed or otherwise entered into credit in the ordinary course of business (including B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any borrowings under other Person except in the ordinary course of business; consistent with past practice, and except for obligations of wholly owned Subsidiaries of the Company to the Company or to other wholly owned Subsidiaries of the Company’s existing credit facilities and in respect of letters of credit) for additional amounts after the date hereof not in excess of five million dollars ; ($5,000,000) in the aggregate and (2) Indebtedness incurred in connection with the refinancing of any Indebtedness existing on the date of this Agreement or permitted to be incurred, assumed or otherwise entered into hereunder; or (BC) make any loans loans, advances or capital contributions to, or investments in, any other person;
Person (ix) make any capital expenditures, other than in accordance with the Company’s capital expenditures plan as set forth on Section 5.01(a) of the Company Disclosure Schedule;
(x) settle any (A) material claim or material litigation, in each case made or pending against the Company or any of its Subsidiaries, other than any payment, discharge, settlement or satisfaction where no non-monetary obligations are imposed on the Company or its to wholly owned Subsidiaries or would apply to Parent or its Subsidiaries and where the amounts paid or to be paid (i) are covered by insurance coverage maintained by the Company or (ii) in an amount less than one million dollars ($1,000,000), individually, and five million dollars ($5,000,000), in the aggregate or (B) any investigation by any Governmental Entity by agreeing to a material fine or penalty or non-monetary obligations;
(xi) except as required pursuant to the terms of any Company Benefit Plan or other written agreement, in each case, in effect on the date of this Agreement, (1) grant to any officer, director or employee of the Company or any of its Subsidiaries any increase in compensation (other than increases customary loans or advances to employees in the ordinary course of business that are consistent with past practice and in amounts not material to the maker of such loan or advance) or make any change in its existing borrowing or lending arrangements for employees who are not executive officers or on behalf of any such Person, whether pursuant to an employee benefit plan or otherwise; (D) pledge or otherwise encumber shares of capital stock of the Company or any of its Subsidiaries), ; or (2E) grant to any officer, director mortgage or employee of the Company or pledge any of its Subsidiaries any change in controlmaterial assets, severance, retention tangible or termination compensation or benefitsintangible, or any increase in change in control, retention, severance create or termination compensation or benefits, (3) enter into any employment, consulting, severance, termination, retention or change in control agreement with any officer, director or employee of the Company or any of its Subsidiaries, (4) establish, adopt, enter into or amend in suffer to exist any material respect any collective bargaining agreement or any planLien thereupon, agreement or arrangement which, if in effect on the date of the Agreement, would constitute a Company Benefit Plan or (5) accelerate any rights or benefits, or make any material determinations, under any Company Benefit Plan; provided, however, that the foregoing clauses (1), (2), and (3) shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees or sales representatives or to employees or sales representatives in the context of promotions based on job performance or workplace requirements, in each case in the ordinary course of business, or pursuant to existing plans, agreements, benefits and compensation arrangements and incentive grants (excluding any plans, agreements, arrangements or grants pursuant to which compensation or benefits are payable based wholly or partially on the occurrence of a change in control) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees or sales representatives in similar positionsother than Permitted Liens;
(xiiv) make any material change in accounting methodsadopt a plan of complete or partial liquidation or adopt resolutions providing for the complete or partial liquidation, principles dissolution, consolidation, merger, restructuring or practices affecting the consolidated assets, liabilities or results recapitalization of operations of the Company, other than as required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including Regulation S-X under the Securities Act;
(xiii) except as consistent with past practice, make any material Tax election, file any amended Tax Return with respect to any material Tax, change any annual Tax accounting period, settle or compromise any material Tax audit, enter into any material closing agreement, surrender any right to claim a material refund of Taxes or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiaries;
(xivvi) (A) except as may be required by law, as contemplated by this Agreement, or as required under a Company Plan or an agreement in effect on the date hereof, enter into, adopt or pay, agree to pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to, or amend or terminate any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, pension, retirement, deferred compensation, employment, severance, welfare, insurance or other employee benefit agreement, trust, plan, fund or other arrangement for the benefit or welfare of any director, officer or employee in any manner; or (B) except for normal increases in the ordinary course of business consistent with past practice that, in the aggregate, do not result in a material increase in benefits or compensation expense to this Agreement or the terms of the applicable agreement covering the indebtedness to be repaid to which the Company or its Subsidiaries, and as required under existing agreements or in the ordinary course of business consistent with past practice, increase in any Subsidiary is a party manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any plan and arrangement as in effect as of the date hereofhereof (including, pre-pay any long-term debt without limitation, the granting of stock appreciation rights or performance units);
(which shall be deemed to include pre-payments vii) acquire, sell, transfer, lease, encumber or repayments of lines of credit facilities or other similar lines of credit or payments made in respect dispose of any termination or settlement of any interest rate swap or other similar hedging instrument relating thereto assets other than currency or commodity swaps or hedging instruments entered into in the ordinary course of business or enter into any commitment or transaction other than in the ordinary course of business consistent with past practice which would be material to the Company and its Subsidiaries, taken as described a whole;
(viii) except as may be required as a result of a change in Section 5.01(alaw or in GAAP, change any of the accounting principles or practices used by it;
(ix) revalue in any material respect any of its assets, including, without limitation, writing down the value of inventory or writing-off notes or accounts receivable other than in the ordinary course of business;
(A) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or any equity interest therein; (B) enter into any contract or agreement other than in the ordinary course of business consistent with past practice which would be material to the Company and its Subsidiaries, taken as a whole; (C) authorize any new capital expenditure or expenditures which, individually, is in excess of $25,000 or, in the aggregate, are in excess of $100,000; or (D) enter into or amend any contract, agreement, commitment or arrangement (including any Material Contract) providing for the taking of any action that would be prohibited hereunder;
(xi) make any tax election (unless required by law) or settle or compromise any income tax liability of the Company or any of its Subsidiaries, except if such action is taken in the ordinary course of business, and, in any event, the Company shall consult with Purchaser before executing or causing to be executed any agreement or waiver extending the period for assessment or collection of any taxes of the Company or its Subsidiaries;
(xii) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company Disclosure Schedule)and its Subsidiaries or incurred in the ordinary course of business consistent with past practice;
(xiii) permit any insurance policy naming the Company or any of its Subsidiaries as a beneficiary or a loss payable payee to be canceled or terminated without notice to Purchaser except in the ordinary course of business and consistent with past practice unless the Company or such Subsidiary shall have obtained a comparable replacement policy;
(xiv) settle or compromise any pending or threatened suit, action or claim relating to the Transactions;
(xv) amend, modify, cancel, terminate or waive or release any material right under any Company Material Contract or enter into any new contract, agreement or arrangement that, if entered into prior to the date of this Agreement, would be a Company Material Contract, where such action or omission would or would reasonably be expected, individually or in the aggregate, to (A) have a Material Adverse Effect, (B) impair change in any material respect any existing Material Contract relating to the ability business of the Company or its Subsidiaries to perform its obligations under this AgreementSubsidiaries, (C) prevent or materially impede, interfere with, hinder or delay other than in the consummation ordinary course of any of the transactions contemplated by this Agreement or (D) impair in any material respect the ability of the Company and its Subsidiaries to conduct their business as currently conductedconsistent with past practice;
(xvi) create waive, release, grant, or transfer any subsidiary rights of material value relating to the business of the Company or otherwise alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiaries;
(xvii) renew or enter into any noncompete or material exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries or, after the Share Acceptance Date, Parent or its Subsidiaries;
(xviii) enter into any material transaction with any of its Affiliates (, other than the Company and its Subsidiaries) other than pursuant to written arrangements in effect on the date of this Agreement and excluding any employment, compensation or similar arrangements otherwise permitted pursuant to this Section 5.01(a);
(xix) transfer or make available to a third party any material research materials or material Intellectual Property, or transfer or make available to any third party any Pharmaceutical Product or product candidate owned by the Company or any Subsidiary of the Company or being studied in a Company or Subsidiary research program, except (A) as set forth in Section 5.01(a) of the Company Disclosure Schedule or (B) pursuant to any applicable written agreement in the ordinary course of business;
(xx) take (or omit to take) any action that adversely affects in any material respect, or would reasonably be expected to adversely effect in any material respect, any material patent or patent application, or abandon or permit to lapse any right to any material patent or patent application, in each case, of the Company or any of its Subsidiariesbusiness consistent with past practice; or
(xxixvii) authorize any oftake, or commit agree in writing or agree otherwise to take take, any ofof the actions described in SECTIONS 6.1(b)(i) through 6.1(b)(xvi) or any action which would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect as of the date when made or would result in any of the Offer Conditions set forth in ANNEX A not being satisfied.
(c) Until Purchaser's designees constitute a majority of the Board, the foregoing actionsCompany will deliver to Purchaser accurate and complete copies of all documents filed with the SEC or any exchange on which the Shares are listed for trading.
Appears in 2 contracts
Samples: Merger Agreement (Sunshine Acquisition Inc), Merger Agreement (Serengeti Eyewear Inc)
Conduct of Business of the Company and its Subsidiaries. Unless Purchaser shall otherwise agree in writing (awhich consent shall not be unreasonably withheld, delayed or conditioned) Except and except as set forth expressly provided in Section 5.01(a) of this Agreement or in the Company Disclosure Schedule, contemplated by this Agreement, required by Law or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed)Letter, during the period from the date of this Agreement to the Effective TimeClosing, (i) the Company shall conduct, and it shall cause its subsidiaries to conduct, its or their businesses in the ordinary course and consistent with past practice, and the Company shall, and it shall cause each of its Subsidiaries subsidiaries to, carry on use its business in the ordinary course and, to the extent consistent therewith, use or their reasonable best commercial efforts to preserve substantially intact its current business organizationsorganization, to keep available the services of its current or their officers and employees and to preserve its maintain satisfactory relationships with significant customersall persons with whom it does, suppliersor they do, licensorsbusiness, licensees(ii) the Company shall timely file all reports, distributorsforms or other documents with the SEC required pursuant to the Securities Act or the Securities Exchange Act, lessors (iii) the Company shall enforce any and others having significant business dealings all confidentiality and standstill agreements entered into with it. Without persons other than Purchaser, and (iv) without limiting the generality of the foregoing, except as set forth in Section 5.01(a) of the Company Disclosure Schedule, contemplated by this Agreement, required by Law (including, as applicable, Section 409A of the Code) or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective Time, the Company shall not, and the Company shall cause each Company subsidiary not permit any of its Subsidiaries to:
(iA) amend or propose to amend its Memorandum and Articles of Association or by-laws (or comparable governing instruments);
(B) authorize for issuance, issue, grant, sell, repurchase, acquire, pledge, dispose of, encumber or propose to issue, grant, sell, repurchase, acquire, pledge, dispose of or encumber any shares of, or any subscriptions, warrants, puts, calls, unsatisfied preemptive rights, options or rights of any kind to acquire or sell any shares of, the capital stock or other equity securities of the Company or any of the its subsidiaries including, but not limited to, any securities convertible into or exchangeable for shares of stock of any class of the Company or any of its subsidiaries, except for the issuance of shares pursuant to the exercise of Company Options outstanding as of the date hereof;
(C) split, combine or reclassify any shares of its capital stock or declare, pay or set aside any dividend or pay any dividends on, or make any other distributions distribution (whether in cash, stock or propertyproperty or any combination thereof) in respect of, any of its capital stock, other than dividends or distributions by to the Company or a direct or indirect wholly owned Subsidiary subsidiary of the Company to its parent and other than as required pursuant to the Rights Agreement;
(ii) splitCompany, combine or reclassify any of its capital stock directly or issue or authorize the issuance of any other securities in lieu of or in substitution for shares of its capital stock;
(iii) purchaseindirectly redeem, redeem purchase or otherwise acquire or offer to acquire any shares of its capital stock or other equity securities; provided, however, that the Company shall not declare, pay or set aside any rights, warrants dividend or options other distribution in respect of its capital stock to acquire any such shares, U.S. subsidiary;
(D) other than (A) the acquisition by pursuant to agreements or arrangements between the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price and any subsidiary of the Company Stock Options or as required pursuant to the terms agreements or arrangements between subsidiaries of the ESPP, (B) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Incentive Plans and (C) the acquisition by the Company of Company Stock Options, Company Restricted Stock Units and shares of Company Restricted Stock in accordance with their terms in effect as of the date of this Agreement in connection with the forfeiture of such awards;
(iv) issue, deliver or sell any shares of its capital stock, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, other than (A) upon the exercise of Company Stock Options and rights under the ESPP outstanding on the date of this Agreement, in each case in accordance with their present terms, (B) upon the vesting of Company Restricted Stock Units outstanding on the date of this Agreement, in accordance with their present terms, (C) as required to comply with any Company Benefit Plan as in effect on the date of this Agreement, (D) upon the conversion of the Convertible Notes outstanding on the date of this Agreement, in accordance with their present terms and (E) the issuance of Rights and the issuance of Company Common Stock or Preferred Stock of the Company upon the exercise of RightsCompany, in each case, pursuant to the terms and conditions of the Rights Agreement;
(v) amend the Company Certificate of Incorporation or the Company Bylaws or the comparable organizational documents of any Subsidiary of the Company;
(vi) merge or consolidate with, or purchase an equity interest in or a substantial portion of the assets of, any person or any division or business thereof other than purchases of assets where the amount of the consideration paid or transferred by the Company and its Subsidiaries in connection with all such transactions does not exceed one million dollars ($1,000,000) in the aggregate;
(vii) assign, sublease, terminate, waive any material rights under, or materially amend any Lease, or sell, lease or otherwise dispose of any of its properties or assets with an aggregate value in excess of one million dollars ($1,000,000), other than sales of inventory and other assets (other than Owned Real Property or Leased Real Property) in the ordinary course of business;
(viii) (A) incur any indebtedness for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any such indebtedness or any debt securities of another person or enter into any “keep well” or other agreement to maintain any financial statement condition of another person (collectively, “Indebtedness”), other than (1) Indebtedness incurred, assumed or otherwise entered into in the ordinary course of business consistent with past practice (including a) create, incur or assume any debt for borrowed money, except (i) refinancings of existing obligations on terms that are no less favorable to the Company or its subsidiaries than the existing terms, (ii) for borrowings under the Company’s existing credit facilities in the ordinary course of business consistent with past practice and in respect of letters of credit(iii) for additional amounts after the date hereof not in excess of five million dollars ($5,000,000) accounts payable in the aggregate and (2) Indebtedness incurred in connection with the refinancing of any Indebtedness existing on the date of this Agreement or permitted to be incurred, assumed or otherwise entered into hereunderordinary course; or (Bb) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, indirectly, contingently or otherwise) for the obligations of any person;
(E) except as set forth in Section 4.1(E) of the Company Disclosure Letter, make any loans capital expenditures or make any loans, advances or capital contributions to, or investments in, any other person in excess of $100,000 individually or $500,000 in the aggregate (other than to a non-U.S. subsidiary); provided, however, the Company shall not make any loans, advances on capital contribution to, or investments in, any U.S. subsidiary;
(F) acquire by way of merger, investment, consolidation or otherwise, an operating business (or control of such business) of any other person;
(ixG) other than in the ordinary course of business consistent with past practice, including, without limitation, pursuant to agreements or arrangements between the Company and any subsidiary of the Company or agreements or arrangements between subsidiaries of the Company, voluntarily incur any material liability or material obligation (absolute, accrued, contingent or otherwise);
(H) other than pursuant to agreements or arrangements between the Company and any subsidiary of the Company or agreements or arrangements between subsidiaries of the Company, in each case, in the ordinary course of business consistent with past practice, sell, transfer, dispose of, voluntarily create, or take any action that would result in the creation of, a Lien on, or otherwise voluntarily encumber, or take any action that would result in an encumbrance of, or agree to sell, transfer, dispose of, create a Lien on, or otherwise encumber any assets or properties, real, personal or mixed other than (x) to secure debt permitted under subclause (a) of clause (D), (y) sales of inventory or other assets or properties in the ordinary course of business consistent with past practice or (x) Liens or other encumbrances that are not material to the Company and its subsidiaries taken as a whole;
(I) make any capital expenditureschange to the Company Benefit Plans or agree to increase or increase in any manner or accelerate the payment, right to payment or vesting of the compensation (including bonuses, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other than in accordance with the Company’s capital expenditures plan as set forth on Section 5.01(acompensation or benefits) of any directors or officers of the Company Disclosure Schedule;
(x) settle or enter into, establish, amend or terminate any (A) material claim employment, consulting, retention, change in control, collective bargaining, bonus or material litigationother incentive compensation, profit sharing, health or other welfare, stock option or other equity, pension, retirement, vacation, severance, deferred compensation or other compensation or benefit plan, policy, agreement, trust, fund or arrangement with, for or in each case made or pending against the Company or respect of, any of its Subsidiariesstockholder, officer, director, other employee, agent, consultant or affiliate other than any payment, discharge, settlement or satisfaction where no non-monetary obligations are imposed on the Company or its Subsidiaries or would apply to Parent or its Subsidiaries and where the amounts paid or to be paid (i) are covered by insurance coverage maintained by the Company or (ii) in an amount less than one million dollars ($1,000,000), individually, and five million dollars ($5,000,000), in the aggregate or (B) any investigation by any Governmental Entity by agreeing to a material fine or penalty or non-monetary obligations;
(xi) except as required by law or pursuant to the terms of any Company Benefit Plan or other written agreement, in each case, agreements in effect on the date of this Agreement, ; provided that nothing in this paragraph (1I) grant to shall prohibit any officer, director or employee of annual increase in compensation granted by the Company or any of its Subsidiaries any increase in compensation (other than increases subsidiary thereof in the ordinary course of business that are not material for employees who are not executive officers of the Company consistent with past practice
(J) enter into, amend or any of its Subsidiaries), (2) grant to any officer, director or employee of the Company or any of its Subsidiaries any change in control, severance, retention or termination compensation or benefitsvoluntarily terminate, or take any increase action that would result in change in controlthe termination of, retentionany Company Material Contract, severance or termination compensation waive, release or benefitsassign any material rights or material claims, including, without limitation, any confidentiality or standstill agreements with persons other than Purchaser;
(3K) enter into any employment, consulting, severance, termination, retention compromise or change in control agreement with any officer, director or employee of the Company or any of its Subsidiaries, (4) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or any plan, agreement or arrangement which, if in effect on the date of the Agreement, would constitute a Company Benefit Plan or (5) accelerate any rights or benefitssettlement of, or make take any other material determinationsaction with respect to, under any Company Benefit Plan; providedlitigation, howeveraction, that the foregoing clauses (1)suit, (2)claim, and (3) shall not restrict the Company proceeding or any of its Subsidiaries from entering into or making available to newly hired employees or sales representatives or to employees or sales representatives in the context of promotions based on job performance or workplace requirements, in each case in the ordinary course of business, or pursuant to existing plans, agreements, benefits and compensation arrangements and incentive grants (excluding any plans, agreements, arrangements or grants pursuant to which compensation or benefits are payable based wholly or partially on the occurrence of a change in control) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees or sales representatives in similar positions;
(xii) make any material change in accounting methods, principles or practices affecting the consolidated assets, liabilities or results of operations of the Companyinvestigation, other than as required (A) by GAAP (or any interpretation thereof)the prosecution, including pursuant to standards, guidelines defense and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including Regulation S-X under the Securities Act;
(xiii) except as consistent with past practice, make any material Tax election, file any amended Tax Return with respect to any material Tax, change any annual Tax accounting period, settle or compromise any material Tax audit, enter into any material closing agreement, surrender any right to claim a material refund of Taxes or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiaries;
(xiv) except as required pursuant to this Agreement or the terms of the applicable agreement covering the indebtedness to be repaid to which the Company or any Subsidiary is a party as in effect as of the date hereof, pre-pay any long-term debt (which shall be deemed to include pre-payments or repayments of lines of credit facilities or other similar lines of credit or payments made in respect of any termination or settlement of any interest rate swap routine litigation, actions, suits, claims, proceedings or other similar hedging instrument relating thereto other than currency or commodity swaps or hedging instruments entered into in the ordinary course of business as described in Section 5.01(a) of the Company Disclosure Schedule);
(xv) amend, modify, cancel, terminate or waive or release any material right under any Company Material Contract or enter into any new contract, agreement or arrangement that, if entered into prior to the date of this Agreement, would be a Company Material Contract, where such action or omission would or would reasonably be expected, individually or in the aggregate, to (A) have a Material Adverse Effect, (B) impair in any material respect the ability of the Company or its Subsidiaries to perform its obligations under this Agreement, (C) prevent or materially impede, interfere with, hinder or delay the consummation of any of the transactions contemplated by this Agreement or (D) impair in any material respect the ability of the Company and its Subsidiaries to conduct their business as currently conducted;
(xvi) create any subsidiary of the Company or otherwise alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiaries;
(xvii) renew or enter into any noncompete or material exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries or, after the Share Acceptance Date, Parent or its Subsidiaries;
(xviii) enter into any material transaction with any of its Affiliates (other than the Company and its Subsidiaries) other than pursuant to written arrangements in effect on the date of this Agreement and excluding any employment, compensation or similar arrangements otherwise permitted pursuant to this Section 5.01(a);
(xix) transfer or make available to a third party any material research materials or material Intellectual Property, or transfer or make available to any third party any Pharmaceutical Product or product candidate owned by the Company or any Subsidiary of the Company or being studied in a Company or Subsidiary research program, except (A) as set forth in Section 5.01(a) of the Company Disclosure Schedule or (B) pursuant to any applicable written agreement investigations in the ordinary course of business;
(xxL) take adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization;
(M) except to the extent permitted under clause (N) below, change any method of reporting income, deductions or omit other items for income or franchise tax purposes, make or change any material election with respect to takeTaxes, agree to an extension or waiver of the limitation period to any claim or assessment in respect of Taxes, or make or rescind any Tax election or settle or compromise any material claim or material assessment in respect of Taxes;
(N) make any action that adversely affects change in any material respectmethod of accounting or accounting practice or policy, except as required by any changes in applicable generally accepted accounting principles;
(O) enter into any agreement, understanding or would reasonably be expected commitment that restrains, limits or impedes the Company’s or any of its subsidiaries’ ability to adversely compete with or conduct any business or line of business;
(P) plan, announce, implement or effect any reduction in force program, lay-off program, early retirement program, severance program or other program concerning the termination of employment of employees of the Company or any material respect, subsidiary;
(Q) other than pursuant to agreements or arrangements between the Company and any material patent subsidiary of the Company or patent application, agreements or abandon or permit to lapse any right to any material patent or patent applicationarrangements between subsidiaries of the Company, in each case, in the ordinary course of the Company or business consistent with past practice, enter into any of its SubsidiariesAffiliate Transactions; or
(xxiR) authorize any of, or commit or agree to take any of, the foregoing actionsactions in respect of which it is restricted by the provisions of this Section 4.1.
Appears in 2 contracts
Samples: Acquisition Agreement (Parker Hannifin Corp), Acquisition Agreement (Parker Hannifin Corp)
Conduct of Business of the Company and its Subsidiaries. (a) Except as set forth in Section 5.01(a) of the Company Disclosure Schedule, contemplated by this Agreement, required by Law or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during During the period from the date of this Agreement to the Effective TimeClosing Date, the Company shall, and shall cause each of its Subsidiaries towill conduct its operations only in, carry on its business in and not take any action except in, the ordinary and usual course andof business and consistent with past practice, to and the extent consistent therewith, Company and each of its Subsidiaries will use reasonable its best efforts to preserve substantially intact its current business organizationsorganization, to keep available the services of its current officers and employees and to preserve its maintain advantageous relationships with significant customers, supplierscreditors, licensors, licensees, distributorssuppliers, lessors contractors, business partners and others having significant business dealings relationships with itthe Company or any of its Subsidiaries. Without limiting the generality of the foregoing, except as set forth in Section 5.01(a) of prior to the Closing Date neither the Company Disclosure Schedule, contemplated by this Agreement, required by Law (including, as applicable, Section 409A of the Code) or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit nor any of its Subsidiaries towill, without the prior written consent of Parent, which may be withheld in its sole discretion:
(i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock, other than dividends or distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent and other than as required pursuant to the Rights Agreement;
(iia) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in lieu of or in substitution for shares of its capital stock;
(iii) ; declare, pay or set aside for payment any dividend or other distribution payable in cash, stock, property or otherwise in respect of its capital stock; or directly or indirectly redeem, purchase, redeem repurchase or otherwise acquire any shares of its capital stock or any rights, warrants securities or options to acquire any such shares, other than (A) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of the Company Stock Options obligations convertible into or as required pursuant to the terms of the ESPP, (B) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Incentive Plans and (C) the acquisition by the Company of Company Stock Options, Company Restricted Stock Units and shares of Company Restricted Stock in accordance with their terms in effect as of the date of this Agreement in connection with the forfeiture of such awards;
(iv) issue, deliver or sell exchangeable for any shares of its capital stock;
(b) authorize for issuance, issue, sell, pledge, dispose of or encumber, deliver or agree or commit to issue, sell, pledge or deliver (whether through the issuance or granting of any other voting securities options, warrants, commitments, subscriptions, rights to purchase or otherwise) any of its capital stock or any securities convertible into, into or any rights, warrants exercisable or options to acquire, any such shares, voting securities or convertible securities, or any “phantom” exchangeable for shares of its capital stock, “phantom” stock rights, stock appreciation rights or stock based performance units, other than (A) upon the exercise of Company Stock Options and rights under the ESPP outstanding on the date of this Agreement, in each case in accordance with their present terms, (B) upon the vesting of Company Restricted Stock Units outstanding on the date of this Agreement, in accordance with their present terms, (C) as required to comply with any Company Benefit Plan as in effect on the date of this Agreement, (D) upon the conversion of the Convertible Notes outstanding on the date of this Agreement, in accordance with their present terms and (E) the issuance of Rights and the issuance of Company Common Stock or Preferred Stock of the Company upon the exercise of Rights, in each case, pursuant to the terms and conditions of the Rights Agreement;
(v) amend the Company Certificate of Incorporation or the Company Bylaws or the comparable organizational documents of any Subsidiary of the Company;
(vi) merge or consolidate with, or purchase an equity interest in or a substantial portion of the assets of, any person or any division or business thereof other than purchases of assets where the amount of the consideration paid or transferred by the Company and its Subsidiaries in connection with all such transactions does not exceed one million dollars ($1,000,000) in the aggregate;
(vii) assign, sublease, terminate, waive any material rights under, or materially amend any Lease, or sell, lease or otherwise dispose of any of its properties or assets with an aggregate value in excess of one million dollars ($1,000,000), other than sales of inventory and other assets (other than Owned Real Property or Leased Real Property) in the ordinary course of business;
(viiic) (Ai) incur or assume any indebtedness for borrowed money, debt or issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any such indebtedness or any debt securities of another person or enter into any “keep well” or other agreement to maintain any financial statement condition of another person (collectively, “Indebtedness”), other than (1) Indebtedness incurred, assumed or otherwise entered into in the ordinary course of business (including any except for borrowings under the Company’s existing lines of credit facilities and in respect of letters of credit) for additional amounts after the date hereof that are not in excess of five million dollars with Affiliates ($5,000,000) not to exceed in the aggregate $100,000) and the incurrence of trade payables or other purchase commitments (2in either case, not to exceed in the aggregate $100,000 to any single vendor or entity), (ii) Indebtedness incurred in connection with assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the refinancing obligations of any Indebtedness existing on the date of this Agreement or permitted to be incurredother Person, assumed or otherwise entered into hereunder; or (Biii) make any loans or advances to any Person, or make any capital contributions to, or investments in, any other person, (iv) pledge or otherwise encumber shares of its capital stock or the capital stock of any of its Subsidiaries, or (v) mortgage or pledge any of its assets, tangible or intangible, or create any Encumbrance thereupon;
(ixd) make except as may be required by any capital expendituresLegal Requirements, enter into, adopt, amend or terminate any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, pension, retirement, deferred compensation, employment, severance or Company Stock Plan or Compensation Plan or similar agreement; or enter into or amend any employment or severance agreement with, or increase in any manner the salary, wages, bonus, commission, or other than in accordance with the Company’s capital expenditures plan as set forth on Section 5.01(a) compensation or benefits of, any director or officer of the Company Disclosure Schedule;
(x) settle any (A) material claim or material litigation, in each case made or pending against the Company or any of its Subsidiaries; or increase in any manner the salary, wages, bonus, commission or other than any payment, discharge, settlement compensation or satisfaction where no non-monetary obligations are imposed on the Company or its Subsidiaries or would apply to Parent or its Subsidiaries and where the amounts paid or to be paid (i) are covered by insurance coverage maintained by the Company or (ii) in an amount less than one million dollars ($1,000,000), individually, and five million dollars ($5,000,000), in the aggregate or (B) any investigation by any Governmental Entity by agreeing to a material fine or penalty or non-monetary obligations;
(xi) except as required pursuant to the terms benefits of any Company Benefit Plan other employee, third party contractors or other written agreement, in each case, in effect on the date of this Agreement, (1) grant to any officer, director or employee agent of the Company or any of its Subsidiaries any increase except, in compensation (the case of employees other than increases in the ordinary course of business that are not material for employees who are not executive directors or officers of the Company or any of its Subsidiaries), (2) grant to any officer, director or for salary increases and employee of the Company or any of its Subsidiaries any change in control, severance, retention or termination compensation or benefits, or any increase in change in control, retention, severance or termination compensation or benefits, (3) enter into any employment, consulting, severance, termination, retention or change in control agreement with any officer, director or employee of the Company or any of its Subsidiaries, (4) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or any plan, agreement or arrangement which, if in effect on the date of the Agreement, would constitute a Company Benefit Plan or (5) accelerate any rights or benefits, or make any material determinations, under any Company Benefit Plan; provided, however, that the foregoing clauses (1), (2), and (3) shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees or sales representatives or to employees or sales representatives in the context of promotions based on job performance or workplace requirements, in each case in the ordinary course of business, or pursuant to existing plans, agreements, benefits and compensation arrangements and incentive grants (excluding any plans, agreements, arrangements or grants pursuant to which compensation or benefits are payable based wholly or partially on the occurrence of a change in control) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees or sales representatives in similar positions;
(xii) make any material change in accounting methods, principles or practices affecting the consolidated assets, liabilities or results of operations of the Company, other than as required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including Regulation S-X under the Securities Act;
(xiii) except as business consistent with past practice; or hire employees at the vice president level or higher except to fill vacancies; or pay any benefit (including bonuses) not required by any plan and arrangement as in effect as of the date hereof;
(e) declare or pay any bonuses, make any material Tax election, file any amended Tax Return with respect to any material Taxemployee, change any annual Tax accounting period, settle third party contractor or compromise any material Tax audit, enter into any material closing agreement, surrender any right to claim a material refund agent of Taxes or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiaries;
(xivf) acquire (by merger, amalgamation, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or make any investment either by purchase of stock or securities, contributions to capital, property transfer or acquisition (including by lease) of any material amount of properties or assets of any other individual or entity;
(g) except as expressly required pursuant to this Agreement herein, (i) pay, discharge or the terms of the applicable agreement covering the indebtedness to be repaid to which the Company satisfy any claims, liabilities or any Subsidiary is a party as in effect as of the date hereofobligations (absolute, pre-pay any long-term debt (which shall be deemed to include pre-payments accrued, asserted or repayments of lines of credit facilities unasserted contingent or other similar lines of credit or payments made in respect of any termination or settlement of any interest rate swap or other similar hedging instrument relating thereto otherwise) other than currency the payment, discharge or commodity swaps or hedging instruments entered into satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms as described in Section 5.01(a) of the Company Disclosure Schedule);
(xv) amend, modify, cancel, terminate or waive or release any material right under any Company Material Contract or enter into any new contract, agreement or arrangement that, if entered into prior to effect on the date hereof (provided that purchases of this Agreement, would be a Company Material Contract, where such action or omission would or would reasonably be expected, individually or inventory in excess of $100,000 in the aggregateaggregate to any single entity or vendor shall require the prior written consent of Parent, to which shall not be unreasonably withheld) including the purchase of any inventory or any other payment of cash, or (Aii) have a Material Adverse Effectwaive, (B) impair release, grant or transfer any rights of material value or modify or change in any material respect any existing license, lease, contract or other document;
(h) notwithstanding anything to the ability of the Company or its Subsidiaries to perform its obligations under contrary contained in this Agreement, (C) prevent pay, discharge or materially impede, interfere with, hinder satisfy any loan or delay the consummation of any of the transactions contemplated other indebtedness owed by this Agreement or (D) impair in any material respect the ability of the Company and its Subsidiaries to conduct their business as currently conducted;
(xvi) create any subsidiary of the Company or otherwise alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiaries;
(xvii) renew or enter into any noncompete or material exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries or, after the Share Acceptance Date, Parent or its Subsidiaries;
(xviii) enter into any material transaction with any of its Affiliates (other than the Company and its Subsidiaries) other than pursuant to written arrangements in effect on the date of this Agreement and excluding any employment, compensation or similar arrangements otherwise permitted pursuant to this Section 5.01(a);
(xix) transfer or make available to a third party any material research materials or material Intellectual Property, or transfer or make available to any third party any Pharmaceutical Product or product candidate owned by the Company or any Subsidiary of the Company or being studied in a Company or Subsidiary research program, except (A) Affiliate thereof as set forth in Section 5.01(a) 3.25 of the Company Disclosure Schedule Schedules or (B) pursuant to any applicable written agreement in the ordinary course of businessotherwise;
(xxi) take amend the certificate of incorporation or bylaws (or omit to takesimilar governing document) any action that adversely affects in any material respect, or would reasonably be expected to adversely effect in any material respect, any material patent or patent application, or abandon or permit to lapse any right to any material patent or patent application, in each case, of the Company or any of its Subsidiaries;
(j) adopt a plan of complete or partial liquidation or resolutions providing for the complete or partial liquidation, dissolution, merger (other than the Merger), consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(k) enter into any new lines of business or otherwise make material changes to the operation of its business;
(l) sell (whether by merger, consolidation or otherwise), lease, encumber, transfer or dispose of any assets that in the aggregate have a fair market value in excess to $100,000, or enter into any commitment or transaction (or series of related commitments or transactions) with an aggregate value in excess of $100,000;
(m) authorize or make or commit to make any capital expenditures, except for transactions in the ordinary course of business consistent with past practice (but in no event in excess of $100,000 in the aggregate);
(n) make, revoke or amend any Tax elections, make or change any method of Tax accounting (except as may be required by any Legal Requirements), file any amended Tax Returns, settle or compromise any material Tax liability, or waive or extend the statute of limitations for imposing or assessing any material Taxes;
(o) settle or compromise any suits or claims of liability against the Company or any of its Subsidiaries, or any of the respective directors (or similar governing Persons), officers, employees or agents;
(p) take any action likely to materially decrease or diminish the assets or net worth of the Company or any of its Subsidiaries;
(q) except as may be required as a result of a change in Legal Requirements or in GAAP (with the written concurrence of the Company’s independent accountants), change any of the accounting principles or practices used by it;
(r) enter into any agreement providing for the acceleration of payment, vesting or performance or other consequence as a result of a change in control of the Company or any of its Subsidiaries;
(s) enter into, amend, terminate or waive any provision of any oral or written agreement to which the Company or any of its Subsidiaries is a party with a value in excess of $100,000; or
(xxit) authorize take any ofaction or agree, in writing or commit or agree otherwise, to take any of, of the foregoing actionsactions or any action which would make any representation or warranty in ARTICLE III hereof materially untrue or incorrect.
Appears in 1 contract
Conduct of Business of the Company and its Subsidiaries. (a) Except The Company covenants and agrees that, during the period from the Agreement Date until the Share Acceptance Time, except as expressly contemplated by this Agreement, as set forth in Section 5.01(a) of the Company Disclosure Schedule, as required by Law, or unless Parent shall otherwise consent in writing, the business of the Company and its Subsidiaries shall be conducted in the ordinary course of the Company’s and its Subsidiaries’ business consistent with past practice and in compliance in all material respects with applicable Law, and the Company shall use commercially reasonable efforts to preserve intact its and its Subsidiaries’ business organization, and to preserve its present relationships with material customers, employees, licensees, licensors and other Persons with which it or any of its Subsidiaries has material business relations.
(b) Without limiting the generality of Section 5.01(a), between the Agreement Date and the Share Acceptance Time, except as otherwise expressly contemplated by this Agreement, required by Law or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course and, to the extent consistent therewith, use reasonable best efforts to preserve substantially intact its current business organizations, to keep available the services of its current officers and employees and to preserve its relationships with significant customers, suppliers, licensors, licensees, distributors, lessors and others having significant business dealings with it. Without limiting the generality of the foregoing, except as set forth in Section 5.01(a5.01(b) of the Company Disclosure Schedule, contemplated by this Agreement, or as required by Law (includingLaw, as applicable, Section 409A of the Code) or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective Time, neither the Company shall not, and shall not permit nor any of its Subsidiaries to:shall without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(i) declare, set aside aside, make or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock or propertyproperty or any combination thereof) in respect of, of any of its capital stock, other than dividends or distributions by except that a direct or indirect wholly owned Subsidiary of the Company may declare and pay a dividend to its parent and other than as required pursuant to the Rights Agreementparent;
(ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock;
(iii) purchase, redeem issue or otherwise acquire authorize the issuance of any shares of its capital stock of any class, or any options, warrants, restricted stock units, convertible securities or other rights of any kind to acquire or receive any shares of capital stock or any rights, warrants or options to acquire other ownership interest (including any such shares, other than (A) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of the Company Stock Options or as required pursuant to the terms of the ESPP, (B) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Incentive Plans and (C) the acquisition by the Company of Company Stock Options, Company Restricted Stock Units and shares of Company Restricted Stock in accordance with their terms in effect as of the date of this Agreement in connection with the forfeiture of such awards;
(iv) issue, deliver or sell any shares of its capital stock, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, other than (A) upon the exercise of Company Stock Options and rights under the ESPP outstanding on the date of this Agreement, in each case in accordance with their present terms, (B) upon the vesting of Company Restricted Stock Units outstanding on the date of this Agreement, in accordance with their present terms, (C) as required to comply with any Company Benefit Plan as in effect on the date of this Agreement, (D) upon the conversion of the Convertible Notes outstanding on the date of this Agreement, in accordance with their present terms and (E) the issuance of Rights and the issuance of Company Common Stock or Preferred Stock of the Company upon the exercise of Rights, in each case, pursuant to the terms and conditions of the Rights Agreement;
(v) amend the Company Certificate of Incorporation or the Company Bylaws or the comparable organizational documents of any Subsidiary of the Company;
(vi) merge or consolidate with, or purchase an equity interest in or a substantial portion of the assets of, any person or any division or business thereof other than purchases of assets where the amount of the consideration paid or transferred by the Company and its Subsidiaries in connection with all such transactions does not exceed one million dollars ($1,000,000phantom interest) in the aggregate;
(vii) assign, sublease, terminate, waive any material rights under, or materially amend any Lease, or sell, lease or otherwise dispose of any of its properties or assets with an aggregate value in excess of one million dollars ($1,000,000), other than sales of inventory and other assets (other than Owned Real Property or Leased Real Property) in the ordinary course of business;
(viii) (A) incur any indebtedness for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee except for the issuance of shares of Company Common Stock reserved for issuance on the Agreement Date pursuant to the exercise of Company Stock Options, the vesting of Company Warrants and the vesting of Company Restricted Stock Units, in each case outstanding on the Agreement Date and in accordance with their present terms, and except for the issuance of Company Common Stock reserved for issuance on the Agreement Date pursuant to and in accordance with Company Benefits Plans; and
(iv) purchase, repurchase, redeem or otherwise acquire, directly or indirectly, or permit any Subsidiary to purchase, repurchase, redeem or otherwise acquire, any of its securities or any securities of its Subsidiaries, or any option, warrant or right, to acquire any such indebtedness securities, or propose to do any debt securities of another person the foregoing, except as may be permitted or enter into required by any “keep well” existing Contract or other agreement Company Benefits Plans;
(v) (A) increase the compensation payable or to maintain any financial statement condition of another person (collectivelybecome payable to its current or former directors, “Indebtedness”)officers or employees, other than (1) Indebtedness incurred, assumed or otherwise entered into in the ordinary course of business (including any borrowings under the Company’s existing credit facilities and in respect of letters of credit) for additional amounts after the date hereof not in excess of five million dollars ($5,000,000) in the aggregate and (2) Indebtedness incurred in connection with the refinancing of any Indebtedness existing on the date of this Agreement or permitted to be incurred, assumed or otherwise entered into hereunder; or (B) make any loans or capital contributions to, or investments in, any other person;
(ix) make any capital expenditures, other than in accordance with the Company’s capital expenditures plan except as set forth on in Section 5.01(a5.01(b)(v) of the Company Disclosure Schedule;
, hire any person as or promote any person, (xC) settle grant any (A) material claim severance or material litigationtermination pay to, in each case made or pending against enter into, modify, amend, terminate or adopt, or promise to enter into, modify, amend, terminate or adopt, any golden parachute arrangement subject to Sections 280G and 4999 of the Company Code, or any of its Subsidiaries, other than any payment, discharge, settlement or satisfaction where no non-monetary obligations are imposed on the Company or its Subsidiaries or would apply to Parent or its Subsidiaries and where the amounts paid or to be paid (i) are covered by insurance coverage maintained by the Company or (ii) in an amount less than one million dollars ($1,000,000), individually, and five million dollars ($5,000,000), in the aggregate or (B) any investigation by any Governmental Entity by agreeing to a material fine or penalty or non-monetary obligations;
(xi) except as required pursuant to the terms of any Company Benefit Plan or other written agreementplan, in each case, in effect on the date of this Agreement, (1) grant to any officer, director or employee of the Company or any of its Subsidiaries any increase in compensation (other than increases in the ordinary course of business that are not material for employees who are not executive officers of the Company or any of its Subsidiaries), (2) grant to any officer, director or employee of the Company or any of its Subsidiaries any change in control, severance, retention or termination compensation or benefits, or any increase in change in control, retention, severance or termination compensation or benefits, (3) enter into any employment, consulting, severance, termination, retention or change in control agreement with any officer, director or employee of the Company or any of its Subsidiaries, (4) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or any planContract, agreement or arrangement which, if in effect on the date of the Agreement, that would constitute be a Company Benefit Plan Plan, (D) amend any existing stock option or other equity-based compensation or enter into any agreement under which any stock option or other equity-based compensation would be required to be issued, except as permitted by Section 3.03, or (5E) except as provided herein and except as set forth in Section 5.01(b)(v) of the Company Disclosure Schedule, accelerate any rights or benefits, or make any material determinations, under any Company Benefit Plan; provided, however, that the foregoing clauses ;
(vi) (A) (1) incur any Indebtedness for or enter into any Contract for the incurrence of Indebtedness, other than maintaining or replacing any letter of credit entered into in connection with the Real Property Leases or with equipment leases, or any intercompany indebtedness, or (2) incur any Indebtedness for or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for (whether directly, contingently or otherwise), the obligations of any Person (2other than a wholly owned Subsidiary); or (B) authorize any capital expenditures or purchase of fixed assets which are in excess of US$100,000 in the aggregate;
(vii) adopt or propose any change to its certificate of incorporation (including by filing a certificate of designation), and certificate of formation, bylaws, partnership agreement, operating agreement or other similar organizational documents (3whether by merger, consolidation, acquisition of stock or assets or otherwise);
(viii) shall not restrict acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than any of the Company or its Subsidiaries and other than advances to employees for travel and other business expenses in the ordinary course of business consistent with past practice);
(ix) sell, lease, assign, license, mortgage or otherwise transfer, or create or incur any Lien (other than Permitted Liens), or pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of the assets (including any intangible assets), licenses, operations, rights, securities, properties, interests or businesses of the Company and its Subsidiaries from entering into or making available to newly hired employees or sales representatives or to employees or sales representatives Subsidiaries, other than in the context ordinary course of promotions based on job performance or workplace requirements, in each case business consistent with past practice;
(x) except for customer Contracts entered into in the ordinary course of business, or pursuant to existing plans, agreements, benefits and compensation arrangements and incentive grants (excluding any plans, agreements, arrangements or grants pursuant to which compensation or benefits are payable based wholly or partially on the occurrence of a change in control) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees or sales representatives in similar positions;
(xii) make any material change in accounting methods, principles or practices affecting the consolidated assets, liabilities or results of operations of the Company, other than as required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including Regulation S-X under the Securities Act;
(xiii) except as consistent with past practice, make any material Tax election, file any amended Tax Return with respect to any material Tax, change any annual Tax accounting period, settle or compromise any material Tax audit, enter into any material closing agreement, surrender any right to claim Contract that would have been a material refund of Taxes or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiaries;
(xiv) except as required pursuant to this Agreement or the terms of the applicable agreement covering the indebtedness to be repaid to which the Company or any Subsidiary is a party as in effect as of the date hereof, pre-pay any long-term debt (which shall be deemed to include pre-payments or repayments of lines of credit facilities or other similar lines of credit or payments made in respect of any termination or settlement of any interest rate swap or other similar hedging instrument relating thereto other than currency or commodity swaps or hedging instruments entered into in the ordinary course of business as described in Section 5.01(a) of the Company Disclosure Schedule);
(xv) amend, modify, cancel, terminate or waive or release any material right under any Company Material Contract or enter into any new contract, agreement or arrangement that, if had it been entered into prior to the date of this Agreement, would be a Company Material Contract, where such action amend or omission would or would reasonably be expected, individually or in the aggregate, to (A) have a Material Adverse Effect, (B) impair modify in any material respect the ability or terminate or default under any Company Material Contract or otherwise waive, release or assign any material rights, claims or benefits of any of the Company or its Subsidiaries to perform its obligations under this Agreementthereunder, in each case (C) prevent other than in the case of a default), other than in the ordinary course of business consistent with past practice and except for renewals or materially impede, interfere with, hinder or delay terminations in accordance with the consummation terms of any of the transactions contemplated by this Agreement or Company Material Contract;
(Dxi) impair change in any material respect any of the ability Company or its Subsidiaries’ methods of accounting or accounting practices, policies or procedures, except as required by concurrent changes in GAAP or SEC rules and regulations, in either case as agreed to by its independent public accountants;
(xii) settle or compromise, or offer or propose to settle or compromise, any Claim if doing so would (A) require the payment of monetary damages by any of the Company or its Subsidiaries after the date hereof of any amount in excess of US$25,000 per Claim or US$100,000 in the aggregate for all such Claims or (B) involve any injunctive or other non-monetary relief which, in either case, imposes material restrictions on the business operations of the Company and its Subsidiaries to conduct their business Subsidiaries, taken as currently conducteda whole;
(xvixiii) create any subsidiary propose or adopt a plan of the Company complete or otherwise alter through partial liquidation, dissolution, merger, liquidationconsolidation, restructuring, recapitalization or other reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiaries;
(xvii) renew or enter into any noncompete or material exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries or, after the Share Acceptance Date, Parent or its Subsidiaries;
(xviii) enter into any material transaction with any of its Affiliates (other than the Company and its Subsidiaries) other than pursuant to written arrangements in effect on the date of this Agreement and excluding any employment, compensation or similar arrangements otherwise permitted pursuant to this Section 5.01(a);
(xix) transfer or make available to a third party any material research materials or material Intellectual Property, or transfer or make available to any third party any Pharmaceutical Product or product candidate owned by the Company or any Subsidiary of the Company or being studied in a Company or Subsidiary research program, except (A) as set forth in Section 5.01(a) of the Company Disclosure Schedule or (B) pursuant to any applicable written agreement in the ordinary course of business;
(xx) take (or omit to take) any action that adversely affects in any material respect, or would reasonably be expected to adversely effect in any material respect, any material patent or patent application, or abandon or permit to lapse any right to any material patent or patent application, in each case, of the Company or any of its SubsidiariesMerger; or
(xxixiv) authorize or make any of, or commit or agree commitment to take do any of, of the foregoing actionsforegoing.
Appears in 1 contract
Conduct of Business of the Company and its Subsidiaries. (a) Except as set forth in Section 5.01(a) of Unless the Company Disclosure Schedule, contemplated by this Agreement, required by Law or consented to SPAC shall otherwise consents in writing by Parent (such consents consent not to be unreasonably withheld withheld, conditioned or delayed), during the period from the date of Interim Period, except as expressly contemplated by this Agreement to or the Effective TimeAncillary Documents, the Company shall, and shall cause each of its Subsidiaries toshall (i) conduct their business, carry on its business in all material respects, in the ordinary course andof business consistent with past practice, (ii) comply in all material respects with all Laws applicable to the extent consistent therewithCompany and its business, use assets and employees, and (iii) take all commercially reasonable best efforts measures necessary or appropriate to preserve substantially intact intact, in all material respects, its current business organizationsorganization, to keep available the services of its current officers their managers, directors, officers, employees and employees individual service providers, and to preserve its relationships with significant customersthe possession, supplierscontrol and condition of their assets. Except as expressly contemplated by the terms of this Agreement or the Ancillary Documents, licensorsduring the Interim Period, licensees, distributors, lessors and others having significant business dealings with it. Without limiting without the generality prior written consent of the foregoingSPAC (such consent not to be unreasonably withheld, conditioned or delayed), the Company and its Subsidiaries shall not, unless required by applicable Law:
(a) amend, waive or otherwise change, in any respect, its Organizational Documents, except as required by applicable Law;
(b) authorize for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any of its equity securities or any options, restricted stock units, restricted stock, phantom stock, stock appreciation, profit participation, warrants, commitments, subscriptions or rights of any kind to acquire or sell any of its equity securities, or other securities, including any securities convertible into or exchangeable for any of its shares or other equity securities or securities of any class and any other equity-based or phantom equity awards, or engage in any hedging transaction with a third Person with respect to such securities;
(c) split, combine, recapitalize or reclassify any of its shares or other equity interests or issue any other securities in respect thereof or declare, pay or set aside any dividend or other distribution (whether in cash, equity or property or any combination thereof) in respect of its equity interests, or directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any of its securities (except for the repurchase of Company Shares from former employees, non-employee directors and consultants in accordance with agreements as in effect on the date hereof that are set forth on the Company Disclosure Schedules providing for the repurchase of shares in connection with any termination of service);
(d) incur, create, assume, prepay, commit to, or otherwise become liable for any Indebtedness (directly, contingently or otherwise) in excess of $250,000 individually or $750,000 in the aggregate, make a loan or advance to or investment in any third party (other than advancement of expenses to employees in the ordinary course of business), or guarantee or endorse any Indebtedness, Liability or obligation of any Person in excess of $250,000 individually or $750,000 in the aggregate;
(e) except as required by the terms in existence as of the date hereof of any Company Benefit Plan set forth on Section 5.01(a5.20(b) of the Company Disclosure ScheduleSchedules or applicable Law, contemplated by this Agreement(i) increase or decrease the wages, required by Law (including, as applicable, Section 409A of the Code) salaries or consented any other compensation or benefits provided to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to:
(i) declarecurrent or former employees, set aside officers, directors or pay other individual service providers, including under any dividends on, Company Benefit Plan or make any other distributions (whether in cashbenefit or compensation plan, stock agreement, contract, program, policy or property) in respect of, any of its capital stock, other than dividends or distributions by arrangement that would be a direct or indirect wholly owned Subsidiary of the Company to its parent and other than as required pursuant to the Rights Agreement;
(ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in lieu of or in substitution for shares of its capital stock;
(iii) purchase, redeem or otherwise acquire any shares of its capital stock or any rights, warrants or options to acquire any such shares, other than (A) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of the Company Stock Options or as required pursuant to the terms of the ESPP, (B) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Incentive Plans and (C) the acquisition by the Company of Company Stock Options, Company Restricted Stock Units and shares of Company Restricted Stock in accordance with their terms Benefit Plan if in effect as of the date hereof (other than ordinary course increases in the annual base salary (and corresponding increases in any annual target bonus linked to a percentage of this Agreement base salary) to employees whose annual base salary is below $100,000 (prior to such increase)), (ii) make, announce or commit to make any retention, change in connection with control, transaction, severance or similar payment (whether cash, properties or securities) to any employee, officer, director or other individual service provider of the forfeiture of such awards;
Company or (iviii) issue, deliver or sell any shares of its capital stock, any other voting securities or any securities convertible enter into, establish, amend, modify, commence participation in or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, other than (A) upon the exercise of Company Stock Options and rights under the ESPP outstanding on the date of this Agreement, in each case in accordance with their present terms, (B) upon the vesting of Company Restricted Stock Units outstanding on the date of this Agreement, in accordance with their present terms, (C) as required to comply with terminate any Company Benefit Plan, including any benefit or compensation plan, policy, program, contract, agreement or arrangement that would be a Company Benefit Plan as if in effect on the date of this Agreement, (D) upon the conversion of the Convertible Notes outstanding on the date of this Agreement, in accordance with their present terms and (E) the issuance of Rights and the issuance of Company Common Stock or Preferred Stock of the Company upon the exercise of Rights, in each case, pursuant to the terms and conditions of the Rights Agreementhereof;
(vf) amend the Company Certificate of Incorporation take any action to (i) hire, engage, or the Company Bylaws otherwise enter into any employment or the comparable organizational documents of any Subsidiary of the Company;
(vi) merge consulting agreement or consolidate other service agreement with, or purchase an equity interest in or a substantial portion of the assets of, any person or any division or business thereof terminate (other than purchases of assets where the amount of the consideration paid or transferred by the Company and its Subsidiaries in connection with all such transactions does not exceed one million dollars ($1,000,000for “cause”) in the aggregate;
(vii) assignany officer, subleasedirector, terminate, waive any material rights under, or materially amend any Lease, or sell, lease or otherwise dispose of any of its properties or assets with an aggregate value in excess of one million dollars ($1,000,000)or, other than sales of inventory and other assets (other than Owned Real Property or Leased Real Property) in the ordinary course consistent with past practice, any employee or other individual service provider of businessthe Company, (ii) grant, promise or announce any cash, equity, equity-based or phantom equity awards, other than in the ordinary course and consistent with past practice, (iii) accelerate, or commit to accelerate, the payment, funding, right to payment or vesting of any compensation or benefits, (iv) enter into, amend, negotiate or terminate any Labor Agreement or recognize or certify any labor union, works council or labor organization as the bargaining representative for any employees of the Company, or (v) knowingly or through conduct waive or release any noncompetition, nonsolicitation, or other restrictive covenant obligation of any current or former employee or other individual service provider;
(viiig) (A) incur make, change or rescind any indebtedness for borrowed moneymaterial election relating to Taxes, issue settle or sell compromise any debt securities Action, arbitration, investigation, audit or warrants or other rights controversy relating to acquire any debt securities of the Company or any of its SubsidiariesTaxes, guarantee any such indebtedness or any debt securities of another person or enter into any “keep well” closing agreement with respect to Taxes, file any amended Tax Return or other agreement claim for refund, or make any material change in its accounting or Tax policies or procedures, in each case except as required by applicable Law or in compliance with IFRS;
(h) sell, assign, transfer, license or sublicense to maintain any financial statement condition of another person (collectively, “Indebtedness”), other than (1) Indebtedness incurred, assumed Person or otherwise entered into extend, materially amend or modify, abandon, permit to lapse or expire, subject to any Lien, otherwise dispose of, or fail to preserve any material Owned IP or Company IP Licenses (excluding non-exclusive licenses granted to customers in the ordinary course of business (including consistent with past practice), disclose to any borrowings under Person who has not entered into a confidentiality agreement any Trade Secrets, or disclose, license, escrow, or otherwise make available, or grant any rights to, any Source Code owned or purported to be owned by the Company’s existing credit facilities and in respect of letters of credit) for additional amounts after the date hereof not in excess of five million dollars ($5,000,000) in the aggregate and (2) Indebtedness incurred in connection with the refinancing of any Indebtedness existing on the date of this Agreement or permitted to be incurred, assumed or otherwise entered into hereunder; or (B) make any loans or capital contributions to, or investments in, any other person;
(ixi) make any capital expenditures, other than in accordance the ordinary course and consistent with the Company’s capital expenditures plan as set forth on Section 5.01(a) of the Company Disclosure Schedule;
(x) settle any (A) material claim or material litigationpast practice with respect to customers and suppliers, in each case made or pending against the Company or any of its Subsidiaries, other than any payment, discharge, settlement or satisfaction where no non-monetary obligations are imposed on the Company or its Subsidiaries or would apply to Parent or its Subsidiaries and where the amounts paid or to be paid (i) are covered by insurance coverage maintained by enter into any amendment of any Company Material Contract or enter into any Contract that if entered into prior to the Effective Date would be a Company or Material Contract, (ii) in an amount less than one million dollars ($1,000,000)voluntarily terminate any Company Material Contract, individually, and five million dollars ($5,000,000), in except for any termination at the aggregate or (B) any investigation by any Governmental Entity by agreeing to a material fine or penalty or non-monetary obligations;
(xi) except as required end of the term of such Company Material Contract pursuant to the terms of such Company Material Contract, or (iii) waive any material benefit or right under any Company Benefit Plan or other written agreementMaterial Contract;
(j) fail to maintain its books, accounts and records in each case, in effect on the date of this Agreement, (1) grant to any officer, director or employee of the Company or any of its Subsidiaries any increase in compensation (other than increases all material respects in the ordinary course of business that are not material consistent with past practice;
(k) establish any Subsidiary or enter into any new line of business;
(l) voluntarily terminate, cancel, materially modify or amend, permit to lapse, or fail to keep in force any insurance policies maintained for employees who are not executive officers the benefit of the Company or providing insurance coverage with respect to its assets, operations and activities, without replacing or revising such policies with a comparable amount of insurance coverage with substantially similar coverage to that which is currently in effect;
(m) revalue any of its Subsidiaries), (2) grant to any officer, director material assets or employee of the Company or any of its Subsidiaries any change in control, severance, retention or termination compensation or benefits, or any increase in change in control, retention, severance or termination compensation or benefits, (3) enter into any employment, consulting, severance, termination, retention or change in control agreement with any officer, director or employee of the Company or any of its Subsidiaries, (4) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or any plan, agreement or arrangement which, if in effect on the date of the Agreement, would constitute a Company Benefit Plan or (5) accelerate any rights or benefits, or make any material determinations, under any Company Benefit Plan; provided, however, that the foregoing clauses (1), (2), and (3) shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees or sales representatives or to employees or sales representatives in the context of promotions based on job performance or workplace requirements, in each case in the ordinary course of business, or pursuant to existing plans, agreements, benefits and compensation arrangements and incentive grants (excluding any plans, agreements, arrangements or grants pursuant to which compensation or benefits are payable based wholly or partially on the occurrence of a change in control) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees or sales representatives in similar positions;
(xii) make any material change in accounting methods, principles or practices affecting practices, except to the consolidated assets, liabilities or results of operations of extent required to comply with IFRS and after consulting with the Company, other than as required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including Regulation S-X under the Securities Act’s outside auditors;
(xiiin) except as consistent with past practicewaive, make any material Tax electionrelease, file any amended Tax Return with respect to any material Taxassign, change any annual Tax accounting periodcommence, initiate, satisfy, settle or compromise any material Tax auditAction, enter into any material closing agreementother than waivers, surrender any right to claim a material refund releases, assignments, settlements or compromises that involve only the payment of Taxes monetary damages (and not the imposition of equitable relief on, or consent to any extension or waiver the admission of the limitation period applicable to any material Tax claim or assessment relating to wrongdoing by, the Company or its Affiliates) not in excess of $100,000 individually or $500,000 in the aggregate;
(o) close or materially reduce its activities, effect any group layoff or effect any other group personnel reduction, at any of its Subsidiariesfacilities, provided that the Company shall have the right to terminate personnel in accordance with the terms of Section 6.2(f);
(xivp) except as required pursuant to this Agreement acquire, including by merger, consolidation, acquisition of equity interests or the terms of the applicable agreement covering the indebtedness to be repaid to which the Company assets, or any Subsidiary is a party as in effect as other form of the date hereofbusiness combination, pre-pay any long-term debt (which shall be deemed to include pre-payments corporation, partnership, limited liability company, other business organization or repayments any division thereof, or any material amount of lines of credit facilities or other similar lines of credit or payments made in respect of any termination or settlement of any interest rate swap or other similar hedging instrument relating thereto other than currency or commodity swaps or hedging instruments entered into in assets outside the ordinary course of business consistent with past practice;
(q) other than as described contemplated by the Company’s capital expenditures budget attached hereto as Schedule C, make capital expenditures in Section 5.01(aexcess of $100,000 (individually for any project (or set of related projects) of or $500,000 in the Company Disclosure Scheduleaggregate);
(xvr) amendauthorize, modifyrecommend, cancelpropose or announce an intention to adopt, terminate or waive otherwise effect a plan of complete or release any material right under any Company Material Contract partial liquidation, rehabilitation, dissolution, merger, consolidation, restructuring, recapitalization or enter into any new contract, agreement other reorganization or arrangement that, if entered into prior to the date of this Agreement, would be a Company Material Contract, where such action or omission would or would reasonably be expected, individually or in the aggregate, to (A) have a Material Adverse Effect, (B) impair in any material respect the ability of the Company or its Subsidiaries to perform its obligations under this Agreement, (C) prevent or materially impede, interfere with, hinder or delay the consummation of any of the transactions contemplated by this Agreement or (D) impair in any material respect the ability of the Company and its Subsidiaries to conduct their business as currently conductedsimilar transaction;
(xvis) create purchase, sell, lease, license, transfer, exchange or swap, pledge, mortgage or otherwise pledge or encumber (including securitizations), or transfer or otherwise dispose of any subsidiary material portion of its properties, assets or rights (including equity interests of the Company or otherwise alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiaries;Company); or
(xvii) renew or enter into any noncompete or material exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries or, after the Share Acceptance Date, Parent or its Subsidiaries;
(xviiit) enter into any material transaction agreement, understanding or arrangement with any respect to the voting of its Affiliates (other than equity securities of the Company. Nothing contained in this Section 6.2 shall be deemed to give the SPAC or AmalCo Sub, directly or indirectly, the right to control or direct the Company and its Subsidiaries) other than pursuant prior to written arrangements in effect on the date of this Agreement and excluding any employmentClosing. Prior to the Closing, compensation or similar arrangements otherwise permitted pursuant to this Section 5.01(a);
(xix) transfer or make available to a third party any material research materials or material Intellectual Property, or transfer or make available to any third party any Pharmaceutical Product or product candidate owned by the Company or any Subsidiary of shall exercise, consistent with the Company or being studied in a Company or Subsidiary research programterms and conditions hereof, except (A) as set forth in Section 5.01(a) of the Company Disclosure Schedule or (B) pursuant to any applicable written agreement in the ordinary course of business;
(xx) take (or omit to take) any action that adversely affects in any material respect, or would reasonably be expected to adversely effect in any material respect, any material patent or patent application, or abandon or permit to lapse any right to any material patent or patent application, in each case, of the Company or any of control over its Subsidiaries; or
(xxi) authorize any of, or commit or agree to take any of, the foregoing actionsbusiness and operations.
Appears in 1 contract
Samples: Business Combination Agreement (Focus Impact Acquisition Corp.)
Conduct of Business of the Company and its Subsidiaries. (a) Except From and after the date of this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with its terms (the “Interim Period”), the Company and its Subsidiaries shall, except as expressly contemplated by this Agreement or any Ancillary Document, as required by applicable Law, as set forth in on Section 5.01(a5.1(a) of the Company Disclosure ScheduleSchedules, contemplated by this Agreement, required by Law or as consented to in writing by Parent (such consents not to be unreasonably withheld or delayed)KBL, during conduct the period from the date of this Agreement to the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, carry on its business Business in the ordinary course and, to the extent consistent therewith, use reasonable best efforts to preserve substantially intact its current business organizations, to keep available the services of its current officers and employees and to preserve its relationships with significant customers, suppliers, licensors, licensees, distributors, lessors and others having significant business dealings with it. past practice in all material respects.
(b) Without limiting the generality of the foregoing, from and after the date of this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with its terms, except as expressly contemplated by this Agreement or any Ancillary Document, as required by applicable Law or any contract or agreement to which the Company, any Subsidiary or any of their respective Affiliates are a party or bound, as set forth in on Section 5.01(a5.1(b) of the Company Disclosure Schedule, contemplated by this Agreement, required by Law (including, Schedules or as applicable, Section 409A of the Code) or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective TimeKBL, the Company shall not, and the Company Subsidiaries shall not permit do any of its Subsidiaries tothe following:
(i) declare, set aside aside, make or pay any dividends a dividend on, or make any other distributions (whether in cash, stock or property) distribution in respect of, any of its capital stockequity interests, other than dividends or distributions by a direct repurchase, redeem, or indirect wholly owned Subsidiary otherwise acquire any outstanding equity interests of the Company to its parent and other than as required pursuant to the Rights Agreementor any Subsidiary;
(ii) splitacquire in any manner (whether by merger or consolidation, combine or reclassify any the purchase of its capital stock or issue or authorize the issuance of any other securities in lieu of or in substitution for shares of its capital stock;
(iii) purchase, redeem or otherwise acquire any shares of its capital stock or any rights, warrants or options to acquire any such shares, other than (A) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of the Company Stock Options or as required pursuant to the terms of the ESPP, (B) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Incentive Plans and (C) the acquisition by the Company of Company Stock Options, Company Restricted Stock Units and shares of Company Restricted Stock in accordance with their terms in effect as of the date of this Agreement in connection with the forfeiture of such awards;
(iv) issue, deliver or sell any shares of its capital stock, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, other than (A) upon the exercise of Company Stock Options and rights under the ESPP outstanding on the date of this Agreement, in each case in accordance with their present terms, (B) upon the vesting of Company Restricted Stock Units outstanding on the date of this Agreement, in accordance with their present terms, (C) as required to comply with any Company Benefit Plan as in effect on the date of this Agreement, (D) upon the conversion of the Convertible Notes outstanding on the date of this Agreement, in accordance with their present terms and (E) the issuance of Rights and the issuance of Company Common Stock or Preferred Stock of the Company upon the exercise of Rights, in each case, pursuant to the terms and conditions of the Rights Agreement;
(v) amend the Company Certificate of Incorporation or the Company Bylaws or the comparable organizational documents of any Subsidiary of the Company;
(vi) merge or consolidate with, or purchase an equity interest in or a substantial material portion of the assets of, of or otherwise) any person business or any corporation, partnership, association or other business organization or division or business thereof other than purchases of assets where the amount of the consideration paid or transferred by the Company and its Subsidiaries in connection with all such transactions does not exceed one million dollars ($1,000,000) in the aggregate;
(vii) assign, sublease, terminate, waive any material rights under, or materially amend any Lease, or sell, lease or otherwise dispose of any of its properties or assets with an aggregate value in excess of one million dollars ($1,000,000)other Person, other than sales the acquisition of assets or inventory and other assets (other than Owned Real Property or Leased Real Property) in the ordinary course of business;
(iii) amend the Governing Documents of the Company or any Subsidiary, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction;
(iv) sell, lease, license or otherwise dispose of any assets of the Business, other than the sale or disposition of inventory or obsolete equipment in the ordinary course of business;
(v) transfer, issue, sell, grant or otherwise dispose of (A) any equity interests of the Company or any Subsidiary or (B) any options, warrants, rights of conversion or other rights, agreements, arrangements or commitments obligating the Company or any Subsidiary to issue, deliver or sell any equity interests of the Company or any Subsidiary, as the case may be;
(vi) form any Subsidiary or acquire any equity interest or other interest in any other Person;
(vii) incur, create, assume, prepay or otherwise become liable for any Indebtedness (directly, contingently or otherwise), make a loan or advance to or investment in any third party in excess of Two Hundred and Fifty Thousand Dollars ($250,000), or guarantee or endorse any Indebtedness, Liability or obligation of any Person in excess of Two Hundred and Fifty Thousand Dollars ($250,000).
(viii) (A) incur amend, modify or terminate any indebtedness Company Material Contract or Company Leased Real Property (excluding, for borrowed moneythe avoidance of doubt, issue any expiration of any Company Material Contract or sell Company Leased Real Property pursuant to its terms), (B) waive any debt securities benefit or warrants right under any Company Material Contract or other rights to acquire any debt securities of the Company Leased Real Property, or any of its Subsidiaries, guarantee any such indebtedness or any debt securities of another person or (C) enter into any “keep well” contract or other agreement to maintain any financial statement condition of another person (collectively, “Indebtedness”), other than (1) Indebtedness incurred, assumed or otherwise that if entered into in prior to the ordinary course of business (including any borrowings under the Company’s existing credit facilities execution and in respect of letters of credit) for additional amounts after the date hereof not in excess of five million dollars ($5,000,000) in the aggregate and (2) Indebtedness incurred in connection with the refinancing of any Indebtedness existing on the date delivery of this Agreement or permitted to would be incurred, assumed or otherwise entered into hereunder; or a Company Material Contract;
(Bix) make any loans loans, advances or capital contributions to, or investments in, any other person;
(ix) make any capital expenditures, other than in accordance with Person except KBL or the Company’s capital expenditures plan as set forth on Section 5.01(a) of the Company Disclosure ScheduleSponsor;
(x) settle any (A) material claim or material litigation, in each case made or pending against the Company or any of its Subsidiaries, other than any payment, discharge, settlement or satisfaction where no non-monetary obligations are imposed on the Company or its Subsidiaries or would apply to Parent or its Subsidiaries and where the amounts paid or to be paid (i) are covered by insurance coverage maintained by the Company or (ii) in an amount less than one million dollars ($1,000,000), individually, and five million dollars ($5,000,000), in the aggregate or (B) any investigation by any Governmental Entity by agreeing to a material fine or penalty or non-monetary obligations;
(xi) except as required pursuant to the terms of any Company Benefit Plan or other written agreement, in each case, in effect on the date of this Agreement, (1) grant to any officer, director or employee of the Company or any of its Subsidiaries any increase in compensation (other than increases in the ordinary course of business that are not material for employees who are not executive officers business, as required under the terms of any Employee Benefit Plan or applicable Law, or arrangements the cost of which is borne by the Company (A) adopt or amend any material Company Plan, including in respect of its Subsidiaries), (2) grant to any officer, director or employee of the Company or any of its Subsidiaries any change in control, severance, retention or termination compensation or benefitsenhanced severance arrangements, or any increase in change in control, retention, severance or termination compensation or benefits, (3) enter into any employment, consulting, severance, termination, retention Employee Benefit Plan that if entered into prior to the execution and delivery of this Agreement would be a Company Plan; (B) increase the compensation or change in control agreement with benefits payable to any officer, director or employee of the Company or any of its Subsidiaries, ; (4C) establish, adopt, enter into or amend in any material with respect any collective bargaining agreement or any plan, agreement or arrangement which, if in effect on the date of the Agreement, would constitute a Company Benefit Plan or (5) accelerate any rights or benefits, or make any material determinations, under any Company Benefit Plan; provided, however, that the foregoing clauses (1), (2), and (3) shall not restrict to the Company or any of its Subsidiaries from entering into Subsidiaries, enter into, adopt, extend, renew, terminate or making available to newly hired employees materially amend any collective bargaining agreement or sales representatives other Agreement with any labor organization or to employees labor union, or sales representatives (D) engage in the context of promotions based on job performance any “plant closing” or workplace requirements“mass layoff” (as those terms are defined under WARN) or similar layoff under applicable Laws;
(xi) (A) make, in each case in change or revoke any election concerning Taxes outside the ordinary course of business, or pursuant to existing plans, agreements, benefits and compensation arrangements and incentive grants (excluding any plans, agreements, arrangements or grants pursuant to which compensation or benefits are payable based wholly or partially on the occurrence of a change in control) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees or sales representatives in similar positions;
(xii) make any material change in accounting methods, principles or practices affecting the consolidated assets, liabilities or results of operations of the Company, other than as required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including Regulation S-X under the Securities Act;
(xiii) except as business consistent with past practice, make any material Tax election, file any amended Tax Return with respect to any material Tax, change any annual Tax accounting period, settle or compromise any material Tax audit, (B) enter into any material Tax closing agreement, surrender (C) settle any right to material Tax claim a material refund of Taxes or assessment, or (D) consent to any extension or waiver of the limitation period applicable to or relating to any material Tax claim or assessment relating assessment, other than any such extension or waiver that is obtained in the ordinary course of business;
(xii) initiate any Proceeding or enter into, or propose to enter into, any releases, settlements or compromises of any Proceedings;
(xiii) adopt a plan of complete or partial liquidation, dissolution, or restructuring of the Company or any of its Subsidiaries;
(xiv) except as required pursuant with respect to this Agreement the Company, any of its Subsidiaries or the terms Business, commit or authorize any capital commitment or capital expenditure (or series of the applicable agreement covering the indebtedness to be repaid to which the Company capital commitments or any Subsidiary is a party as in effect as of the date hereofcapital expenditures), pre-pay any long-term debt (which shall be deemed to include pre-payments or repayments of lines of credit facilities or other similar lines of credit or payments made in respect of any termination or settlement of any interest rate swap or other similar hedging instrument relating thereto other than currency or commodity swaps or hedging instruments entered into capital expenditures in the ordinary course of business as described in Section 5.01(a) of the Company Disclosure Schedule)an amount not to exceed $25,000;
(xv) amendenter into, modifyconduct, cancelengage in or otherwise operate any new line of business;
(xvi) enter into, terminate renew, modify or waive or release any material right under revise any Company Material Contract Related Party Transaction (or enter into any new contract, contract or agreement or arrangement that, that if entered into prior to the date execution and delivery of this Agreement, Agreement would be a Company Material Contract, where such action or omission would or would reasonably be expected, individually or in the aggregate, to (A) have a Material Adverse Effect, (B) impair in any material respect the ability of the Company or its Subsidiaries to perform its obligations under this Agreement, (C) prevent or materially impede, interfere with, hinder or delay the consummation of any of the transactions contemplated by this Agreement or (D) impair in any material respect the ability of the Company and its Subsidiaries to conduct their business as currently conducted;
(xvi) create any subsidiary of the Company or otherwise alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any SubsidiariesRelated Party Transaction);
(xvii) renew transfer any cash or enter into any noncompete or material exclusivity agreement that would restrict or limit, cash Equivalents to a new bank account in any material respect, the operations of jurisdiction in which the Company or any of its Subsidiaries does not, as of the date of this Agreement, maintain one or more bank accounts; or, after the Share Acceptance Date, Parent or its Subsidiaries;
(xviii) enter into any material transaction with agreement to take, or cause to be taken, any of its Affiliates (other than the Company and its Subsidiaries) other than pursuant to written arrangements in effect on the date of this Agreement and excluding any employment, compensation or similar arrangements otherwise permitted pursuant to this Section 5.01(a);
(xix) transfer or make available to a third party any material research materials or material Intellectual Property, or transfer or make available to any third party any Pharmaceutical Product or product candidate owned by the Company or any Subsidiary of the Company or being studied in a Company or Subsidiary research program, except (A) as set forth in Section 5.01(a) of the Company Disclosure Schedule or (B) pursuant to any applicable written agreement in the ordinary course of business;
(xx) take (or omit to take) any action that adversely affects in any material respect, or would reasonably be expected to adversely effect in any material respect, any material patent or patent application, or abandon or permit to lapse any right to any material patent or patent application, in each case, of the Company or any of its Subsidiaries; or
(xxi) authorize any of, or commit or agree to take any of, the foregoing actions.
Appears in 1 contract
Samples: Business Combination Agreement (KBL Merger Corp. Iv)
Conduct of Business of the Company and its Subsidiaries. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company agrees to conduct the businesses of the Company and its Subsidiaries, except to the extent that Parent shall otherwise consent in writing in accordance with Section 5.3 hereof, in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to pay the debts and Taxes of the Company and its Subsidiaries when due (a) Except subject to Parent’s review and consent to the filing of any Tax Return, as set forth in Section 5.01(a5.1(e) below), to pay or perform other obligations when due, and, to the extent consistent with such business, to preserve intact the present business organizations of the Company Disclosure Scheduleand its Subsidiaries, contemplated by this Agreementkeep available the services of the present officers and employees of the Company and its Subsidiaries and to use its best efforts to preserve the relationships of the Company and its Subsidiaries with customers, required by Law suppliers, distributors, licensors, licensees, and others having business dealings with them, all with the goal of preserving unimpaired the goodwill and ongoing businesses of the Company and its Subsidiaries at the Effective Time. The Company shall promptly notify Parent of any event or consented to occurrence or emergency not in writing by Parent (such consents not to be unreasonably withheld the ordinary course of business of the Company and its Subsidiaries and any material event involving the Company or delayed), any Subsidiary that arises during the period from the date of this Agreement to and continuing until the earlier of the termination date of this Agreement or the Effective Time, the Company shall, . Except as expressly contemplated by this Agreement and shall cause each of its Subsidiaries to, carry on its business in the ordinary course and, to the extent consistent therewith, use reasonable best efforts to preserve substantially intact its current business organizations, to keep available the services of its current officers and employees and to preserve its relationships with significant customers, suppliers, licensors, licensees, distributors, lessors and others having significant business dealings with it. Without limiting the generality of the foregoing, except as expressly set forth in Section 5.01(a) 5.1 of the Company Disclosure Schedule, contemplated by this Agreement, required by Law (including, as applicable, Section 409A of the Code) or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective Time, the Company shall not, and the Company shall not permit any cause each Subsidiary to not, without the prior written consent of its Subsidiaries toParent in accordance with Section 5.3 hereof:
(ia) declarecause or permit any modifications, set aside amendments or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock, other than dividends or distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent and other than as required pursuant changes to the Rights Agreement;
(ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in lieu of or in substitution for shares of its capital stock;
(iii) purchase, redeem or otherwise acquire any shares of its capital stock or any rights, warrants or options to acquire any such shares, other than (A) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of the Company Stock Options or as required pursuant to the terms of the ESPP, (B) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Incentive Plans and (C) the acquisition by the Company of Company Stock Options, Company Restricted Stock Units and shares of Company Restricted Stock in accordance with their terms in effect as of the date of this Agreement in connection with the forfeiture of such awards;
(iv) issue, deliver or sell any shares of its capital stock, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, other than (A) upon the exercise of Company Stock Options and rights under the ESPP outstanding on the date of this Agreement, in each case in accordance with their present terms, (B) upon the vesting of Company Restricted Stock Units outstanding on the date of this Agreement, in accordance with their present terms, (C) as required to comply with any Company Benefit Plan as in effect on the date of this Agreement, (D) upon the conversion of the Convertible Notes outstanding on the date of this Agreement, in accordance with their present terms and (E) the issuance of Rights and the issuance of Company Common Stock or Preferred Stock of the Company upon the exercise of Rights, in each case, pursuant to the terms and conditions of the Rights Agreement;
(v) amend the Company Certificate of Incorporation or the Company Bylaws or the comparable organizational documents of any Subsidiary of the Company;
(vi) merge or consolidate with, or purchase an equity interest in or a substantial portion of the assets of, any person or any division or business thereof other than purchases of assets where the amount of the consideration paid or transferred by the Company and its Subsidiaries in connection with all such transactions does not exceed one million dollars ($1,000,000) in the aggregate;
(vii) assign, sublease, terminate, waive any material rights under, or materially amend any Lease, or sell, lease or otherwise dispose of any of its properties or assets with an aggregate value in excess of one million dollars ($1,000,000), other than sales of inventory and other assets (other than Owned Real Property or Leased Real Property) in the ordinary course of business;
(viii) (A) incur any indebtedness for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any debt securities Organizational Documents of the Company or any of its SubsidiariesSubsidiary;
(b) undertake any expenditure, guarantee any such indebtedness transaction or commitment exceeding $25,000 individually or $50,000 in the aggregate or any debt securities commitment or transaction of another person the type described in Section 2.17(a)(vi) hereof;
(c) pay, discharge, waive or enter into satisfy any “keep well” claim, liability, right or other agreement to maintain any financial statement condition of another person obligation (collectivelyabsolute, “Indebtedness”accrued, asserted or unasserted, contingent or otherwise), other than (1) Indebtedness incurredthe payment, assumed discharge or otherwise entered into satisfaction in the ordinary course of business of liabilities reflected or reserved against in the Balance Sheet;
(d) adopt or change accounting methods or practices (including any borrowings under the Company’s existing credit facilities and in respect of letters of credit) for additional amounts after the date hereof not in excess of five million dollars ($5,000,000) in the aggregate and (2) Indebtedness incurred in connection with the refinancing of any Indebtedness existing on the date of this Agreement or permitted to be incurred, assumed or otherwise entered into hereunder; or (B) make any loans or capital contributions to, or investments in, any other person;
(ix) make any capital expenditures, other than in accordance with the Company’s capital expenditures plan as set forth on Section 5.01(a) of the Company Disclosure Schedule;
(x) settle any (A) material claim or material litigation, in each case made or pending against the Company or any of its Subsidiaries, other than any payment, discharge, settlement or satisfaction where no non-monetary obligations are imposed on the Company or its Subsidiaries or would apply to Parent or its Subsidiaries and where the amounts paid or to be paid (i) are covered by insurance coverage maintained by the Company or (ii) in an amount less than one million dollars ($1,000,000), individually, and five million dollars ($5,000,000), in the aggregate or (B) any investigation by any Governmental Entity by agreeing to a material fine or penalty or non-monetary obligations;
(xi) except as required pursuant to the terms of any Company Benefit Plan or other written agreement, in each case, in effect on the date of this Agreement, (1) grant to any officer, director or employee of the Company or any of its Subsidiaries any increase in compensation (other than increases in the ordinary course of business that are not material for employees who are not executive officers of the Company or any of its Subsidiaries), (2) grant to any officer, director or employee of the Company or any of its Subsidiaries any change in control, severance, retention depreciation or termination compensation amortization policies or benefits, or any increase in change in control, retention, severance or termination compensation or benefits, (3rates) enter into any employment, consulting, severance, termination, retention or change in control agreement with any officer, director or employee of the Company or any of its Subsidiaries, (4) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or any plan, agreement or arrangement which, if in effect on the date of the Agreement, would constitute a Company Benefit Plan or (5) accelerate any rights or benefits, or make any material determinations, under any Company Benefit Plan; provided, however, that the foregoing clauses (1), (2), and (3) shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees or sales representatives or to employees or sales representatives in the context of promotions based on job performance or workplace requirements, in each case in the ordinary course of business, or pursuant to existing plans, agreements, benefits and compensation arrangements and incentive grants (excluding any plans, agreements, arrangements or grants pursuant to which compensation or benefits are payable based wholly or partially on the occurrence of a change in control) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees or sales representatives in similar positions;
(xii) make any material change in accounting methods, principles or practices affecting the consolidated assets, liabilities or results of operations of the Company, other than as required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including Regulation S-X under the Securities ActGAAP;
(xiiie) except as consistent with past practice, make or change any material Tax election, file any amended Tax Return with respect to any material Tax, adopt or change any annual Tax accounting period, settle or compromise any material Tax auditmethod, enter into any material closing Tax agreement, surrender settle any right to Tax claim a material refund of Taxes or assessment, consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating or file any material Tax Return unless a copy of such Tax Return has been delivered to the Company or Parent for review a reasonable time prior to filing and Parent has approved such Tax Return;
(f) revalue any of its Subsidiariesassets (whether tangible or intangible), including writing down the value of inventory or writing off notes or accounts receivable;
(xivg) except as required pursuant to this Agreement declare, set aside, or the terms of the applicable agreement covering the indebtedness to be repaid to which the Company or any Subsidiary is a party as in effect as of the date hereof, pre-pay any long-term debt dividends on or make any other distributions (which shall be deemed to include pre-payments or repayments of lines of credit facilities whether in cash, stock or other similar lines of credit or payments made property) in respect of any termination Company Capital Stock or settlement Subsidiary Equity Interests, or split, combine or reclassify any Company Capital Stock or Subsidiary Equity Interests, or issue or authorize the issuance of any interest rate swap other securities in respect of, in lieu of or in substitution for shares of Company Capital Stock or Subsidiary Equity Interests, or directly or indirectly repurchase, redeem or otherwise acquire any shares of Company Capital Stock or Subsidiary Equity Interests (or options, warrants or other similar hedging instrument relating thereto rights convertible into, exercisable or exchangeable for Company Capital Stock or Subsidiary Equity Interests);
(h) increase or otherwise change the salary or other than currency compensation payable or commodity swaps to become payable to any officer, director, employee, consultant or hedging instruments entered into advisor, or make any declaration, payment or commitment or obligation of any kind for the payment (whether in cash, equity or other property) of a severance payment, change of control payment, termination payment, bonus or other additional salary or compensation to any such person;
(i) sell, lease, license or otherwise dispose of or grant any security interest in any of its properties or assets, including the sale of any accounts receivable of the Company, except properties or assets (whether tangible or intangible) which are not Intellectual Property and only in the ordinary course of business as and consistent with past practice;
(j) make any loan to any Person or purchase debt securities of any Person or amend the terms of any outstanding loan agreement, except for advances to employees for travel and business expenses in the ordinary course of business consistent with past practices;
(k) incur any indebtedness for borrowed money, amend the terms of any outstanding loan agreement, guarantee any indebtedness for borrowed money of any Person, issue or sell any debt securities or guarantee any debt securities of any Person;
(l) waive or release any right or claim of the Company or any Subsidiary, including any write-off or other compromise of any account receivable of the Company or any Subsidiary;
(m) commence or settle any lawsuit, threat of any lawsuit or proceeding or other investigation by or against the Company or any Subsidiary or relating to any of its businesses, properties or assets;
(n) issue, grant, deliver or sell or authorize or propose or contract for the issuance, grant, delivery or sale of, or purchase or propose or contract for the purchase of, any Company Capital Stock or Subsidiary Equity Interests or any securities convertible into, exercisable or exchangeable for, or subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating any of them to issue or purchase any such shares or other convertible securities, except for the issuance of Company Capital Stock pursuant to the conversion of Company Preferred Stock;
(o) (i) sell, lease, license or transfer to any Person any rights to any Intellectual Property or enter into any agreement or modify or amend any existing agreement with respect to any Intellectual Property with any Person or with respect to any Intellectual Property of any Person except in the ordinary course of business consistent with past practice, (ii) purchase or license any Intellectual Property or enter into any agreement or modify or amend any existing agreement with respect to the Intellectual Property of any Person, or (iii) enter into any agreement or modify or amend any existing agreement with respect to the development of any Intellectual Property with a third party;
(p) enter into any agreement to purchase or sell any interest in real property, grant any security interest in any real property, enter into any lease, sublease, license or other occupancy agreement with respect to any real property or alter, amend, modify or terminate any of the terms of any Real Property Lease or Facilities Lease, or waive any term or condition thereof or grant any consents thereunder;
(q) grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge affecting any real property or any part thereof; commit any waste or nuisance on any such property; or make any material changes in the construction or condition of any such property;
(r) terminate, amend or otherwise modify (or agree to do so), or violate the terms of, any of the Contracts set forth or described in Section 5.01(a) of the Company Disclosure Schedule);
(xvs) amendacquire or agree to acquire by merging or consolidating with, modifyor by purchasing any assets or equity securities of, cancelor by any other manner, terminate any business or waive any corporation, partnership, association or release other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material right under or any Company Material Contract or enter into any new contract, agreement or arrangement that, if entered into prior to the date of this Agreement, would be a Company Material Contract, where such action or omission would or would reasonably be expectedequity securities, individually or in the aggregate, to (A) have a Material Adverse Effect, (B) impair in any material respect the ability of the Company or its Subsidiaries to perform its obligations under this Agreement, (C) prevent or materially impede, interfere with, hinder or delay the consummation of any of the transactions contemplated by this Agreement or (D) impair in any material respect the ability of the Company and its Subsidiaries to conduct their business as currently conducted;
(xvi) create any subsidiary of the Company or otherwise alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiaries;
(xvii) renew or enter into any noncompete or material exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries or, after the Share Acceptance Date, Parent or its SubsidiariesSubsidiary;
(xviiit) grant any severance, change of control or termination pay (whether payable in cash, equity or otherwise) to any current or former employee, consultant or director except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent, or adopt any new severance plan, or amend or modify or alter in any respect any severance plan, agreement or arrangement existing on the date hereof;
(u) adopt, amend or terminate any agreement with any current or former employee, consultant or director, employee benefit plan, policy or arrangement, or employee stock purchase or stock option plan, or enter into any material transaction with any of its Affiliates employment contract (other than offer letters and letter agreements entered into, in the Company ordinary course of business and its Subsidiaries) other than pursuant to written arrangements in effect on the date consistent with past practice, with newly hired employees who are terminable “at will” and who are not officers of this Agreement and excluding any employment, compensation or similar arrangements otherwise permitted pursuant to this Section 5.01(a);
(xix) transfer or make available to a third party any material research materials or material Intellectual Property, or transfer or make available to any third party any Pharmaceutical Product or product candidate owned by the Company or any Subsidiary and which letters and agreements do not provide for any severance benefits) or collective bargaining agreement, pay any special bonus or special remuneration (whether payable in cash, equity or otherwise) to any employee, consultant or director, or increase the salaries or wage rates or fringe benefits (whether payable in cash, equity or otherwise) (including rights to severance or indemnification) of the Company any of its employees, consultants or being studied in a Company or Subsidiary research programdirectors, except pursuant to agreements outstanding on the date hereof that have been previously disclosed in writing to Parent;
(Av) as send any written communications (including electronic communications) to its employees regarding this Agreement or the transactions contemplated hereby;
(w) make any representations or issue any communications to employees that are inconsistent with this Agreement or the transactions contemplated thereby, including any representations regarding offers of employment from Parent;
(x) enter into any strategic alliance, affiliate agreement or joint marketing arrangement or agreement;
(y) enter into or amend any Contract that contains the provisions set forth in Section 5.01(a) of the Company Disclosure Schedule or (B) pursuant to any applicable written agreement in the ordinary course of business2.17(a)(xv)-(xviii);
(xxz) take waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock or any other equity or similar incentive awards (or omit to take) including without limitation any action that adversely affects in any material respectlong term incentive awards), or would reasonably be expected reprice stock options (through amendment, exchange or otherwise) or authorize cash payments or new equity awards in exchange for any stock options, other than as provided by this Agreement;
(aa) hire, offer to adversely effect in hire or terminate any material respect, employee or encourage or otherwise cause any material patent or patent application, or abandon or permit employee to lapse any right to any material patent or patent application, in each case, of resign from the Company or any Subsidiary;
(bb) promote, demote, terminate or otherwise change the employment status or titles of any employee;
(cc) alter, or enter into any commitment to alter, its Subsidiariesinterest in any corporation, association, joint venture, partnership or business entity in which the Company or any Subsidiary directly or indirectly holds any interest;
(dd) cancel, amend or renew any insurance policy; or
(xxiee) authorize any oftake, commit, or commit agree in writing or agree otherwise to take take, any ofof the actions described in Sections 5.1(a) through 5.1(dd) hereof, or any other action that would (i) prevent the foregoing actionsCompany or any Subsidiary from performing, or cause the Company or any Subsidiary not to perform, its covenants or agreements hereunder or (ii) cause or result in any of its respective representations and warranties contained herein being untrue or incorrect or (iii) cause the Company’s Final Working Capital Balance to not be positive or to cause the Target Company Debt to be exceeded.
Appears in 1 contract
Conduct of Business of the Company and its Subsidiaries. (a) Except as set forth in Section 5.01(a) of the Company Disclosure Schedule, expressly contemplated by this Agreement, required by Law or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date hereof until such time as Purchaser's designees shall constitute a majority of this Agreement to the Effective TimeBoard, the Company shall, and the Company shall cause each of its Subsidiaries to, carry on :
(i) conduct its business only in the ordinary course andconsistent with past practice in all material respects; (ii) use commercially reasonable efforts to preserve, to maintain, and protect its assets and the extent consistent therewith, business of the Company and each of its Subsidiaries; (iii) use commercially reasonable best efforts to preserve substantially intact the business organization of the business of the Company and each of its current business organizationsSubsidiaries, to keep available the services of the employees of its current officers and employees business, and to preserve its maintain existing relationships with significant customers, suppliers, licensors, licensees, suppliers, contractors, distributors, lessors customers, and others having significant business dealings relationships with it. its business; and (iv) comply in all material respects with all applicable laws, including all applicable federal and state securities laws, rules and regulations and including, without limitation, the timely filing of all periodic reports with the SEC required to be filed pursuant to the Exchange Act.
(b) Without limiting the generality of the foregoing, and except as set forth otherwise expressly provided in Section 5.01(a) of the Company Disclosure Schedule, contemplated by this Agreement, required prior to the time persons designated or elected by Law (including, as applicable, Section 409A Purchaser or any of its affiliates shall constitute a majority of the Code) or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective TimeBoard, the Company shall Board will not, and shall not without the prior written consent of Purchaser, permit the Company or any of its Subsidiaries to:
(i) declare, set aside amend or pay any dividends on, propose to amend its certificate of incorporation or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock, other than dividends or distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent and other than as required pursuant to the Rights Agreementby-laws;
(ii) splitauthorize for issuance, combine issue, sell, deliver, or reclassify agree or commit to issue, sell or deliver, dispose of, encumber or pledge any of its capital stock or issue or authorize the issuance of any other securities in lieu of or in substitution for shares of its capital stock;
(iii) class, options, warrants, commitments, subscriptions, rights to purchase, redeem or otherwise acquire any shares of its capital stock or any appreciation rights, warrants restricted stock, performance units, stock equivalents or options to acquire any such sharesother securities, other than (A) the acquisition except as required by the Company of shares of Company Common Stock in connection agreements with the surrender of shares of Company's employees or Company Common Stock by holders of Company Stock Options Plans, in order to pay the exercise price of the Company Stock Options or as required pursuant to the terms of the ESPP, (B) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Incentive Plans and (C) the acquisition by the Company of Company Stock Options, Company Restricted Stock Units and shares of Company Restricted Stock in accordance with their terms either case in effect as of the date of this Agreement in connection with Agreement, or amend any of the forfeiture terms of any such awardssecurities or agreements outstanding as of the date of this Agreement;
(iviii) issuesplit, deliver combine or sell reclassify any shares of its capital stock, declare, set aside or pay any dividend or other voting distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock other than as set forth in SECTION 6.1 of the Schedule, or redeem or otherwise acquire any of its securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, other than of its Subsidiaries;
(iv) (A) upon incur or assume any long-term or short-term Indebtedness or issue any debt securities except for borrowings under existing lines of credit in the exercise ordinary course of business and in amounts not material to the Company Stock Options and rights under its Subsidiaries taken as a whole; (B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the ESPP outstanding obligations of any other person except in the ordinary course of business consistent with past practice and in amounts not material to the Company and its Subsidiaries, taken as a whole, and except for obligations of wholly owned Subsidiaries of the Company to the Company or to other wholly owned Subsidiaries of the Company; (C) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in the ordinary course of business consistent with past practice and in amounts not material to the maker of such loan or advance) or make any change in its existing borrowing or lending arrangements for or on behalf of any such person, whether pursuant to an employee benefit plan or otherwise; (D) pledge or otherwise encumber shares of capital stock of the date Company or any of its Subsidiaries; or (E) mortgage or pledge any of its material assets, tangible or intangible, or create or suffer to exist any material Lien thereupon;
(v) except as set forth on SECTION 6.1(B)(V) of the Schedule with respect to certain proposed reorganizations of Holdings BF, S.A. and Bolle Asia, Ltd., which restructuring shall be subject to Purchaser's prior written consent, adopt a plan of complete or partial liquidation or adopt resolutions providing for the complete or partial liquidation, dissolution, consolidation, merger, restructuring or recapitalization of the Company or any of its Subsidiaries;
(vi) (A) except as may be required by law or as contemplated by this Agreement, in each case in accordance with their present terms, (B) upon the vesting of Company Restricted Stock Units outstanding on the date of this Agreement, in accordance with their present terms, (C) or as required to comply with under any agreement or Company Benefit Plan as in effect on the date of this Agreement, (D) upon enter into, adopt or pay, agree to pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to, or amend or terminate any bonus, profit sharing, compensation, severance, termination, pension, retirement, deferred compensation, employment, severance, welfare, insurance or other employee benefit agreement, trust, plan, fund or other arrangement for the conversion of the Convertible Notes outstanding on the date of this Agreement, in accordance with their present terms and (E) the issuance of Rights and the issuance of Company Common Stock benefit or Preferred Stock of the Company upon the exercise of Rights, in each case, pursuant to the terms and conditions of the Rights Agreement;
(v) amend the Company Certificate of Incorporation or the Company Bylaws or the comparable organizational documents welfare of any Subsidiary director, officer or employee in any manner; or (B) except for normal increases in the ordinary course of the Company;
(vi) merge or consolidate withbusiness consistent with past practice that, or purchase an equity interest in or a substantial portion of the assets of, any person or any division or business thereof other than purchases of assets where the amount of the consideration paid or transferred by the Company and its Subsidiaries in connection with all such transactions does not exceed one million dollars ($1,000,000) in the aggregate, do not result in a material increase in benefits or compensation expense to the Company or its Subsidiaries, and as required under existing agreements or in the ordinary course of business consistent with past practice, increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any plan and arrangement as in effect as of the date hereof (including, without limitation, the granting of stock appreciation rights or performance units);
(vii) assignacquire, sublease, terminate, waive any material rights under, or materially amend any Lease, or sell, lease transfer, lease, encumber or otherwise dispose of any assets outside the ordinary course of business or any assets which in the aggregate are material to the Company and its Subsidiaries, taken as a whole, or enter into any commitment or transaction outside the ordinary course of business consistent with past practice which would be material to the Company and its Subsidiaries, taken as a whole;
(viii) except as may be required as a result of a change in law or in GAAP, change any of the accounting principles or practices used by it;
(ix) revalue in any material respect any of its properties assets, including, without limitation, writing down the value of inventory or assets with an aggregate value in excess of one million dollars ($1,000,000), writing-off notes or accounts receivable other than sales of inventory and other assets (other than Owned Real Property or Leased Real Property) in the ordinary course of business;
(viii) (A) incur acquire (by merger, consolidation, or acquisition of stock or assets) any indebtedness for borrowed moneycorporation, issue or sell any debt securities or warrants partnership or other rights business organization or division thereof or any equity interest therein; (B) enter into any contract or agreement other than in the ordinary course of business consistent with past practice which would be material to acquire the Company and its Subsidiaries, taken as a whole; (C) authorize any debt securities new capital expenditure or expenditures which, individually, is in excess of $50,000 or, in the aggregate, are in excess of $200,000; or (D) enter into or amend any contract, agreement, commitment or arrangement (including any Material Contract) providing for the taking of any action that would be prohibited hereunder;
(xi) make any tax election (unless required by law) or settle or compromise any income tax liability of the Company or any of its Subsidiaries, guarantee except if such action is taken in the ordinary course of business, and, in any such indebtedness event, the Company shall consult with Purchaser before filing or causing to be filed any debt securities tax return of another person the Company or enter into its Subsidiaries or before executing or causing to be executed any “keep well” agreement or other agreement to maintain waiver extending the period for assessment or collection of any financial statement condition taxes of another person the Company or its Subsidiaries;
(collectivelyxii) pay, “Indebtedness”discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than (1) Indebtedness incurredthe payment, assumed discharge or otherwise entered into satisfaction in the ordinary course of business (including any borrowings under the Company’s existing credit facilities and in respect of letters of credit) for additional amounts after the date hereof not in excess of five million dollars ($5,000,000) in the aggregate and (2) Indebtedness incurred in connection with the refinancing of any Indebtedness existing on the date of this Agreement liabilities reflected or permitted to be incurred, assumed or otherwise entered into hereunder; or (B) make any loans or capital contributions toreserved against in, or investments incontemplated by, any other person;
the consolidated financial statements (ix) make any capital expenditures, other than in accordance with or the Company’s capital expenditures plan as set forth on Section 5.01(anotes thereto) of the Company Disclosure Scheduleand its Subsidiaries or incurred in the ordinary course of business consistent with past practice;
(xxiii) settle permit any (A) material claim or material litigation, in each case made or pending against the Company or any of its Subsidiaries, other than any payment, discharge, settlement or satisfaction where no non-monetary obligations are imposed on the Company or its Subsidiaries or would apply to Parent or its Subsidiaries and where the amounts paid or to be paid (i) are covered by insurance coverage maintained by the Company or (ii) in an amount less than one million dollars ($1,000,000), individually, and five million dollars ($5,000,000), in the aggregate or (B) any investigation by any Governmental Entity by agreeing to a material fine or penalty or non-monetary obligations;
(xi) except as required pursuant to the terms of any Company Benefit Plan or other written agreement, in each case, in effect on the date of this Agreement, (1) grant to any officer, director or employee of policy naming the Company or any of its Subsidiaries any increase in compensation (other than increases as a beneficiary or a loss payable payee to be canceled or terminated without notice to Purchaser except in the ordinary course of business that are not material for employees who are not executive officers of and consistent with past practice unless the Company or any of its Subsidiaries), (2) grant to any officer, director or employee of the Company or any of its Subsidiaries any change in control, severance, retention or termination compensation or benefits, or any increase in change in control, retention, severance or termination compensation or benefits, (3) enter into any employment, consulting, severance, termination, retention or change in control agreement with any officer, director or employee of the Company or any of its Subsidiaries, (4) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or any plan, agreement or arrangement which, if in effect on the date of the Agreement, would constitute such Subsidiary shall have obtained a Company Benefit Plan or (5) accelerate any rights or benefits, or make any material determinations, under any Company Benefit Plan; provided, however, that the foregoing clauses (1), (2), and (3) shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees or sales representatives or to employees or sales representatives in the context of promotions based on job performance or workplace requirements, in each case in the ordinary course of business, or pursuant to existing plans, agreements, benefits and compensation arrangements and incentive grants (excluding any plans, agreements, arrangements or grants pursuant to which compensation or benefits are payable based wholly or partially on the occurrence of a change in control) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees or sales representatives in similar positions;
(xii) make any material change in accounting methods, principles or practices affecting the consolidated assets, liabilities or results of operations of the Company, other than as required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including Regulation S-X under the Securities Act;
(xiii) except as consistent with past practice, make any material Tax election, file any amended Tax Return with respect to any material Tax, change any annual Tax accounting period, settle or compromise any material Tax audit, enter into any material closing agreement, surrender any right to claim a material refund of Taxes or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiariescomparable replacement policy;
(xiv) except as required pursuant settle or compromise any pending or threatened suit, action or claim relating to this Agreement or the terms of the applicable agreement covering the indebtedness to be repaid to which the Company or any Subsidiary is a party as in effect as of the date hereof, pre-pay any long-term debt (which shall be deemed to include pre-payments or repayments of lines of credit facilities or other similar lines of credit or payments made in respect of any termination or settlement of any interest rate swap or other similar hedging instrument relating thereto other than currency or commodity swaps or hedging instruments entered into in the ordinary course of business as described in Section 5.01(a) of the Company Disclosure Schedule)Transactions;
(xv) amend, modify, cancel, terminate or waive or release any material right under any Company Material Contract or enter into any new contract, agreement or arrangement that, if entered into prior to the date of this Agreement, would be a Company Material Contract, where such action or omission would or would reasonably be expected, individually or in the aggregate, to (A) have a Material Adverse Effect, (B) impair change in any material respect any existing Material Contract relating to the ability business of the Company or its Subsidiaries to perform its obligations under this AgreementSubsidiaries, (C) prevent or materially impede, interfere with, hinder or delay other than in the consummation ordinary course of any of the transactions contemplated by this Agreement or (D) impair in any material respect the ability of the Company and its Subsidiaries to conduct their business as currently conductedconsistent with past practice;
(xvi) create waive, release, grant, or transfer any subsidiary rights of material value relating to the business of the Company or otherwise alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiaries;
(xvii) renew or enter into any noncompete or material exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries or, after the Share Acceptance Date, Parent or its Subsidiaries;
(xviii) enter into any material transaction with any of its Affiliates (, other than the Company and its Subsidiaries) other than pursuant to written arrangements in effect on the date of this Agreement and excluding any employment, compensation or similar arrangements otherwise permitted pursuant to this Section 5.01(a);
(xix) transfer or make available to a third party any material research materials or material Intellectual Property, or transfer or make available to any third party any Pharmaceutical Product or product candidate owned by the Company or any Subsidiary of the Company or being studied in a Company or Subsidiary research program, except (A) as set forth in Section 5.01(a) of the Company Disclosure Schedule or (B) pursuant to any applicable written agreement in the ordinary course of business;
(xx) take (or omit to take) any action that adversely affects in any material respect, or would reasonably be expected to adversely effect in any material respect, any material patent or patent application, or abandon or permit to lapse any right to any material patent or patent application, in each case, of the Company or any of its Subsidiariesbusiness consistent with past practice; or
(xxixvii) authorize any oftake, or commit agree in writing or agree otherwise to take take, any ofof the actions described in SECTIONS 6.1(B)(I) through 6.1(B)(XVI) or any action which would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect as of the date when made or would result in any of the Offer Conditions set forth in Annex A not being satisfied.
(c) Until Purchaser's designees constitute a majority of the Board, the foregoing actionsCompany will deliver to Purchaser accurate and complete copies of all documents filed with the SEC or any exchange on which the Shares are listed for trading.
Appears in 1 contract
Samples: Merger Agreement (Bolle Inc)
Conduct of Business of the Company and its Subsidiaries. (a) Except as set forth in Section 5.01(a) of the Company Disclosure Schedule, contemplated by this Agreement, required by Law or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during During the period from the date of this Agreement to and continuing until the earlier of the termination of this Agreement and the Effective Time, (x) except to the extent that Parent shall otherwise consent in writing, such consent not to be unreasonably withheld or delayed, the Company shall, and shall cause each of its Subsidiaries to, carry on its business in the usual, regular and ordinary course andin substantially the same manner as heretofore conducted, to the extent pay its debts and Taxes when due, to pay or perform other obligations when due, and to use all commercially reasonable efforts consistent therewith, use reasonable best efforts with past practice and policies to preserve substantially intact its current present business organizationsorganization, to keep available the services of its current present officers and key employees and to preserve its their relationships with significant customers, suppliers, distributors, licensors, licensees, distributors, lessors and others having significant business dealings with it. Without limiting , all with the generality goal of preserving unimpaired its goodwill and ongoing businesses at the foregoing, Effective Time and (y) except as set forth in Section 5.01(a) of the Company Disclosure Schedule, expressly contemplated by this Agreement, required by Law (including, as applicable, Section 409A of the Code) or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any cause each of its Subsidiaries toto not, without the prior written consent of Parent, such consent not to be unreasonably withheld or delayed:
(ia) declareRe-price or amend the terms of any Company Stock Right, set aside including accelerating the vesting thereof;
(b) Terminate, amend any term or pay provision of, grant any dividends onadditional awards under, or make change any other distributions allocations under the Transaction Bonus Plan;
(whether in cashc) Terminate, stock amend, modify, waive or property) in respect of, release any term or provision of its capital stock, other than dividends any Vesting Continuation Agreement or distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent and other than as required pursuant to the Rights Option Reset Agreement;
(iid) splitEnter into any Contract, combine make any payments (other than pursuant to and as required by the terms of existing Contracts) or reclassify enter into any commitment or transaction, in each case other than in the ordinary course of its capital stock business and other than any such Contract, payment or issue commitment individually having an aggregate value, cost or authorize the issuance amount not in excess of any other securities in lieu of or in substitution for shares of its capital stock$50,000;
(iiie) purchaseIssue, redeem or otherwise acquire any shares of its capital stock or any rights, warrants or options to acquire any such shares, other than (A) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of the Company Stock Options or as required pursuant to the terms of the ESPP, (B) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Incentive Plans and (C) the acquisition by the Company of Company Stock Options, Company Restricted Stock Units and shares of Company Restricted Stock in accordance with their terms in effect as of the date of this Agreement in connection with the forfeiture of such awards;
(iv) issuegrant, deliver or sell any shares of its capital stocksell, or authorize or propose the issuance, grant, delivery or sale of, or purchase or propose the purchase of, any other voting securities Company Capital Stock or any Subsidiary Securities or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating it to issue any such shares, voting shares or other convertible securities or convertible securities, or any “phantom” stock, “phantom” (except for (w) stock rights, stock appreciation rights options or stock based performance units, other than (A) upon awards that do not include any provisions relating to acceleration of vesting that are granted or awarded pursuant to the exercise of Company Stock Options and rights under the ESPP outstanding on Option Plan after the date hereof in the ordinary course of this Agreementbusiness to newly hired Employees or newly engaged consultants or independent contractors, in each case in accordance with their present terms, (B) upon provided that any such Employees have executed and delivered to the vesting of Company Restricted Stock Units outstanding on the date of this Agreement, in accordance with their present terms, (C) as required to comply with any Company Benefit Plan as in effect on the date of this an Option Reset Agreement, (Dx) upon the conversion of the Convertible Notes outstanding on the date of this Agreement, in accordance with their present terms and (E) the issuance of Rights and the issuance of Company Common Stock upon conversion of any presently outstanding shares of Company Preferred Stock, (y) the issuance of Company Common Stock upon exercise of presently outstanding vested Company Stock Rights or Preferred (z) the issuance of Company Stock Rights pursuant to Contracts set forth on Schedule 3.3(b); provided, that (i) the Company timely pays in cash all Taxes required to be withheld and paid in connection with any such grant, issuance, exercise or conversion, (ii) the amount of such Taxes is contributed to the Company in cash or check by the Person granted, exercising or converting such Company Stock Right, (iii) for purposes of determining the amount of such Taxes, the fair market value of the Company upon the exercise of Rights, in each case, Common Stock received pursuant to such exercise or conversion is deemed to be equal to the terms and conditions maximum aggregate consideration payable with respect to such Company Common Stock pursuant to this Agreement, including for this purpose any consideration to be deposited with the Escrow Agent as part of the Rights Escrow Amount, unless some other fair market value is agreed to in writing by Parent and the Company and (iv) the Company promptly notifies Parent of such grant, issuance, exercise or conversion);
(f) (i) Acquire or agree to acquire by merging or consolidating with, or by purchasing any material assets constituting all or substantially all of the business of or equity securities of, or by any other manner, any business or any Person, or (ii) otherwise acquire or agree to acquire any material assets outside of the ordinary course of business consistent with past practices;
(g) Hire or engage any Employees, independent contractors or consultants, or promote any current Employees or change the employment status or titles of any of the current Employees, or cause any reductions in force, except for the hiring, engagement or promotion of Employees, independent contractors or consultants in the ordinary course of business at compensation rates comparable to other current Employees, independent contractors or consultants at similar levels;
(h) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(vi) amend the Company Certificate of Incorporation or the Company Bylaws or the comparable organizational documents of Take any Subsidiary of the Company;
(vi) merge or consolidate with, or purchase an equity interest in or action that would reasonably be expected to cause a substantial portion of the assets of, any person or any division or business thereof other than purchases of assets where the amount of the consideration paid or transferred by the Company and its Subsidiaries in connection with all such transactions does not exceed one million dollars ($1,000,000) in the aggregate;
(vii) assign, sublease, terminate, waive any material rights under, or materially amend any Lease, or sell, lease or otherwise dispose breach of any of its properties or assets with an aggregate value the provisions of Section 3.9 (except the taking of any action described in excess of one million dollars ($1,000,000Sections 3.9(k), other than sales of inventory (m) and other assets (other than Owned Real Property or Leased Real Propertyn) in the ordinary course of business;
(viii) (A) incur any indebtedness for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any had such indebtedness or any debt securities of another person or enter into any “keep well” or other agreement to maintain any financial statement condition of another person (collectively, “Indebtedness”), other than (1) Indebtedness incurred, assumed or otherwise entered into in the ordinary course of business (including any borrowings under the Company’s existing credit facilities and in respect of letters of credit) for additional amounts action occurred after the date hereof not in excess of five million dollars ($5,000,000) in the aggregate Balance Sheet Date and (2) Indebtedness incurred in connection with the refinancing of any Indebtedness existing on the date of this Agreement or permitted to be incurred, assumed or otherwise entered into hereunder; or (B) make any loans or capital contributions to, or investments in, any other person;
(ix) make any capital expenditures, other than in accordance with the Company’s capital expenditures plan as set forth on Section 5.01(a) of the Company Disclosure Schedule;
(x) settle any (A) material claim or material litigation, in each case made or pending against the Company or any of its Subsidiaries, other than any payment, discharge, settlement or satisfaction where no non-monetary obligations are imposed on the Company or its Subsidiaries or would apply to Parent or its Subsidiaries and where the amounts paid or to be paid (i) are covered by insurance coverage maintained by the Company or (ii) in an amount less than one million dollars ($1,000,000), individually, and five million dollars ($5,000,000), in the aggregate or (B) any investigation by any Governmental Entity by agreeing to a material fine or penalty or non-monetary obligations;
(xi) except as required pursuant to the terms of any Company Benefit Plan or other written agreement, in each case, in effect on the date of this Agreement, (1) grant to any officer, director or employee of the Company or any of its Subsidiaries any increase in compensation (other than increases in the ordinary course of business that are not material for employees who are not executive officers of the Company or any of its Subsidiaries), (2) grant to any officer, director or employee of the Company or any of its Subsidiaries any change in control, severance, retention or termination compensation or benefits, or any increase in change in control, retention, severance or termination compensation or benefits, (3) enter into any employment, consulting, severance, termination, retention or change in control agreement with any officer, director or employee of the Company or any of its Subsidiaries, (4) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or any plan, agreement or arrangement which, if in effect on the date of the Agreement, would constitute a Company Benefit Plan or (5) accelerate any rights or benefits, or make any material determinations, under any Company Benefit Plan; provided, however, that the foregoing clauses (1), (2), and (3) shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees or sales representatives or to employees or sales representatives in the context of promotions based on job performance or workplace requirements, in each case in the ordinary course of business, or pursuant to existing plans, agreements, benefits and compensation arrangements and incentive grants (excluding any plans, agreements, arrangements or grants pursuant to which compensation or benefits are payable based wholly or partially on the occurrence of a change in control) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees or sales representatives in similar positions;
(xii) make any material change in accounting methods, principles or practices affecting the consolidated assets, liabilities or results of operations of the Company, other than as required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including Regulation S-X under the Securities Act;
(xiii) except as consistent with past practice, make any material Tax election, file any amended Tax Return with respect to any material Tax, change any annual Tax accounting period, settle or compromise any material Tax audit, enter into any material closing agreement, surrender any right to claim a material refund of Taxes or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiaries;
(xiv) except as required pursuant to this Agreement or the terms of the applicable agreement covering the indebtedness to be repaid to which the Company or any Subsidiary is a party as in effect as of the date hereof, pre-pay any long-term debt (which shall be deemed to include pre-payments or repayments of lines of credit facilities or other similar lines of credit or payments made in respect of any termination or settlement of any interest rate swap or other similar hedging instrument relating thereto other than currency or commodity swaps or hedging instruments entered into in the ordinary course of business as described in Section 5.01(a) of the Company Disclosure Schedule);
(xv) amend, modify, cancel, terminate or waive or release any material right under any Company Material Contract or enter into any new contract, agreement or arrangement that, if entered into prior to the date of this Agreement, would be a Company Material Contract, where such action or omission would or would reasonably be expected, individually or in the aggregate, Agreement (without regard to (A) have a Material Adverse Effect, (B) impair in any material respect the ability of disclosures on the Company or its Subsidiaries to perform its obligations under this Agreement, (C) prevent or materially impede, interfere with, hinder or delay the consummation of any of the transactions contemplated by this Agreement or (D) impair in any material respect the ability of the Company and its Subsidiaries to conduct their business as currently conducted;
(xvi) create any subsidiary of the Company or otherwise alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiaries;
(xvii) renew or enter into any noncompete or material exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries or, after the Share Acceptance Date, Parent or its Subsidiaries;
(xviii) enter into any material transaction with any of its Affiliates (other than the Company and its Subsidiaries) other than pursuant to written arrangements in effect on the date of this Agreement and excluding any employment, compensation or similar arrangements otherwise permitted pursuant to this Section 5.01(aSchedules);
(xix) transfer or make available to a third party any material research materials or material Intellectual Property, or transfer or make available to any third party any Pharmaceutical Product or product candidate owned by the Company or any Subsidiary of the Company or being studied in a Company or Subsidiary research program, except (A) as set forth in Section 5.01(a) of the Company Disclosure Schedule or (B) pursuant to any applicable written agreement in the ordinary course of business;
(xx) take (or omit to take) any action that adversely affects in any material respect, or would reasonably be expected to adversely effect in any material respect, any material patent or patent application, or abandon or permit to lapse any right to any material patent or patent application, in each case, of the Company or any of its Subsidiaries; or
(xxij) authorize any ofTake, or commit agree in writing or agree otherwise to take take, any ofof the actions described in Sections 5.1(a) through (i) above, or any other action that would prevent the foregoing actionsCompany from performing or cause the Company not to perform its covenants hereunder.
Appears in 1 contract
Conduct of Business of the Company and its Subsidiaries. (a) Except as set forth in Section 5.01(a) of the The Company Disclosure Schedule, contemplated by this Agreement, required by Law or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed)covenants and agrees that, during the period from the date Agreement Date until the Director Appointment Date, except as expressly contemplated by this Agreement, as set forth in Section 5.01 of this Agreement to the Effective TimeCompany Disclosure Schedule or as required by Law, or unless Parent shall otherwise consent in writing, the business of the Company shall, and shall cause each of its Subsidiaries to, carry on its business shall be conducted in the ordinary course andof the Company's and its Subsidiaries' business, to and in compliance in all material respects with applicable Law and the extent consistent therewith, Company shall use its reasonable best efforts to preserve substantially intact its current and its Subsidiaries' business organizationsorganization, to keep available the services of its current officers and employees and to preserve its present relationships with significant customers, suppliers, licensorsemployees, licensees, distributorslicensors, lessors partners and others having other Persons with which it or any of its Subsidiaries has significant business dealings with itrelations. Without limiting the generality of the foregoing, between the Agreement Date and the Director Appointment Date, except as otherwise expressly contemplated by this Agreement, as set forth in Section 5.01(a) of 5.01 to the Company Disclosure Schedule, contemplated by this Agreement, Schedule or as required by Law (includingLaw, as applicable, Section 409A of the Code) or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective Time, neither the Company shall not, and shall not permit nor any of its Subsidiaries toshall without the prior written consent of Parent:
(i) amend or otherwise change the Company Certificate of Incorporation or Company Bylaws or any similar governing instruments or the comparable organizational documents of any Subsidiary of the Company;
(ii) issue, sell, transfer, pledge, redeem, accelerate rights under, dispose of or encumber, or authorize the issuance, sale, transfer, pledge, redemption, acceleration of rights under, disposition or encumbrance of, any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interest (including any phantom interest) in the Company or any of its Subsidiaries, except for the issuance of shares of Company Common Stock reserved for issuance on the Agreement Date pursuant to the exercise of Company Stock Options and the vesting of shares of Company Restricted Stock, in each case outstanding on the Agreement Date and in accordance with their present terms, the repurchase of shares in connection with the satisfaction of the Tax obligations of the holder of an award granted pursuant to a Company Stock Plan in connection with the exercise thereof (or any "net settlement" of a Company Stock Option) and the issuance of Company Common Stock reserved for issuance on the Agreement Date pursuant to, and in accordance with, the ESPP;
(iii) sell, pledge, mortgage, dispose of, lease or encumber any assets, tangible or intangible (including any Real Property), of the Company or any of its Subsidiaries or suffer to exist any Lien thereupon, other than (A) sales of assets not to exceed $250,000 in the aggregate and (B) encumbrances which are licenses of Intellectual Property of the types described in Section 5.01(a)(iv) or Section 5.01(a)(v), which licenses shall be subject to the provisions of such Sections;
(iv) with respect to Company Intellectual Property owned by the Company or any of its Subsidiaries and with respect to any rights to Company Intellectual Property granted under any Company Material Contract, (A) transfer, assign or license to any Person any rights to such Intellectual Property (except for licensing non-exclusive rights for the primary purpose of (1) conducting clinical research, entered into with a clinical research organization, (2) material transfer, sponsored research, or other similar matters, (3) establishing confidentiality or non-disclosure obligations, (4) conducting clinical trials, or (5) manufacturing, labeling or distribution of the Company's Pharmaceutical Products for clinical trials), (B) abandon, permit to lapse or otherwise dispose of any such Intellectual Property, (C) grant any Lien on any such Company Intellectual Property other than Permitted Liens, or (D) make any change in material Company Intellectual Property that is or would reasonably be expected to materially impair such Company Intellectual Property or the Company's or its Subsidiaries' rights with respect thereto.
(v) enter into or amend any agreements pursuant to which any other Person is granted an exclusive license to any patents or know how included in the Company Intellectual Property;
(vi) (A) declare, set aside aside, make or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock or propertyproperty or any combination thereof) in respect of, of any of its capital stock, other than dividends or distributions by except that a direct or indirect wholly owned Subsidiary of the Company may declare and pay a dividend to its parent and other than as required pursuant to the Rights Agreement;
parent, (iiB) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock;
, or (iiiC) purchase, repurchase, redeem or otherwise acquire acquire, directly or indirectly, or permit any shares Subsidiary to purchase, repurchase, redeem or otherwise acquire, any of its capital stock securities or any rightssecurities of its Subsidiaries, warrants or options any option, warrant or right, to acquire any such sharessecurities, other than or propose to do any of the foregoing;
(vii) (A) the (1) acquire (by merger, consolidation or acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of the Company Stock Options stock or as required pursuant to the terms of the ESPPassets or otherwise) any corporation, (B) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Incentive Plans and (C) the acquisition by the Company of Company Stock Options, Company Restricted Stock Units and shares of Company Restricted Stock in accordance with their terms in effect as of the date of this Agreement in connection with the forfeiture of such awards;
(iv) issue, deliver partnership or sell any shares of its capital stock, any other voting securities business organization or division thereof or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, other than (A) upon the exercise of Company Stock Options and rights under the ESPP outstanding on the date of this Agreement, in each case in accordance with their present terms, (B) upon the vesting of Company Restricted Stock Units outstanding on the date of this Agreement, in accordance with their present terms, (C) as required to comply with any Company Benefit Plan as in effect on the date of this Agreement, (D) upon the conversion of the Convertible Notes outstanding on the date of this Agreement, in accordance with their present terms and (E) the issuance of Rights and the issuance of Company Common Stock or Preferred Stock of the Company upon the exercise of Rightsequity interest therein, in each case, pursuant to the terms and conditions of the Rights Agreement;
(v) amend the Company Certificate of Incorporation or the Company Bylaws or the comparable organizational documents of any Subsidiary of the Company;
(vi) merge or consolidate with, or purchase an equity interest in or with a substantial portion of the assets of, any person or any division or business thereof other than purchases of assets where the amount of the consideration paid or transferred by the Company and its Subsidiaries in connection with all such transactions does not exceed one million dollars ($1,000,000) in the aggregate;
(vii) assign, sublease, terminate, waive any material rights under, or materially amend any Lease, or sell, lease or otherwise dispose of any of its properties or assets with an aggregate value in excess of one million dollars $250,000 in the aggregate ($1,000,000including the amount of any liabilities assumed in connection therewith), other than sales of inventory and other assets (other than Owned Real Property or Leased Real Property2) in the ordinary course enter into any new line of business;
, (viii3) make any capital contribution or investment in any joint venture or other Person, or (4) create any Subsidiaries; (B) (A1) incur any indebtedness for borrowed moneyor enter into any Contract for the incurrence of indebtedness (including any debenture, note, letter of credit or loan), or issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any such indebtedness or any debt securities of another person or enter into any “keep well” or other agreement to maintain any financial statement condition of another person Subsidiaries (collectively, “"Indebtedness”"), other than maintaining or replacing any letter of credit entered into in connection with the Real Property Leases or with equipment leases, or (12) incur any Indebtedness incurredfor or issue any debt securities or assume, assumed guarantee or endorse or otherwise entered as an accommodation become responsible for (whether directly, contingently or otherwise), the obligations of any Person (other than a wholly-owned Subsidiary); (C) enter into, renew, fail to renew, amend or terminate any lease relating to real property (including any existing Real Property Leases); (D) adopt or implement any new stockholder rights plan; (E) authorize any capital expenditures or purchase of fixed assets which are in excess of $300,000 for any individual expenditure or purchase or in excess of $1,000,000 in the aggregate for all such expenditures and purchases, for the Company and its Subsidiaries taken as a whole; or (F) enter into or amend any Contract, commitment or arrangement to effect any of the matters prohibited by this Section 5.01(a)(vii);
(viii) (A) increase the compensation payable or to become payable to its current or former directors, officers or employees, (B) hire any person as or promote any person to be an officer or an employee with a designation of "Vice President" or above, or elect any director of the Company, (C) hire or promote any employee who is not an officer or any employee with a designation below "Vice President," except to fill a vacancy in the ordinary course of business (including any borrowings under the Company’s existing credit facilities 's business, (D) make or forgive any loan or advance to employees or directors (other than making loans or advances pursuant to arrangements that were in effect on the Agreement Date and in respect of letters of credit) for additional amounts after the date hereof not in excess of five million dollars ($5,000,000) were made in the aggregate ordinary course of the Company's business and loans or advances of reasonable travel expenses in the ordinary course of the Company's business), (E) except as may be required by Law or by (1) existing written agreements or (2) Company Benefit Plans, (in the case of (1) and (2) Indebtedness incurred ), that have been disclosed in connection with the refinancing of any Indebtedness existing on the date of this Agreement or permitted to be incurred, assumed or otherwise entered into hereunder; or (B) make any loans or capital contributions to, or investments in, any other person;
(ix) make any capital expenditures, other than in accordance with the Company’s capital expenditures plan as set forth on Section 5.01(a5.1(m) of the Company Disclosure Schedule;
(x) settle any (A) material claim or material litigation, in each case made or pending against the Company or any of its Subsidiaries, other than any payment, discharge, settlement or satisfaction where no non-monetary obligations are imposed on the Company or its Subsidiaries or would apply to Parent or its Subsidiaries and where the amounts paid or to be paid (i) are covered by insurance coverage maintained by the Company or (ii) in an amount less than one million dollars ($1,000,000), individuallygrant any severance or termination pay to, and five million dollars ($5,000,000)or enter into, in the aggregate modify, amend, terminate or (B) any investigation by any Governmental Entity by agreeing adopt, or promise to a material fine enter into, modify, amend, terminate or penalty or non-monetary obligations;
(xi) except as required pursuant to the terms of adopt, any Company Benefit Plan or other written plan, Contract, agreement or arrangement that would be a Company Benefit Plan, (F) establish, adopt, enter into or amend any collective bargaining agreement, in each casecompensation plan, in effect on program or other plan, agreement, trust, fund, policy or arrangement for the date benefit of this Agreementany current or former directors, officers or employees of the Company, any of its Subsidiaries or any Controlled Group Members, except as may be necessary to maintain proper qualification under the Code or other Law, (1G) grant pay any discretionary bonuses to any officer, director or employee of the Company, (H) make any awards of equity in the Company or any of its Subsidiaries any increase in compensation (other than increases in the ordinary course of business that are not material for employees who are not executive officers of the Company or any of its Subsidiaries), (2) grant rights to any officer, director or employee of the Company or any of its Subsidiaries any change receive equity in control, severance, retention or termination compensation or benefits, or any increase in change in control, retention, severance or termination compensation or benefits, (3) enter into any employment, consulting, severance, termination, retention or change in control agreement with any officer, director or employee of the Company or any of its Subsidiaries, (4I) establish, adopt, amend any existing stock option or other equity-based compensation or enter into any agreement under which any stock option or amend other equity-based compensation would be required to be issued, except as permitted by Section 3.03, (J) except as set forth in writing by Parent for the express purpose of communications with employees of the Company, any material respect any collective bargaining agreement of its Subsidiaries or any planControlled Group Members, agreement make any representation or arrangement whichcommitment to, if in effect on the date or enter into any formal or informal understanding with any employee of the AgreementCompany, would constitute a Company Benefit Plan any of its Subsidiaries or any Controlled Group Members with respect to compensation, benefits, or terms of employment to be provided by Parent, Purchaser, or any of their Subsidiaries or any of the Controlled Group Members at or subsequent to the Closing, (5K) accelerate any rights or benefits, or make any material determinations, under any Company Benefit Plan; provided, howeveror (L) materially change any actuarial assumption or other assumption used to calculate funding obligations with respect to any pension or retirement plan, that or change the foregoing clauses manner in which contributions to any such plan are made or the basis on which such contributions are determined, except, in each case, as may be required by Law;
(1ix) take any action to change accounting policies or procedures (including procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable), change any material assumption underlying, or method of calculating, any bad debt contingency or other reserve, except in each case as required to conform to GAAP or applicable Law;
(2)x) make any material Tax election inconsistent with past practice, and change any material Tax election already made, settle or compromise any material Tax Liability (3) shall not restrict including for this purpose any Tax Liability attributable to a cost sharing arrangement of which the Company or any of its Subsidiaries from entering into or making available to newly hired employees or sales representatives or to employees or sales representatives in the context of promotions based on job performance or workplace requirements, in each case in the ordinary course of business, or pursuant to existing plans, agreements, benefits and compensation arrangements and incentive grants (excluding any plans, agreements, arrangements or grants pursuant to which compensation or benefits are payable based wholly or partially on the occurrence of Subsidiary is a change in control) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees or sales representatives in similar positions;
(xii) make any material change in accounting methods, principles or practices affecting the consolidated assets, liabilities or results of operations of the Company, other than as required (A) by GAAP (or any interpretation thereofparty), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including Regulation S-X under the Securities Act;
(xiii) except as consistent with past practice, make any material Tax election, file any amended Tax Return with respect to any material Tax, change any annual Tax accounting period, settle or compromise any material Tax audit, enter into any material closing agreement, surrender any right to claim a material refund of Taxes or consent to any extension or waiver of the limitation period applicable agreement relating to any material Tax claim or assessment relating (including for this purpose any Tax attributable to the Company or any a cost sharing arrangement of its Subsidiaries;
(xiv) except as required pursuant to this Agreement or the terms of the applicable agreement covering the indebtedness to be repaid to which the Company or any Subsidiary is a party as in effect as of the date hereofparty), pre-claim or surrender any right to claim a material Tax refund;
(xi) fail to pay any long-term debt (which shall be deemed to include pre-payments or repayments of lines of credit facilities or material accounts payable and other similar lines of credit or payments made in respect of any termination or settlement of any interest rate swap or other similar hedging instrument relating thereto other than currency or commodity swaps or hedging instruments entered into material obligations in the ordinary course of business as described the Company's and its Subsidiaries' business, other than those disputed in Section 5.01(a) of the Company Disclosure Schedule)good faith;
(xvxii) amendmaterially accelerate the collection of accounts receivable, modify, cancel, terminate or waive or release modify the payment terms of any material right under any Company Material Contract or enter into any new contract, agreement or arrangement that, if entered into prior to the date of this Agreement, would be a Company Material Contract, where such action or omission would or would reasonably be expected, individually or accounts receivable other than in the aggregate, to (A) have a Material Adverse Effect, (B) impair in any material respect the ability ordinary course of the Company or its Subsidiaries to perform its obligations under this Agreement, (C) prevent or materially impede, interfere with, hinder or delay the consummation of any of the transactions contemplated by this Agreement or (D) impair in any material respect the ability of the Company Company's and its Subsidiaries to conduct their business as currently conductedSubsidiaries' business, or sell, securitize, factor or otherwise transfer any accounts receivable or other rights;
(xvixiii) create any subsidiary adopt a plan of the Company complete or otherwise alter through partial liquidation, dissolution, merger, liquidationconsolidation, reorganizationrestructuring, restructuring recapitalization or in any other fashion the corporate structure or ownership of any Subsidiaries;
(xvii) renew or enter into any noncompete or material exclusivity agreement that would restrict or limit, in any material respect, the operations reorganization of the Company or any of its Subsidiaries or, after the Share Acceptance Date, Parent or its Subsidiaries;
(xviii) enter into any material transaction with any of its Affiliates Subsidiary (other than the Company and its Subsidiaries) other than pursuant to written arrangements Merger or as expressly provided in effect on the date of this Agreement and excluding any employment, compensation or similar arrangements otherwise permitted pursuant to this Section 5.01(aAgreement);
(xixxiv) transfer or make available to a third party at any material research materials or material Intellectual Propertytime within the 90-day period before the Effective Time, or transfer or make available to any third party any Pharmaceutical Product or product candidate owned by without complying fully with the Company notice and other requirements of the WARN Act or any Subsidiary of the Company comparable state or being studied in a Company or Subsidiary research programlocal law, except (A) effectuate a "plant closing" (as set forth in Section 5.01(a) of the Company Disclosure Schedule or (B) pursuant to any applicable written agreement defined in the ordinary course WARN Act or any comparable state or local law) affecting any single site of business;
(xx) take (employment or omit to take) one or more facilities or operating units within any action that adversely affects in any material respect, or would reasonably be expected to adversely effect in any material respect, any material patent or patent application, or abandon or permit to lapse any right to any material patent or patent application, in each case, single site of employment of the Company or any of its Subsidiaries; or(B) effectuate a "mass layoff" (as defined in the WARN Act or any comparable state or local law) at any single site of employment or one or more facilities or operating units within any single site of employment of the Company or any of its Subsidiaries or (C) otherwise terminate or lay off employees in such numbers as to give rise to material Liabilities under applicable Laws;
(xxixv) authorize any of(A) authorize, enter into, renew, extend, terminate or amend, or commit waive, release or agree assign any material rights or claims with respect to take (x) any of, the foregoing actions.Company Material Contract,
Appears in 1 contract
Conduct of Business of the Company and its Subsidiaries. (a) Except as set forth in Section 5.01(a) of the Company Disclosure Schedule, contemplated by this Agreement, required by Law or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during During the period from the date of this Agreement to and continuing until the earlier of the termination of this Agreement and the Effective Time, the Company shallagrees (except to the extent that Parent shall otherwise consent in writing) to, and shall to cause each of its Subsidiaries to, carry on its business in the usual, regular and ordinary course andin substantially the same manner as heretofore conducted, to the extent pay its debts and Taxes when due, to pay or perform other obligations when due, and to use all commercially reasonable efforts consistent therewith, use reasonable best efforts with past practice and policies to preserve substantially intact its current present business organizationsorganization, to keep available the services of its current present officers and key employees and to preserve its their relationships with significant customers, suppliers, distributors, licensors, licensees, distributors, lessors and others having significant business dealings with it, all with the goal of preserving unimpaired its goodwill and ongoing businesses at the Effective Time. Without limiting The Company shall promptly notify Parent of any materially negative event involving or adversely affecting the generality Company, any of the foregoing, except its Subsidiaries or their respective businesses. Except as set forth in Section 5.01(a) of the Company Disclosure Schedule, expressly contemplated by this Agreement, required by Law (including, as applicable, Section 409A of the Code) or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any cause each of its Subsidiaries toto not, without the prior written consent of Parent:
(ia) declareRe-price or amend the terms of any Company Options, set aside including accelerating the vesting of any Company Option;
(b) Terminate, amend any term or pay provision of, grant any dividends onadditional awards under, or make change any other distributions allocations under the RSU Plan;
(whether in cashc) Terminate, stock amend, waive or property) in respect of, release any term or provision of its capital stock, other than dividends or distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent and other than as required pursuant to the Rights any Vesting Continuation Agreement;
(iid) splitEnter into any Contract, combine make any payments or reclassify enter into any commitment or transaction, in each case other than in the ordinary course of its capital stock or issue or authorize the issuance of any other securities in lieu of or in substitution for shares of its capital stockbusiness consistent with past practices;
(iiie) purchaseIssue, redeem or otherwise acquire any shares of its capital stock or any rights, warrants or options to acquire any such shares, other than (A) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of the Company Stock Options or as required pursuant to the terms of the ESPP, (B) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Incentive Plans and (C) the acquisition by the Company of Company Stock Options, Company Restricted Stock Units and shares of Company Restricted Stock in accordance with their terms in effect as of the date of this Agreement in connection with the forfeiture of such awards;
(iv) issuegrant, deliver or sell any shares of its capital stocksell, or authorize or propose the issuance, grant, delivery or sale of, or purchase or propose the purchase of, any other voting securities Company Capital Stock or any Subsidiary Securities or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating it to issue any such shares, voting shares or other convertible securities or convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, other than (A) upon the exercise of Company Stock Options and rights under the ESPP outstanding on the date of this Agreement, in each case in accordance with their present terms, (B) upon the vesting of Company Restricted Stock Units outstanding on the date of this Agreement, in accordance with their present terms, (C) as required to comply with any Company Benefit Plan as in effect on the date of this Agreement, (D) upon the conversion of the Convertible Notes outstanding on the date of this Agreement, in accordance with their present terms and (E) the issuance of Rights and except for the issuance of Company Common Stock upon exercise of presently outstanding vested Company Options (subject to Section 6.13); provided, that (i) the Company timely pays in cash all Taxes required to be withheld and paid in connection with such exercise or Preferred Stock conversion, (ii) the amount of such Taxes is contributed to the Company in cash or check by the Person exercising or converting such Company Option, (iii) for purpose of determining the amount of such Taxes, the fair market value of the Company upon the exercise of Rights, in each case, Common Stock received pursuant to such exercise or conversion is equal to the terms and conditions maximum aggregate consideration payable with respect to such Company Common Stock pursuant to this Agreement, including for this purpose any consideration to be deposited with the Escrow Agent as part of the Rights AgreementEscrow Amount and (iv) the Company promptly notifies Parent of such exercise or conversion);
(vi) amend the Company Certificate of Incorporation Acquire or the Company Bylaws agree to acquire by merging or the comparable organizational documents of any Subsidiary of the Company;
(vi) merge or consolidate consolidating with, or purchase an by purchasing any assets or equity interest in or a substantial portion of the assets securities of, or by any person other manner, any business or any division Person, or business thereof other than purchases of assets where the amount of the consideration paid (ii) otherwise acquire or transferred by the Company and its Subsidiaries in connection with all such transactions does not exceed one million dollars ($1,000,000) in the aggregate;
(vii) assign, sublease, terminate, waive agree to acquire any material rights under, or materially amend any Lease, or sell, lease or otherwise dispose assets outside of any of its properties or assets with an aggregate value in excess of one million dollars ($1,000,000), other than sales of inventory and other assets (other than Owned Real Property or Leased Real Property) in the ordinary course of businessbusiness consistent with past practices;
(viiig) (A) incur Hire or engage any indebtedness for borrowed moneyEmployees, issue independent contractors or sell consultants, or promote any debt securities current Employees or warrants change the employment status or other rights to acquire titles of any debt securities of the Company current Employees, or cause any reductions in force, except for the hiring, engagement or promotion of its SubsidiariesEmployees, guarantee any such indebtedness independent contractors or any debt securities of another person or enter into any “keep well” or other agreement to maintain any financial statement condition of another person (collectively, “Indebtedness”), other than (1) Indebtedness incurred, assumed or otherwise entered into consultants in the ordinary course of business (including any borrowings under the Company’s existing credit facilities and in respect of letters of credit) for additional amounts after the date hereof not in excess of five million dollars ($5,000,000) in the aggregate and (2) Indebtedness incurred in connection consistent with the refinancing of any Indebtedness existing on the date of this Agreement past practices at compensation rates comparable to other current Employees, independent contractors or permitted to be incurred, assumed or otherwise entered into hereunder; or (B) make any loans or capital contributions to, or investments in, any other personconsultants at similar levels;
(ixh) make Engage in any capital expenditures, other than in accordance action with the Company’s capital expenditures plan as set forth on Section 5.01(a) of the Company Disclosure Schedule;
(x) settle any (A) material claim intent to directly or material litigation, in each case made or pending against the Company or any of its Subsidiaries, other than any payment, discharge, settlement or satisfaction where no non-monetary obligations are imposed on the Company or its Subsidiaries or would apply to Parent or its Subsidiaries and where the amounts paid or to be paid (i) are covered by insurance coverage maintained by the Company or (ii) in an amount less than one million dollars ($1,000,000), individually, and five million dollars ($5,000,000), in the aggregate or (B) any investigation by any Governmental Entity by agreeing to a material fine or penalty or non-monetary obligations;
(xi) except as required pursuant to the terms of any Company Benefit Plan or other written agreement, in each case, in effect on the date of this Agreement, (1) grant to any officer, director or employee of the Company or any of its Subsidiaries any increase in compensation (other than increases in the ordinary course of business that are not material for employees who are not executive officers of the Company or any of its Subsidiaries), (2) grant to any officer, director or employee of the Company or any of its Subsidiaries any change in control, severance, retention or termination compensation or benefits, or any increase in change in control, retention, severance or termination compensation or benefits, (3) enter into any employment, consulting, severance, termination, retention or change in control agreement with any officer, director or employee of the Company or any of its Subsidiaries, (4) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or any plan, agreement or arrangement which, if in effect on the date of the Agreement, would constitute a Company Benefit Plan or (5) accelerate any rights or benefits, or make any material determinations, under any Company Benefit Plan; provided, however, that the foregoing clauses (1), (2), and (3) shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees or sales representatives or to employees or sales representatives in the context of promotions based on job performance or workplace requirements, in each case in the ordinary course of business, or pursuant to existing plans, agreements, benefits and compensation arrangements and incentive grants (excluding any plans, agreements, arrangements or grants pursuant to which compensation or benefits are payable based wholly or partially on the occurrence of a change in control) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees or sales representatives in similar positions;
(xii) make any material change in accounting methods, principles or practices affecting the consolidated assets, liabilities or results of operations of the Company, other than as required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including Regulation S-X under the Securities Act;
(xiii) except as consistent with past practice, make any material Tax election, file any amended Tax Return with respect to any material Tax, change any annual Tax accounting period, settle or compromise any material Tax audit, enter into any material closing agreement, surrender any right to claim a material refund of Taxes or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiaries;
(xiv) except as required pursuant to this Agreement or the terms of the applicable agreement covering the indebtedness to be repaid to which the Company or any Subsidiary is a party as in effect as of the date hereof, pre-pay any long-term debt (which shall be deemed to include pre-payments or repayments of lines of credit facilities or other similar lines of credit or payments made in respect of any termination or settlement of any interest rate swap or other similar hedging instrument relating thereto other than currency or commodity swaps or hedging instruments entered into in the ordinary course of business as described in Section 5.01(a) of the Company Disclosure Schedule);
(xv) amend, modify, cancel, terminate or waive or release any material right under any Company Material Contract or enter into any new contract, agreement or arrangement that, if entered into prior to the date of this Agreement, would be a Company Material Contract, where such action or omission would or would reasonably be expected, individually or in the aggregate, to (A) have a Material Adverse Effect, (B) impair in any material respect the ability of the Company or its Subsidiaries to perform its obligations under this Agreement, (C) prevent or materially impede, interfere with, hinder or delay the consummation of indirectly adversely impact any of the transactions contemplated by this Agreement or (D) impair in any material respect the ability of the Company and its Subsidiaries to conduct their business as currently conductedAgreement;
(xvii) create Take any subsidiary action that would reasonably be expected to cause a breach of any of the Company or otherwise alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership provisions of any Subsidiaries;
(xvii) renew or enter into any noncompete or material exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries or, after the Share Acceptance Date, Parent or its Subsidiaries;
(xviii) enter into any material transaction with any of its Affiliates Section 3.9 (other than Sections 3.9(k), (m) and (n)) had such action occurred after the Company Balance Sheet Date and its Subsidiaries) other than pursuant prior to written arrangements in effect on the date of this Agreement and excluding any employment, compensation or similar arrangements otherwise permitted pursuant (without regard to this Section 5.01(a);
(xix) transfer or make available to a third party any material research materials or material Intellectual Property, or transfer or make available to any third party any Pharmaceutical Product or product candidate owned by disclosures on the Company or any Subsidiary of the Company or being studied in a Company or Subsidiary research program, except (A) as set forth in Section 5.01(a) of the Company Disclosure Schedule or (B) pursuant to any applicable written agreement in the ordinary course of business;
(xx) take (or omit to take) any action that adversely affects in any material respect, or would reasonably be expected to adversely effect in any material respect, any material patent or patent application, or abandon or permit to lapse any right to any material patent or patent application, in each case, of the Company or any of its SubsidiariesSchedules); or
(xxij) authorize any ofTake, or commit agree in writing or agree otherwise to take take, any ofof the actions described in Sections 5.1(a) through (i) above, or any other action that would prevent the foregoing actionsCompany from performing or cause the Company not to perform its covenants hereunder.
Appears in 1 contract
Conduct of Business of the Company and its Subsidiaries. (a) Except as set forth in Section 5.01(a) of the Company Disclosure Schedule, contemplated by this Agreement, required by Law or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during During the period from the date Agreement Date and continuing until the earlier of the termination of this Agreement to and the Effective Time, :
(a) the Company shall, and shall cause each Subsidiary of the Company to, conduct its business solely in the usual, regular and ordinary course in substantially the same manner as heretofore conducted (except to the extent expressly provided otherwise in this Agreement or as consented to in writing by Acquirer) and in compliance with all applicable Legal Requirements;
(b) the Company shall, and shall cause each Subsidiary to, (A) pay all of its Subsidiaries todebts and Taxes when due, carry on subject to good faith disputes over such debts or Taxes, (B) pay or perform its business in other obligations when due, (C) use commercially reasonable efforts consistent with past practice and policies to collect accounts receivable when due and not extend credit outside of the ordinary course andof business consistent with past practices, (D) sell products consistent with past practices as to the extent license, service and maintenance terms, incentive programs, and in accordance with GAAP requirements as to revenue recognition and (E) use its commercially reasonable efforts consistent therewith, use reasonable best efforts with past practice and policies to preserve substantially intact its current present business organizations, to keep available the services of its current present officers and key employees and to preserve its relationships with significant customers, suppliers, distributors, licensors, licensees, distributors, lessors and others having significant business dealings with it. Without limiting the generality of the foregoing, except as set forth in Section 5.01(a) of the Company Disclosure Schedule, contemplated by this Agreement, required by Law (including, as applicable, Section 409A of the Code) or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective Time, end that its goodwill and ongoing businesses shall be unimpaired at the Company shall not, and shall not permit any of its Subsidiaries to:
(i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock, other than dividends or distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent and other than as required pursuant to the Rights AgreementClosing;
(iic) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in lieu of or in substitution for shares of its capital stock;
(iii) purchase, redeem or otherwise acquire any shares of its capital stock or any rights, warrants or options to acquire any such shares, other than (A) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of the Company Stock Options or as required pursuant to the terms of the ESPP, (B) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Incentive Plans and (C) the acquisition by the Company of Company Stock Options, Company Restricted Stock Units and shares of Company Restricted Stock in accordance with their terms in effect as of the date of this Agreement in connection with the forfeiture of such awards;
(iv) issue, deliver or sell any shares of its capital stock, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, other than (A) upon the exercise of Company Stock Options and rights under the ESPP outstanding on the date of this Agreement, in each case in accordance with their present terms, (B) upon the vesting of Company Restricted Stock Units outstanding on the date of this Agreement, in accordance with their present terms, (C) as required to comply with any Company Benefit Plan as in effect on the date of this Agreement, (D) upon the conversion of the Convertible Notes outstanding on the date of this Agreement, in accordance with their present terms and (E) the issuance of Rights and the issuance of Company Common Stock or Preferred Stock of the Company upon the exercise of Rights, in each case, pursuant to the terms and conditions of the Rights Agreement;
(v) amend the Company Certificate of Incorporation or the Company Bylaws or the comparable organizational documents of any Subsidiary of the Company;
(vi) merge or consolidate with, or purchase an equity interest in or a substantial portion of the assets of, any person or any division or business thereof other than purchases of assets where the amount of the consideration paid or transferred by the Company and its Subsidiaries in connection with all such transactions does not exceed one million dollars ($1,000,000) in the aggregate;
(vii) assign, sublease, terminate, waive any material rights under, or materially amend any Lease, or sell, lease or otherwise dispose of any of its properties or assets with an aggregate value in excess of one million dollars ($1,000,000), other than sales of inventory and other assets party (other than Owned Real Property the Merger Consideration Recipients’ Agent) shall promptly notify the other party of any change, occurrence or Leased Real Property) event not in the ordinary course of its or any their respective subsidiary’s business, or of any change, occurrence or event which, individually or in the aggregate with any other changes, occurrences and events, would reasonably be expected to cause any of the conditions to closing set forth in Article 6 not to be satisfied;
(viiid) the Company shall, and shall cause each Subsidiary to, assure that each of its Contracts (Aother than with Acquirer) incur entered into after the Agreement Date will not require the procurement of any indebtedness consent, waiver or novation or provide for borrowed moneyany change in the obligations of any party in connection with, issue or sell any debt securities or warrants or other rights to acquire any debt securities terminate as a result of the Company consummation of, the Mergers, and shall give reasonable advance notice to Acquirer prior to allowing any Material Contract to lapse or any of terminate by its Subsidiaries, guarantee any such indebtedness or any debt securities of another person or enter into any “keep well” or other agreement to maintain any financial statement condition of another person (collectively, “Indebtedness”), other than (1) Indebtedness incurred, assumed or otherwise entered into in the ordinary course of business (including any borrowings under the Company’s existing credit facilities and in respect of letters of credit) for additional amounts after the date hereof not in excess of five million dollars ($5,000,000) in the aggregate and (2) Indebtedness incurred in connection with the refinancing of any Indebtedness existing on the date of this Agreement or permitted to be incurred, assumed or otherwise entered into hereunder; or (B) make any loans or capital contributions to, or investments in, any other personterms;
(ixe) make any capital expendituresthe Company shall, other than and shall cause each Subsidiaries to, maintain each of its leased premises in accordance with the Company’s capital expenditures plan as set forth on Section 5.01(a) of the Company Disclosure Schedule;
(x) settle any (A) material claim or material litigation, in each case made or pending against the Company or any of its Subsidiaries, other than any payment, discharge, settlement or satisfaction where no non-monetary obligations are imposed on the Company or its Subsidiaries or would apply to Parent or its Subsidiaries and where the amounts paid or to be paid (i) are covered by insurance coverage maintained by the Company or (ii) in an amount less than one million dollars ($1,000,000), individually, and five million dollars ($5,000,000), in the aggregate or (B) any investigation by any Governmental Entity by agreeing to a material fine or penalty or non-monetary obligations;
(xi) except as required pursuant to the terms of any Company Benefit Plan or other written agreement, in each case, in effect on the date of this Agreement, (1) grant to any officer, director or employee of the Company or any of its Subsidiaries any increase in compensation (other than increases in the ordinary course of business that are not material for employees who are not executive officers of the Company or any of its Subsidiaries), (2) grant to any officer, director or employee of the Company or any of its Subsidiaries any change in control, severance, retention or termination compensation or benefits, or any increase in change in control, retention, severance or termination compensation or benefits, (3) enter into any employment, consulting, severance, termination, retention or change in control agreement with any officer, director or employee of the Company or any of its Subsidiaries, (4) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or any plan, agreement or arrangement which, if in effect on the date of the Agreement, would constitute a Company Benefit Plan or (5) accelerate any rights or benefits, or make any material determinations, under any Company Benefit Plan; provided, however, that the foregoing clauses (1), (2), and (3) shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees or sales representatives or to employees or sales representatives in the context of promotions based on job performance or workplace requirements, in each case in the ordinary course of business, or pursuant to existing plans, agreements, benefits and compensation arrangements and incentive grants (excluding any plans, agreements, arrangements or grants pursuant to which compensation or benefits are payable based wholly or partially on the occurrence of a change in control) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees or sales representatives in similar positions;
(xii) make any material change in accounting methods, principles or practices affecting the consolidated assets, liabilities or results of operations of the Company, other than as required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including Regulation S-X under the Securities Act;
(xiii) except as consistent with past practice, make any material Tax election, file any amended Tax Return with respect to any material Tax, change any annual Tax accounting period, settle or compromise any material Tax audit, enter into any material closing agreement, surrender any right to claim a material refund of Taxes or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiaries;
(xiv) except as required pursuant to this Agreement or the terms of the applicable agreement covering the indebtedness to be repaid to which the Company or any Subsidiary is a party as in effect as of the date hereof, pre-pay any long-term debt (which shall be deemed to include pre-payments or repayments of lines of credit facilities or other similar lines of credit or payments made in respect of any termination or settlement of any interest rate swap or other similar hedging instrument relating thereto other than currency or commodity swaps or hedging instruments entered into in the ordinary course of business as described in Section 5.01(a) of the Company Disclosure Schedule);
(xv) amend, modify, cancel, terminate or waive or release any material right under any Company Material Contract or enter into any new contract, agreement or arrangement that, if entered into prior to the date of this Agreement, would be a Company Material Contract, where such action or omission would or would reasonably be expected, individually or in the aggregate, to (A) have a Material Adverse Effect, (B) impair in any material respect the ability of the Company or its Subsidiaries to perform its obligations under this Agreement, (C) prevent or materially impede, interfere with, hinder or delay the consummation of any of the transactions contemplated by this Agreement or (D) impair in any material respect the ability of the Company and its Subsidiaries to conduct their business as currently conducted;
(xvi) create any subsidiary of the Company or otherwise alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiaries;
(xvii) renew or enter into any noncompete or material exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries or, after the Share Acceptance Date, Parent or its Subsidiaries;
(xviii) enter into any material transaction with any of its Affiliates (other than the Company and its Subsidiaries) other than pursuant to written arrangements in effect on the date of this Agreement and excluding any employment, compensation or similar arrangements otherwise permitted pursuant to this Section 5.01(a);
(xix) transfer or make available to a third party any material research materials or material Intellectual Property, or transfer or make available to any third party any Pharmaceutical Product or product candidate owned by the Company or any Subsidiary of the Company or being studied in a Company or Subsidiary research program, except (A) as set forth in Section 5.01(a) of the Company Disclosure Schedule or (B) pursuant to any applicable written agreement in the ordinary course of business;
(xx) take (or omit to take) any action that adversely affects in any material respect, or would reasonably be expected to adversely effect in any material respect, any material patent or patent application, or abandon or permit to lapse any right to any material patent or patent application, in each case, of the Company or any of its Subsidiarieslease; or
(xxi) authorize any of, or commit or agree to take any of, the foregoing actions.and
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Synaptics Inc)
Conduct of Business of the Company and its Subsidiaries. (a) Except as set forth in Section 5.01(a) of the Company Disclosure Schedule, contemplated by this Agreement, required by Law or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from From the date of this Agreement to until the Effective TimeClosing, the Company shall, and shall cause each of its Subsidiaries to, carry on its business shall conduct the Business in the ordinary course and, to the extent consistent therewith, use reasonable best efforts to preserve substantially intact its current business organizations, to keep available the services Ordinary Course of its current officers and employees and to preserve its relationships with significant customers, suppliers, licensors, licensees, distributors, lessors and others having significant business dealings with itBusiness. Without limiting the generality of the foregoing, except as set forth in Section 5.01(a) 6.1 of the Company Disclosure Schedule, contemplated by this Agreementthe Sellers shall cause the Company and its Subsidiaries not to, required by Law and the Company and its Subsidiaries shall not, without the written consent of Buyer (including, as applicable, Section 409A of the Code) or consented to in writing by Parent (such consents which shall not to be unreasonably withheld or delayed), during ):
(a) amend the period from the date Organizational Documents of this Agreement to the Effective Time, the Company shall not, and shall not permit or any of its Subsidiaries to:Subsidiaries;
(ib) declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock or property) in respect of, property or any of its capital stockcombination thereof), other than (i) dividends or other distributions by a direct paid or indirect wholly owned Subsidiary of payable to the Company by its Subsidiaries and (ii) dividends or other distributions which would not result in the Closing Working Capital to its parent and other be less than as required pursuant to the Rights AgreementTarget Working Capital;
(iic) split, combine or reclassify any of its capital stock or issue or authorize except as required under the issuance terms of any other securities in lieu of equity plan or in substitution for shares of its capital stock;
(iii) purchaseapplicable award agreement, redeem redeem, repurchase or otherwise acquire any shares equity of a Company or its capital stock Subsidiaries, or any rights, warrants or options to acquire any such shares, other than issue (A) the acquisition by any equity of a the Company or any of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of the Company Stock Options or as required pursuant to the terms of the ESPPits Subsidiaries, (B) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Incentive Plans and (C) the acquisition by the Company of Company Stock Optionsany option or warrant for, Company Restricted Stock Units and shares of Company Restricted Stock in accordance with their terms in effect as of the date of this Agreement in connection with the forfeiture of such awards;
(iv) issue, deliver or sell any shares of its capital stock, any other voting securities or any securities security convertible into, or any rights, warrants exercisable or options to acquireexchangeable for, any such shares, voting securities or convertible securitiesequity interests in, or any “phantom” stockother security of, the Company or any of its Subsidiaries, (C) “phantom” stock rights, stock appreciation rights or stock rights, stock-based performance units, commitments, Contracts, arrangements or undertakings to which the Company or any of its Subsidiaries is a party or by which any of them is bound (1) obligating the Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional units of its equity interests or any security convertible into, or exercisable or exchangeable for, any equity interest in the Company or any of its Subsidiaries or any bond, debenture, note or other than Indebtedness having the right to vote on any matters on which the holders of equity interests in the Company or any of its Subsidiaries may vote, (A2) upon obligating the exercise Company or any of Company Stock Options its Subsidiaries to issue, grant, extend or enter into any such option, warrant, security, right, unit, commitment, Contract, arrangement or undertaking or (3) that give any Person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights under accruing to holders of the ESPP outstanding on equity interests in the date Company or any of this Agreement, in each case in accordance with their present terms, (B) upon the vesting of Company Restricted Stock Units outstanding on the date of this Agreement, in accordance with their present terms, (C) as required to comply with any Company Benefit Plan as in effect on the date of this Agreement, its Subsidiaries or (D) upon any bond, debenture, note or other Indebtedness having the conversion right to vote (or convertible into, or exercisable or exchangeable for, securities having the right to vote) on any matters on which the holders of the Convertible Notes outstanding on the date of this Agreement, equity interests in accordance with their present terms and (E) the issuance of Rights and the issuance of Company Common Stock or Preferred Stock of the Company upon the exercise or any of Rights, in each case, pursuant to the terms and conditions of the Rights Agreementits Subsidiaries may vote;
(vd) amend the Company Certificate of Incorporation or the Company Bylaws or the comparable organizational documents of transfer any Subsidiary of the CompanyCommon Shares to any Person;
(vie) merge split, combine or consolidate with, or purchase an reclassify any equity interest interests in or a substantial portion of the assets of, any person or any division or business thereof other than purchases of assets where the amount of the consideration paid or transferred by the Company and its Subsidiaries in connection with all such transactions does not exceed one million dollars ($1,000,000) in the aggregate;
(vii) assign, sublease, terminate, waive any material rights under, or materially amend any Lease, or sell, lease or otherwise dispose of any of its properties or assets with an aggregate value in excess of one million dollars ($1,000,000), other than sales of inventory and other assets (other than Owned Real Property or Leased Real Property) in the ordinary course of business;
(viii) (A) incur any indebtedness for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee or issue any such indebtedness or any debt securities of another person or enter into any “keep well” or other agreement to maintain any financial statement condition of another person (collectively, “Indebtedness”), other than (1) Indebtedness incurred, assumed or otherwise entered into in the ordinary course of business (including any borrowings under the Company’s existing credit facilities and security in respect of letters of credit) for additional amounts after the date hereof not in excess of five million dollars ($5,000,000) in the aggregate and (2) Indebtedness incurred in connection with the refinancing of any Indebtedness existing on the date of this Agreement or permitted to be incurred, assumed or otherwise entered into hereunder; or (B) make any loans or capital contributions to, or investments in, any other person;
(ix) make any capital expenditures, other than in accordance with the Company’s capital expenditures plan as set forth on Section 5.01(a) of the Company Disclosure Schedule;
(x) settle any (A) material claim or material litigationof, in each case made lieu of or pending against in substitution for the equity interests in the Company or any of its Subsidiaries;
(f) loan, other advance, invest or make a capital contribution to or in any Person in an amount greater than any payment, discharge, settlement or satisfaction where no non-monetary obligations are imposed on the Company or its Subsidiaries or would apply to Parent or its Subsidiaries and where the amounts paid or to be paid $100,000;
(g) (i) are covered by insurance coverage maintained by the Company incur any Indebtedness or (ii) in an amount less mortgage or pledge any material assets, tangible or intangible, of the Company or any of its Subsidiaries or create or incur any Lien thereupon (other than one million dollars ($1,000,000), individually, and five million dollars ($5,000,000Permitted Liens), in each case other than in the aggregate or (B) any investigation by any Governmental Entity by agreeing to a material fine or penalty or non-monetary obligationsOrdinary Course of Business;
(xih) sell, transfer or lease any of its assets to, or enter into any agreement or arrangement with, any Seller or any of its Affiliates, except as required pursuant to for (i) transactions solely among the terms Company and its Subsidiaries and (ii) sales and purchases of goods and services (and payments for such sales and purchases) in the Ordinary Course of Business;
(i) acquire, directly or indirectly, any other Person or its business, other than in the Ordinary Course of Business;
(j) incur any capital expenditures in excess of the Company’s and its Subsidiaries’ budget for capital expenditures;
(k) sell, lease, license or otherwise dispose of any of a material portion of its assets, other than assets sold, leased, licensed or otherwise disposed of in the Ordinary Course of Business;
(l) enter into any employment agreement with any director, officer, manager or employee of the Company Benefit Plan or other written agreement, in each case, in effect on the date any of this Agreement, (1) its Subsidiaries or grant to any director, officer, director manager or employee of the Company or any of its Subsidiaries any increase in compensation (other than increases or fringe benefits in any form, except in the ordinary course Ordinary Course of business that are not material for employees who are not executive officers Business, as required by applicable Law or pursuant to the terms of any Employee Benefit Plan;
(m) grant or increase any severance, retention, change-of-control, termination or similar payments to any present or former director, officer, manager or employee of any of the Company or any of its Subsidiaries), except in the Ordinary Course of Business or in accordance with existing agreements;
(2n) grant to any officer, director or employee of the Company or any of its Subsidiaries any change in control, severance, retention or termination compensation or benefits, or any increase in change in control, retention, severance or termination compensation or benefits, (3i) enter into into, adopt, amend in any employment, consulting, severance, termination, retention material respect or change in control agreement with terminate any officer, director Employee Benefit Plan or employee of other benefit plan relating to the Company or any of its Subsidiaries, (4ii) establishgrant any increase in the compensation or benefits of, adoptor pay or otherwise grant any bonus not required by any Employee Benefit Plan, or (iii) enter into or amend in any material respect Contract to do any collective bargaining agreement or any plan, agreement or arrangement which, if in effect on the date of the Agreementforegoing, would constitute a Company Benefit Plan in each case, except in the Ordinary Course of Business or (5) accelerate as required by applicable law or the terms of any rights or benefits, or make any material determinations, under any Company Employee Benefit Plan; provided, however, that ;
(o) change the foregoing clauses (1), (2), and (3) shall not restrict fiscal year of the Company or any of its Subsidiaries from entering into or making available to newly hired employees or sales representatives or to employees or sales representatives in the context of promotions based on job performance or workplace requirements, in each case in the ordinary course of business, or pursuant to existing plans, agreements, benefits and compensation arrangements and incentive grants (excluding any plans, agreements, arrangements or grants pursuant to which compensation or benefits are payable based wholly or partially on the occurrence of a change in control) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees or sales representatives in similar positions;
(xii) make any material change in any method of accounting methods, principles or practices affecting the consolidated assets, liabilities accounting practice or results of operations of the Companypolicy, other than as required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including Regulation S-X under the Securities ActGAAP;
(xiiip) except as consistent with past practicemake, make revoke or change any material Tax election, adopt or change any material Tax accounting method or period, file any an amended Tax Return with respect to any a material Tax, change any annual Tax accounting periodmatter, settle or compromise any material Tax auditclaim or assessment, enter into any material closing agreement, surrender any right to claim a material refund of Taxes or consent to any extension or waiver of the limitation statute of limitations period applicable to any material Tax claim or assessment relating assessment;
(q) purchase, order or otherwise acquire or sell inventory outside of the Ordinary Course of Business;
(r) permit the Company or any of its Subsidiaries to acquire, sell, lease, license, transfer, pledge, encumber, grant or dispose of (whether by merger, consolidation, purchase, sale or otherwise) any material Intellectual Property Asset, or enter into any material commitment or transaction, or take any action, with respect to any material Intellectual Property Asset outside the Ordinary Course of Business;
(s) permit the Company or any of its Subsidiaries, with respect to the Company Intellectual Property Assets, (i) to fail to pay any renewal fees when due, (ii), fail to timely file any responses in any registration office when due, (iii) abandon or otherwise permit such Intellectual Property Assets to fall into the public domain;
(xivt) except as required pursuant to this Agreement recognize any union or the terms of the applicable agreement covering the indebtedness to be repaid to which the Company or any Subsidiary is a party as in effect as of the date hereof, pre-pay any long-term debt (which shall be deemed to include pre-payments or repayments of lines of credit facilities or other similar lines of credit or payments made in respect of any termination or settlement of any interest rate swap or other similar hedging instrument relating thereto other than currency or commodity swaps or hedging instruments entered into in the ordinary course of business as described in Section 5.01(a) of the Company Disclosure Schedule);
(xv) amend, modify, cancel, terminate or waive or release any material right under any Company Material Contract negotiate or enter into any new contractcollective bargaining agreement;
(u) amend, agreement terminate or arrangement thatmodify either of the Marsh Emxxxxxent Agreements;
(v) make or incur any commitment, if entered into prior to the date of this Agreement, would be a Company Material Contract, where such action liability or omission would or would reasonably be expected, individually or in the aggregate, to (A) have a Material Adverse Effect, (B) impair in any material respect the ability obligations of the Company or its Subsidiaries to perform its obligations under this Agreement, (C) prevent or materially impede, interfere with, hinder or delay the consummation in respect of any of the transactions contemplated by this Agreement royalties, public relations activities, marketing agencies, advertising agencies, food shows or (D) impair in any material respect the ability of the Company and its Subsidiaries to conduct their business as currently conducted;
(xvi) create any subsidiary of the Company or otherwise alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiaries;
(xvii) renew or enter into any noncompete or material exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries or, after the Share Acceptance Date, Parent or its Subsidiaries;
(xviii) enter into any material transaction with any of its Affiliates (other than the Company and its Subsidiaries) other than pursuant to written arrangements in effect on the date of this Agreement and excluding any employment, compensation or similar arrangements otherwise permitted pursuant to this Section 5.01(a);
(xix) transfer or make available to a third party any material research materials or material Intellectual Property, or transfer or make available to any third party any Pharmaceutical Product or product candidate owned by the Company or any Subsidiary of the Company or being studied in a Company or Subsidiary research program, except (A) as set forth in Section 5.01(a) of the Company Disclosure Schedule or (B) pursuant to any applicable written agreement in the ordinary course of business;
(xx) take (or omit to take) any action that adversely affects in any material respect, or would reasonably be expected to adversely effect in any material respect, any material patent or patent application, or abandon or permit to lapse any right to any material patent or patent applicationrack purchases, in each case, case in excess of the Company or any of its Subsidiaries$50,000; or
(xxiw) authorize any of, or commit or agree to take any of, of the foregoing actions.
Appears in 1 contract
Conduct of Business of the Company and its Subsidiaries. (a) Except as set forth in Section 5.01(a) of the Company Disclosure Schedule, contemplated by this Agreement, required by Law or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective Time, the Company and its subsidiaries shall, and the Shareholders shall cause each of the Company and its Subsidiaries subsidiaries to, carry on its business in the conduct their operations according to their ordinary course andof business and consistent with past practice, to and the extent consistent therewithCompany and its subsidiaries shall, and the Shareholders shall cause the Company and its subsidiaries to, use reasonable their best efforts to preserve substantially intact its current their business organizationsorganization, to keep available the services of its current their officers and employees and to preserve its maintain satisfactory relationships with significant customers, suppliers, licensors, licensees, distributorssuppliers, lessors customers and others having significant business dealings relationships with itthem. Without limiting the generality of the foregoing, except as set forth in Section 5.01(a) of the Company Disclosure Schedule, contemplated by this Agreement, required by Law (including, as applicable, Section 409A of the Code) or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement prior to the Effective Time, neither the Company shall notnor its subsidiaries will, and shall not permit any without the prior written consent of its Subsidiaries toMerger Sub:
(ia) amend or propose to amend its articles of incorporation or by-laws (or comparable governing instruments);
(b) authorize for issuance, issue, sell, pledge, deliver or agree or commit to issue, sell, pledge or deliver (whether through the issuance or granting of any options, warrants, commitments, subscriptions, rights to purchase, awards or otherwise) any stock of any class or any securities convertible into or exchangeable for shares of stock of any class of the Company or its subsidiaries;
(c) split, combine or reclassify any shares of its capital stock or declare, pay or set aside any dividend or pay any dividends on, or make any other distributions distribution (whether in cash, stock or propertyproperty or any combination thereof) in respect of, any of its capital stock, other than dividends or distributions by a direct redeem, purchase or indirect wholly owned Subsidiary of the Company otherwise acquire or offer to its parent and other than as required pursuant to the Rights Agreement;
(ii) split, combine or reclassify acquire any of its capital stock or issue or authorize the issuance of any other securities in lieu of or in substitution for shares of its own capital stock;
(iiii) purchase, redeem or otherwise acquire increase in any shares of its capital stock or any rights, warrants or options to acquire any such shares, other than (A) manner the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of the Company Stock Options or as required pursuant to the terms of the ESPP, (B) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Incentive Plans and (C) the acquisition by the Company of Company Stock Options, Company Restricted Stock Units and shares of Company Restricted Stock in accordance with their terms in effect as of the date of this Agreement in connection with the forfeiture of such awards;
(iv) issue, deliver or sell any shares of its capital stock, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, other than (A) upon the exercise of Company Stock Options and rights under the ESPP outstanding on the date of this Agreement, in each case in accordance with their present terms, (B) upon the vesting of Company Restricted Stock Units outstanding on the date of this Agreement, in accordance with their present terms, (C) as required to comply with any Company Benefit Plan as in effect on the date of this Agreement, (D) upon the conversion of the Convertible Notes outstanding on the date of this Agreement, in accordance with their present terms and (E) the issuance of Rights and the issuance of Company Common Stock or Preferred Stock of the Company upon the exercise of Rights, in each case, pursuant to the terms and conditions of the Rights Agreement;
(v) amend the Company Certificate of Incorporation or the Company Bylaws or the comparable organizational documents of any Subsidiary of the Company;
(vi) merge or consolidate with, or purchase an equity interest in or a substantial portion of the assets of, any person or any division or business thereof other than purchases of assets where the amount of the consideration paid or transferred by the Company and its Subsidiaries in connection with all such transactions does not exceed one million dollars ($1,000,000) in the aggregate;
(vii) assign, sublease, terminate, waive any material rights under, or materially amend any Lease, or sell, lease or otherwise dispose compensation of any of its properties directors or assets with an aggregate value officers; (ii) increase in excess any manner the compensation of one million dollars ($1,000,000), other than sales of inventory and other assets (other than Owned Real Property or Leased Real Property) in the ordinary course of business;
(viii) (A) incur any indebtedness for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any such indebtedness employees that are not directors or any debt securities of another person or enter into any “keep well” or other agreement to maintain any financial statement condition of another person (collectively, “Indebtedness”), officers other than (1) Indebtedness incurred, assumed or otherwise entered into in the ordinary course of business (including any borrowings under the Company’s existing credit facilities and in respect of letters of credit) for additional amounts after the date hereof not in excess of five million dollars ($5,000,000) in the aggregate and (2) Indebtedness incurred in connection consistent with the refinancing past practices of any Indebtedness existing on the date of this Agreement Company and its subsidiaries, as the case may be; (iii) make, or permitted agree to be incurredmake, assumed or otherwise entered into hereunder; or (B) make any loans or capital contributions toadvances to any of its officers, directors or investments in, any other person;
employees (ix) make any capital expenditures, other than normal travel advances paid to such persons in accordance a manner consistent with the Company’s capital expenditures plan as set forth on Section 5.01(a) past practices of the Company Disclosure Schedule;
and its subsidiaries); (xiv) settle pay or agree to pay any (A) material claim pension, retirement allowance or material litigation, in each case made or pending against the Company or any of its Subsidiaries, other than any payment, discharge, settlement or satisfaction where no non-monetary obligations are imposed on the Company or its Subsidiaries or would apply to Parent or its Subsidiaries and where the amounts paid or to be paid (i) are covered by insurance coverage maintained by the Company or (ii) in an amount less than one million dollars ($1,000,000), individually, and five million dollars ($5,000,000), in the aggregate or (B) any investigation employee benefit not required by any Governmental Entity by agreeing to a material fine or penalty or non-monetary obligations;
(xi) except as required pursuant to the terms of any Company Benefit Plan or other written agreement, in each case, in effect on the date of this Agreement, (1) grant to any officer, director or employee of the Company or any of its Subsidiaries any increase in compensation (other than increases in the ordinary course of business that are not material for employees who are not executive officers of the Company or any of its Subsidiaries), (2) grant to any officer, director or employee of the Company or any of its Subsidiaries any change in control, severance, retention or termination compensation or benefits, or any increase in change in control, retention, severance or termination compensation or benefits, (3) enter into any employment, consulting, severance, termination, retention or change in control agreement with any officer, director or employee of the Company or any of its Subsidiaries, (4) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or any existing plan, agreement or arrangement whichto any such director, if officer or employee, whether past or present; (v) commit itself to any additional pension, profit-sharing, bonus, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or to any employment or consulting agreement with or for the benefit of any person, or to amend any of such plans or any of such agreements in effect existence on the date of the Agreement, would constitute a Company Benefit Plan hereof; or (5) accelerate any rights or benefits, or make any material determinations, under any Company Benefit Plan; provided, however, that the foregoing clauses (1), (2), and (3) shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees or sales representatives or to employees or sales representatives in the context of promotions based on job performance or workplace requirements, in each case in the ordinary course of business, or pursuant to existing plans, agreements, benefits and compensation arrangements and incentive grants (excluding any plans, agreements, arrangements or grants pursuant to which compensation or benefits are payable based wholly or partially on the occurrence of a change in control) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees or sales representatives in similar positions;
(xiivi) make any material change in accounting methods, principles payment or practices affecting the consolidated assets, liabilities or results of operations of the Company, other than as required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including Regulation S-X under the Securities Act;
(xiii) except as consistent with past practice, make any material Tax election, file any amended Tax Return with respect to any material Tax, change any annual Tax accounting period, settle or compromise any material Tax audit, enter into any material closing agreement, surrender any right to claim a material refund of Taxes or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiaries;
(xiv) except as required pursuant to this Agreement or the terms of the applicable agreement covering the indebtedness to be repaid to which the Company or any Subsidiary is a party as in effect as of the date hereof, pre-pay any long-term debt (which shall be deemed to include pre-payments or repayments of lines of credit facilities or other similar lines of credit or payments made in respect of any termination or settlement of any interest rate swap or other similar hedging instrument relating thereto other than currency or commodity swaps or hedging instruments entered into in the ordinary course of business as described in Section 5.01(a) of the Company Disclosure Schedule);
(xv) amend, modify, cancel, terminate or waive or release any material right award under any Company Material Contract or enter into any new contract, agreement or arrangement that, if entered into prior to the date of this Agreement, would be a Company Material Contract, where such action or omission would or would reasonably be expected, individually or in the aggregate, to (A) have a Material Adverse Effect, (B) impair in any material respect the ability executive compensation plan of the Company or its Subsidiaries to perform its obligations under this Agreement, (C) prevent or materially impede, interfere with, hinder or delay the consummation of any of the transactions contemplated by this Agreement or (D) impair in any material respect the ability of the Company and its Subsidiaries to conduct their business as currently conducted;
(xvi) create any subsidiary of the Company or otherwise alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiaries;
(xvii) renew or enter into any noncompete or material exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries or, after the Share Acceptance Date, Parent or its Subsidiaries;
(xviii) enter into any material transaction with any of its Affiliates (other than the Company and its Subsidiaries) other than pursuant to written arrangements in effect on the date of this Agreement and excluding any employment, compensation or similar arrangements otherwise permitted pursuant to this Section 5.01(a);
(xix) transfer or make available to a third party any material research materials or material Intellectual Property, or transfer or make available to any third party any Pharmaceutical Product or product candidate owned by the Company or any Subsidiary of the Company or being studied in a Company or Subsidiary research program, except (A) as set forth in Section 5.01(a) of the Company Disclosure Schedule or (B) pursuant to any applicable written agreement in the ordinary course of business;
(xx) take (or omit to take) any action that adversely affects in any material respect, or would reasonably be expected to adversely effect in any material respect, any material patent or patent application, or abandon or permit to lapse any right to any material patent or patent application, in each case, of the Company or any of its Subsidiariessubsidiaries; or
(xxie) authorize any ofagree, or commit or agree arrange to take do any of, of the foregoing actionsforegoing.
Appears in 1 contract
Samples: Merger Agreement (Nfo Research Inc)
Conduct of Business of the Company and its Subsidiaries. (a) Except as set forth in Section 5.01(a) of the Company Disclosure Schedule, contemplated by this Agreement, required by Law or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during During the period from the date of this Agreement to and continuing until the earlier of the termination of this Agreement and the Effective Time, the Company shallwill (except to the extent that Parent shall otherwise consent in writing or as specifically contemplated by this Agreement), and shall will cause each of its Subsidiaries to, carry on its business in the usual and ordinary course andin substantially the same manner as heretofore conducted, to the extent pay its debts and Taxes when due, pay or perform other obligations when due, and use its commercially reasonable efforts consistent therewith, use reasonable best efforts with past practice and policies to preserve substantially intact its current present business organizationsorganization, to keep available the services of its current present officers and key employees and to preserve its relationships with significant customers, suppliers, distributors, licensors, licensees, distributors, lessors and others having significant business dealings with it. The Company shall promptly notify Parent of any materially negative event involving or adversely affecting the Company or any of its Subsidiaries. Without limiting the generality of the foregoing, foregoing and except as set forth in Section 5.01(a) of the Company Disclosure Schedule, expressly contemplated by this Agreement, required by Law (including, as applicable, Section 409A of the Code) or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any cause each of its Subsidiaries toto not, without the prior written consent of Parent:
(ia) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock payments or property) in respect of, enter into any of its capital stock, other than dividends commitment or distributions by a direct or indirect wholly owned Subsidiary transaction outside of the Company to its parent and other than as required pursuant to ordinary course of business consistent with prior practice or waive or release any right or claim outside the Rights Agreementordinary course of business or inconsistent with prior practice;
(iib) split, combine or reclassify incur any of its capital stock or issue or authorize the issuance of any other securities in lieu of or in substitution for shares of its capital stock;
Indebtedness (iii) purchase, redeem or otherwise acquire any shares of its capital stock or any rights, warrants or options except with respect to acquire any such shares, other than (A) the acquisition by the Company of shares of Company Common Stock Indebtedness in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of the Company Stock Options or as required pursuant to the terms of the ESPP, (B) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Incentive Plans and (C) the acquisition by the Company of Company Stock Options, Company Restricted Stock Units and shares of Company Restricted Stock in accordance with their terms in effect as of the date of this Agreement in connection with the forfeiture of such awardsAdvances);
(ivc) issue, grant, deliver or sell any shares of its capital stocksell, or authorize or propose the issuance, grant, delivery or sale of, or purchase or propose the purchase of, any other voting securities Company Capital Stock, Subsidiary Securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, other than (A) upon the exercise of Company Stock Options and rights under the ESPP outstanding on the date of this Agreement, in each case in accordance with their present terms, Rights (B) upon the vesting of Company Restricted Stock Units outstanding on the date of this Agreement, in accordance with their present terms, (C) as required to comply with any Company Benefit Plan as in effect on the date of this Agreement, (D) upon the conversion of the Convertible Notes outstanding on the date of this Agreement, in accordance with their present terms and (E) the issuance of Rights and except for the issuance of Company Common Stock upon exercise or Preferred conversion of presently outstanding Company Stock Rights; provided, that (i) the Company timely pays in cash all Taxes required to be withheld and paid in connection with such exercise or conversion, (ii) the amount of such Taxes is contributed to the Company in cash by the Person exercising or converting such Company Stock Right, (iii) for purpose of determining the amount of such Taxes, the fair market value of the Company upon the exercise of Rights, in each case, Capital Stock received pursuant to such exercise or conversion is equal to the terms and conditions maximum aggregate consideration payable with respect to such Company Capital Stock pursuant to this Agreement, including for this purpose any consideration to be deposited as part of the Rights AgreementHoldback Amount and (iv) the Company promptly notifies Parent of such exercise or conversion);
(vd) re-price or amend the terms of any Company Certificate of Incorporation Stock Right or the Company Bylaws or the comparable organizational documents terms of any Subsidiary agreement with respect to shares of Company Capital Stock subject to vesting restrictions, including accelerating the Company;vesting thereof.
(vie) merge acquire or consolidate agree to acquire by merging or consolidating with, or purchase an by purchasing any assets or equity interest in or a substantial portion of the assets securities of, or by any person other manner, any business or any Person or division or business thereof other than purchases of assets where the amount of the consideration paid or transferred by the Company and its Subsidiaries in connection with all such transactions does not exceed one million dollars ($1,000,000) in the aggregate;
(vii) assign, sublease, terminate, waive any material rights underthereof, or materially amend any Lease, otherwise acquire or sell, lease or otherwise dispose agree to acquire outside of any of its properties or assets with an aggregate value in excess of one million dollars ($1,000,000), other than sales of inventory and other assets (other than Owned Real Property or Leased Real Property) in the ordinary course of businessbusiness consistent with prior practice any assets in any amount;
(viiif) (A) incur hire or engage any indebtedness for borrowed moneyemployees, issue consultants or sell contractors, or encourage any debt securities Employees, consultants or warrants or other rights contractors to acquire any debt securities of resign from the Company or any of its Subsidiaries, guarantee or promote any such indebtedness Employees or change the employment status or titles of any debt securities Employees, except for the hiring or promotion of another person employees or enter into any “keep well” engagements of consultants or other agreement to maintain any financial statement condition of another person (collectively, “Indebtedness”), other than (1) Indebtedness incurred, assumed or otherwise entered into contractors in the ordinary course of business (including any borrowings under the Company’s existing credit facilities and in respect of letters of credit) for additional amounts after the date hereof not in excess of five million dollars ($5,000,000) in the aggregate and (2) Indebtedness incurred in connection with the refinancing of any Indebtedness existing on the date of this Agreement at compensation rates comparable to other Employees, consultants or permitted to be incurred, assumed or otherwise entered into hereunder; or (B) make any loans or capital contributions to, or investments in, any other personcontractors at similar levels;
(ixg) make any capital expenditures, other than fail to use commercially reasonable efforts to keep in accordance with the Company’s capital expenditures plan as set forth on full force all insurance policies described in Section 5.01(a) of the Company Disclosure Schedule2.21;
(h) enter into any agreement (x) settle any (A) material claim or material litigation, in each case made or pending against the Company or any of its Subsidiaries, other than any payment, discharge, settlement or satisfaction where no non-monetary obligations are imposed on the Company or its Subsidiaries or would apply to Parent or its Subsidiaries and where the amounts paid or to be paid (i) are covered by insurance coverage maintained by the Company or (ii) in an amount less than one million dollars ($1,000,000), individually, and five million dollars ($5,000,000), in the aggregate or (B) any investigation by any Governmental Entity by agreeing to a material fine or penalty or non-monetary obligations;
(xi) except as required pursuant to the terms of any Company Benefit Plan or other written agreement, in each case, in effect on the date of this Agreement, (1) grant to any officer, director or employee of which the Company or any of its Subsidiaries any increase in compensation (other than increases in the ordinary course of business makes representations or warranties or assumes support or indemnification obligations that are not material for employees who are not executive officers of the Company or any of its Subsidiaries), (2) grant to any officer, director or employee of materially more burdensome on the Company or any of its Subsidiaries any change than the representations, warranties and support and indemnification obligations made in controlthe Company’s standard forms of end-user license agreement, severance, retention or termination compensation or benefits, or any increase in change in control, retention, severance or termination compensation or benefits, (3) enter into any employment, consulting, severance, termination, retention or change in control reseller agreement with any officer, director or employee of the Company or any of its Subsidiaries, (4) establish, adopt, enter into or amend in any material respect any collective bargaining and standard support agreement or any plan, agreement or arrangement which, if in effect on the date of the Agreement, would constitute a Company Benefit Plan or (5) accelerate any rights or benefits, or make any material determinations, under any Company Benefit Plan; provided, however, that the foregoing clauses (1), (2), and (3) shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees or sales representatives or to employees or sales representatives in the context of promotions based on job performance or workplace requirements, in each case in the ordinary course of business, or pursuant to existing plans, agreements, benefits and compensation arrangements and incentive grants (excluding any plans, agreements, arrangements or grants pursuant to which compensation or benefits are payable based wholly or partially on the occurrence of a change in controly) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees or sales representatives in similar positions;
(xii) make contains any material change in accounting methods, principles or practices affecting the consolidated assets, liabilities or results of operations of the Company, other than as required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including Regulation S-X under the Securities Act;
(xiii) except as consistent with past practice, make any material Tax election, file any amended Tax Return with respect to any material Tax, change any annual Tax accounting period, settle or compromise any material Tax audit, enter into any material closing agreement, surrender any right to claim a material refund of Taxes or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment provision relating to the “change of control” of the Company or any of its Subsidiaries;
(xivi) except as required pursuant take any action that would have been a breach of or would reasonably be expected to this Agreement or the terms cause a breach of any of the applicable agreement covering provisions of Section 2.9 (except the indebtedness to be repaid to which the Company or any Subsidiary is a party as in effect as of the date hereof, pre-pay any long-term debt (which shall be deemed to include pre-payments or repayments of lines of credit facilities or other similar lines of credit or payments made in respect taking of any termination or settlement of any interest rate swap or other similar hedging instrument relating thereto other than currency or commodity swaps or hedging instruments entered into action described in 2.9(k), (m) and (n) in the ordinary course of business as described in Section 5.01(abusiness, consistent with prior practice) of had such action occurred after the Company Disclosure Schedule);
(xv) amend, modify, cancel, terminate or waive or release any material right under any Company Material Contract or enter into any new contract, agreement or arrangement that, if entered into Balance Sheet Date and prior to the date of this AgreementAgreement (without regard to disclosures on the Company Disclosure Schedule); or
(j) take, would be a Company Material Contractor agree in writing or otherwise to take, where such action or omission would or would reasonably be expected, individually or in the aggregate, to (A) have a Material Adverse Effect, (B) impair in any material respect the ability of the actions described in Sections 4.1(a) through (i) above, or any other action that would prevent the Company from performing or its Subsidiaries cause the Company not to perform its obligations under this Agreement, (C) prevent or materially impede, interfere with, hinder or delay the consummation of any of the transactions contemplated by this Agreement or (D) impair in any material respect the ability of the Company and its Subsidiaries to conduct their business as currently conducted;
(xvi) create any subsidiary of the Company or otherwise alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiaries;
(xvii) renew or enter into any noncompete or material exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries or, after the Share Acceptance Date, Parent or its Subsidiaries;
(xviii) enter into any material transaction with any of its Affiliates (other than the Company and its Subsidiaries) other than pursuant to written arrangements in effect on the date of this Agreement and excluding any employment, compensation or similar arrangements otherwise permitted pursuant to this Section 5.01(a);
(xix) transfer or make available to a third party any material research materials or material Intellectual Property, or transfer or make available to any third party any Pharmaceutical Product or product candidate owned by the Company or any Subsidiary of the Company or being studied in a Company or Subsidiary research program, except (A) as set forth in Section 5.01(a) of the Company Disclosure Schedule or (B) pursuant to any applicable written agreement in the ordinary course of business;
(xx) take (or omit to take) any action that adversely affects in any material respect, or would reasonably be expected to adversely effect in any material respect, any material patent or patent application, or abandon or permit to lapse any right to any material patent or patent application, in each case, of the Company or any of its Subsidiaries; or
(xxi) authorize any of, or commit or agree to take any of, the foregoing actionshereunder.
Appears in 1 contract
Conduct of Business of the Company and its Subsidiaries. Unless Purchaser shall otherwise agree in writing (awhich consent shall not be unreasonably withheld, delayed or conditioned) Except and except as set forth expressly provided in Section 5.01(a) of this Agreement or in the Company Disclosure Schedule, contemplated by this Agreement, required by Law or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed)Letter, during the period from the date of this Agreement to the Effective TimeClosing, (i) the Company shall conduct, and it shall cause its subsidiaries to conduct, its or their businesses in the ordinary course and consistent with past practice, and the Company shall, and it shall cause each of its Subsidiaries subsidiaries to, carry on use its business in the ordinary course and, to the extent consistent therewith, use or their reasonable best commercial efforts to preserve substantially intact its current business organizationsorganization, to keep available the services of its current or their officers and employees and to preserve its maintain satisfactory relationships with significant customersall persons with whom it does, suppliersor they do, licensorsbusiness, licensees(ii) the Company shall timely file all reports, distributorsforms or other documents with the SEC required pursuant to the Securities Act or the Securities Exchange Act, lessors (iii) the Company shall enforce any and others having significant business dealings all confidentiality and standstill agreements entered into with it. Without persons other than Purchaser, and (iv) without limiting the generality of the foregoing, except as set forth in Section 5.01(a) of the Company Disclosure Schedule, contemplated by this Agreement, required by Law (including, as applicable, Section 409A of the Code) or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective Time, the Company shall not, and the Company shall cause each Company subsidiary not permit any of its Subsidiaries to:
(iA) amend or propose to amend its Memorandum and Articles of Association or by-laws (or comparable governing instruments);
(B) authorize for issuance, issue, grant, sell, repurchase, acquire, pledge, dispose of, encumber or propose to issue, grant, sell, repurchase, acquire, pledge, dispose of or encumber any shares of, or any subscriptions, warrants, puts, calls, unsatisfied preemptive rights, options or rights of any kind to acquire or sell any shares of, the capital stock or other equity securities of the Company or any of the its subsidiaries including, but not limited to, any securities convertible into or exchangeable for shares of stock of any class of the Company or any of its subsidiaries, except for the issuance of shares pursuant to the exercise of Company Options outstanding as of the date hereof;
(C) split, combine or reclassify any shares of its capital stock or declare, pay or set aside any dividend or pay any dividends on, or make any other distributions distribution (whether in cash, stock or propertyproperty or any combination thereof) in respect of, any of its capital stock, other than dividends or distributions by to the Company or a direct or indirect wholly owned Subsidiary subsidiary of the Company to its parent and other than as required pursuant to the Rights Agreement;
(ii) splitCompany, combine or reclassify any of its capital stock directly or issue or authorize the issuance of any other securities in lieu of or in substitution for shares of its capital stock;
(iii) purchaseindirectly redeem, redeem purchase or otherwise acquire or offer to acquire any shares of its capital stock or other equity securities; provided, however, that the Company shall not declare, pay or set aside any rights, warrants dividend or options other distribution in respect of its capital stock to acquire any such shares, U.S. subsidiary;
(D) other than (A) the acquisition by pursuant to agreements or arrangements between the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price and any subsidiary of the Company Stock Options or as required pursuant to the terms agreements or arrangements between subsidiaries of the ESPP, (B) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Incentive Plans and (C) the acquisition by the Company of Company Stock Options, Company Restricted Stock Units and shares of Company Restricted Stock in accordance with their terms in effect as of the date of this Agreement in connection with the forfeiture of such awards;
(iv) issue, deliver or sell any shares of its capital stock, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, other than (A) upon the exercise of Company Stock Options and rights under the ESPP outstanding on the date of this Agreement, in each case in accordance with their present terms, (B) upon the vesting of Company Restricted Stock Units outstanding on the date of this Agreement, in accordance with their present terms, (C) as required to comply with any Company Benefit Plan as in effect on the date of this Agreement, (D) upon the conversion of the Convertible Notes outstanding on the date of this Agreement, in accordance with their present terms and (E) the issuance of Rights and the issuance of Company Common Stock or Preferred Stock of the Company upon the exercise of RightsCompany, in each case, pursuant to the terms and conditions of the Rights Agreement;
(v) amend the Company Certificate of Incorporation or the Company Bylaws or the comparable organizational documents of any Subsidiary of the Company;
(vi) merge or consolidate with, or purchase an equity interest in or a substantial portion of the assets of, any person or any division or business thereof other than purchases of assets where the amount of the consideration paid or transferred by the Company and its Subsidiaries in connection with all such transactions does not exceed one million dollars ($1,000,000) in the aggregate;
(vii) assign, sublease, terminate, waive any material rights under, or materially amend any Lease, or sell, lease or otherwise dispose of any of its properties or assets with an aggregate value in excess of one million dollars ($1,000,000), other than sales of inventory and other assets (other than Owned Real Property or Leased Real Property) in the ordinary course of business;
(viii) (A) incur any indebtedness for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any such indebtedness or any debt securities of another person or enter into any “keep well” or other agreement to maintain any financial statement condition of another person (collectively, “Indebtedness”), other than (1) Indebtedness incurred, assumed or otherwise entered into in the ordinary course of business consistent with past practice (including a) create, incur or assume any debt for borrowed money, except (i) refinancings of existing obligations on terms that are no less favorable to the Company or its subsidiaries than the existing terms, (ii) for borrowings under the Company’s existing credit facilities in the ordinary course of business consistent with past practice and in respect of letters of credit(iii) for additional amounts after the date hereof not in excess of five million dollars ($5,000,000) accounts payable in the aggregate and (2) Indebtedness incurred in connection with the refinancing of any Indebtedness existing on the date of this Agreement or permitted to be incurred, assumed or otherwise entered into hereunderordinary course; or (Bb) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, indirectly, contingently or otherwise) for the obligations of any person;
(E) except as set forth in Section 4.1(E) of the Company Disclosure Letter, make any loans capital expenditures or make any loans, advances or capital contributions to, or investments in, any other person in excess of $100,000 individually or $500,000 in the aggregate (other than to a non-U.S. subsidiary); provided, however, the Company shall not make any loans, advances on capital contribution to, or investments in, any U.S. subsidiary;
(F) acquire by way of merger, investment, consolidation or otherwise, an operating business (or control of such business) of any other person;
(ixG) other than in the ordinary course of business consistent with past practice, including, without limitation, pursuant to agreements or arrangements between the Company and any subsidiary of the Company or agreements or arrangements between subsidiaries of the Company, voluntarily incur any material liability or material obligation (absolute, accrued, contingent or otherwise);
(H) other than pursuant to agreements or arrangements between the Company and any subsidiary of the Company or agreements or arrangements between subsidiaries of the Company, in each case, in the ordinary course of business consistent with past practice, sell, transfer, dispose of, voluntarily create, or take any action that would result in the creation of, a Lien on, or otherwise voluntarily encumber, or take any action that would result in an encumbrance of, or agree to sell, transfer, dispose of, create a Lien on, or otherwise encumber any assets or properties, real, personal or mixed other than (x) to secure debt permitted under subclause (a) of clause (D), (y) sales of inventory or other assets or properties in the ordinary course of business consistent with past practice or (x) Liens or other encumbrances that are not material to the Company and its subsidiaries taken as a whole;
(I) make any capital expenditureschange to the Company Benefit Plans or agree to increase or increase in any manner or accelerate the payment, right to payment or vesting of the compensation (including bonuses, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other than in accordance with the Company’s capital expenditures plan as set forth on Section 5.01(acompensation or benefits) of any directors or officers of the Company Disclosure Schedule;
(x) settle or enter into, establish, amend or terminate any (A) material claim employment, consulting, retention, change in control, collective bargaining, bonus or material litigationother incentive compensation, profit sharing, health or other welfare, stock option or other equity, pension, retirement, vacation, severance, deferred compensation or other compensation or benefit plan, policy, agreement, trust, fund or arrangement with, for or in each case made or pending against the Company or respect of, any of its Subsidiariesstockholder, officer, director, other employee, agent, consultant or affiliate other than any payment, discharge, settlement or satisfaction where no non-monetary obligations are imposed on the Company or its Subsidiaries or would apply to Parent or its Subsidiaries and where the amounts paid or to be paid (i) are covered by insurance coverage maintained by the Company or (ii) in an amount less than one million dollars ($1,000,000), individually, and five million dollars ($5,000,000), in the aggregate or (B) any investigation by any Governmental Entity by agreeing to a material fine or penalty or non-monetary obligations;
(xi) except as required by law or pursuant to the terms of any Company Benefit Plan or other written agreement, in each case, agreements in effect on the date of this Agreement, ; provided that nothing in this paragraph (1I) grant to shall prohibit any officer, director or employee of annual increase in compensation granted by the Company or any of its Subsidiaries any increase in compensation (other than increases subsidiary thereof in the ordinary course of business that are not material for employees who are not executive officers of the Company consistent with past practice
(J) enter into, amend or any of its Subsidiaries), (2) grant to any officer, director or employee of the Company or any of its Subsidiaries any change in control, severance, retention or termination compensation or benefitsvoluntarily terminate, or take any increase action that would result in change in controlthe termination of, retentionany Company Material Contract, severance or termination compensation waive, release or benefitsassign any material rights or material claims, including, without limitation, any confidentiality or standstill agreements with persons other than Purchaser;
(3K) enter into any employment, consulting, severance, termination, retention compromise or change in control agreement with any officer, director or employee of the Company or any of its Subsidiaries, (4) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or any plan, agreement or arrangement which, if in effect on the date of the Agreement, would constitute a Company Benefit Plan or (5) accelerate any rights or benefitssettlement of, or make take any other material determinationsaction with respect to, under any Company Benefit Plan; providedlitigation, howeveraction, that the foregoing clauses (1)suit, (2)claim, and (3) shall not restrict the Company proceeding or any of its Subsidiaries from entering into or making available to newly hired employees or sales representatives or to employees or sales representatives in the context of promotions based on job performance or workplace requirements, in each case in the ordinary course of business, or pursuant to existing plans, agreements, benefits and compensation arrangements and incentive grants (excluding any plans, agreements, arrangements or grants pursuant to which compensation or benefits are payable based wholly or partially on the occurrence of a change in control) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees or sales representatives in similar positions;
(xii) make any material change in accounting methods, principles or practices affecting the consolidated assets, liabilities or results of operations of the Companyinvestigation, other than as required (A) by GAAP (or any interpretation thereof)the prosecution, including pursuant to standards, guidelines defense and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including Regulation S-X under the Securities Act;
(xiii) except as consistent with past practice, make any material Tax election, file any amended Tax Return with respect to any material Tax, change any annual Tax accounting period, settle or compromise any material Tax audit, enter into any material closing agreement, surrender any right to claim a material refund of Taxes or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiaries;
(xiv) except as required pursuant to this Agreement or the terms of the applicable agreement covering the indebtedness to be repaid to which the Company or any Subsidiary is a party as in effect as of the date hereof, pre-pay any long-term debt (which shall be deemed to include pre-payments or repayments of lines of credit facilities or other similar lines of credit or payments made in respect of any termination or settlement of any interest rate swap routine litigation, actions, suits, claims, proceedings or other similar hedging instrument relating thereto other than currency or commodity swaps or hedging instruments entered into in the ordinary course of business as described in Section 5.01(a) of the Company Disclosure Schedule);
(xv) amend, modify, cancel, terminate or waive or release any material right under any Company Material Contract or enter into any new contract, agreement or arrangement that, if entered into prior to the date of this Agreement, would be a Company Material Contract, where such action or omission would or would reasonably be expected, individually or in the aggregate, to (A) have a Material Adverse Effect, (B) impair in any material respect the ability of the Company or its Subsidiaries to perform its obligations under this Agreement, (C) prevent or materially impede, interfere with, hinder or delay the consummation of any of the transactions contemplated by this Agreement or (D) impair in any material respect the ability of the Company and its Subsidiaries to conduct their business as currently conducted;
(xvi) create any subsidiary of the Company or otherwise alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiaries;
(xvii) renew or enter into any noncompete or material exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries or, after the Share Acceptance Date, Parent or its Subsidiaries;
(xviii) enter into any material transaction with any of its Affiliates (other than the Company and its Subsidiaries) other than pursuant to written arrangements in effect on the date of this Agreement and excluding any employment, compensation or similar arrangements otherwise permitted pursuant to this Section 5.01(a);
(xix) transfer or make available to a third party any material research materials or material Intellectual Property, or transfer or make available to any third party any Pharmaceutical Product or product candidate owned by the Company or any Subsidiary of the Company or being studied in a Company or Subsidiary research program, except (A) as set forth in Section 5.01(a) of the Company Disclosure Schedule or (B) pursuant to any applicable written agreement investigations in the ordinary course of business;
(xxL) take adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization;
(M) except to the extent permitted under clause (N) below, change any method of reporting income, deductions or omit other items for income or franchise tax purposes, make or change any material election with respect to takeTaxes, agree to an extension or waiver of the limitation period to any claim or assessment in respect of Taxes, or make or rescind any Tax election or settle or compromise any material claim or material assessment in respect of Taxes;
(N) make any action that adversely affects change in any material respectmethod of accounting or accounting practice or policy, except as required by any changes in applicable generally accepted accounting principles;
(O) enter into any agreement, understanding or would reasonably be expected commitment that restrains, limits or impedes the Company's or any of its subsidiaries' ability to adversely compete with or conduct any business or line of business;
(P) plan, announce, implement or effect any reduction in force program, lay-off program, early retirement program, severance program or other program concerning the termination of employment of employees of the Company or any material respect, subsidiary;
(Q) other than pursuant to agreements or arrangements between the Company and any material patent subsidiary of the Company or patent application, agreements or abandon or permit to lapse any right to any material patent or patent applicationarrangements between subsidiaries of the Company, in each case, in the ordinary course of the Company or business consistent with past practice, enter into any of its SubsidiariesAffiliate Transactions; or
(xxiR) authorize any of, or commit or agree to take any of, the foregoing actionsactions in respect of which it is restricted by the provisions of this Section 4.1.
Appears in 1 contract
Conduct of Business of the Company and its Subsidiaries. (a) Except as set forth in Section 5.01(a) of the Company Disclosure Schedule, contemplated by this Agreement, required by Law or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during During the period from the date hereof and continuing until the earlier of the termination of this Agreement to and the Effective TimeClosing, unless otherwise approved by Purchaser in writing or expressly contemplated herein or in any Related Agreement:
(a) Seller shall cause the Company shall, and shall cause each Subsidiary of its Subsidiaries to, carry on its the Company to conduct their business in the usual, regular and ordinary course andin the best interests of the Company and its stockholders and in substantially the same manner as heretofore conducted;
(b) Seller shall cause the Company and each Subsidiary of the Company to, (i) pay all of their debts and Taxes when due, except to the extent consistent therewithsuch debts or Taxes are being contested in good faith by appropriate proceedings and for which adequate reserves according to GAAP have been set up, (ii) pay or perform their other undisputed obligations when due, and (iii) use commercially reasonable best efforts to preserve substantially intact its current their present business organizations, to keep available the services of its current present officers and key employees and to preserve its relationships with significant customers, suppliers, distributors, licensors, licensees, distributors, lessors and others having significant business dealings with it. Without limiting , to the generality end that their goodwill and ongoing businesses shall remain unimpaired at the Closing;
(c) Seller shall promptly notify Purchaser of any change, occurrence or event not in the ordinary course, that becomes known to Seller, of the foregoing, except as set forth in Section 5.01(a) business of the Company Disclosure Schedule, contemplated by this Agreement, required by Law (including, as applicable, Section 409A of the Code) or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to:
(i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock, other than dividends or distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent and other than as required pursuant to the Rights Agreement;
(ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in lieu of or in substitution for shares of its capital stock;
(iii) purchase, redeem or otherwise acquire any shares of its capital stock or any rights, warrants or options to acquire any such shares, other than (A) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of the Company Stock Options or as required pursuant to the terms of the ESPP, (B) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Incentive Plans and (C) the acquisition by the Company of Company Stock Options, Company Restricted Stock Units and shares of Company Restricted Stock in accordance with their terms in effect as of the date of this Agreement in connection with the forfeiture of such awards;
(iv) issue, deliver or sell any shares of its capital stock, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, other than (A) upon the exercise of Company Stock Options and rights under the ESPP outstanding on the date of this Agreement, in each case in accordance with their present terms, (B) upon the vesting of Company Restricted Stock Units outstanding on the date of this Agreement, in accordance with their present terms, (C) as required to comply with any Company Benefit Plan as in effect on the date of this Agreement, (D) upon the conversion of the Convertible Notes outstanding on the date of this Agreement, in accordance with their present terms and (E) the issuance of Rights and the issuance of Company Common Stock or Preferred Stock of the Company upon the exercise of Rights, in each case, pursuant to the terms and conditions of the Rights Agreement;
(v) amend the Company Certificate of Incorporation or the Company Bylaws or the comparable organizational documents of any Subsidiary of the Company;
(vi) merge or consolidate with, or purchase an equity interest in or a substantial portion of the assets of, any person or any division or business thereof other than purchases of assets where the amount of the consideration paid or transferred by the Company and its Subsidiaries in connection with all such transactions does not exceed one million dollars ($1,000,000) in the aggregate;
(vii) assign, sublease, terminate, waive any material rights under, or materially amend any Lease, or sell, lease or otherwise dispose of any of its properties change, occurrence or assets with an aggregate value in excess of one million dollars ($1,000,000)event which, other than sales of inventory and other assets (other than Owned Real Property individually or Leased Real Property) in the ordinary course of business;
(viii) (A) incur any indebtedness for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any such indebtedness or any debt securities of another person or enter into any “keep well” or other agreement to maintain any financial statement condition of another person (collectively, “Indebtedness”), other than (1) Indebtedness incurred, assumed or otherwise entered into in the ordinary course of business (including any borrowings under the Company’s existing credit facilities and in respect of letters of credit) for additional amounts after the date hereof not in excess of five million dollars ($5,000,000) in the aggregate and (2) Indebtedness incurred in connection with the refinancing of any Indebtedness existing on the date of this Agreement or permitted to be incurred, assumed or otherwise entered into hereunder; or (B) make any loans or capital contributions to, or investments in, any other person;
(ix) make any capital expenditureschanges, other than in accordance with the Company’s capital expenditures plan as set forth on Section 5.01(a) of the Company Disclosure Schedule;
(x) settle any (A) material claim or material litigationoccurrences and events, in each case made or pending against the Company or any of its Subsidiaries, other than any payment, discharge, settlement or satisfaction where no non-monetary obligations are imposed on the Company or its Subsidiaries or would apply could reasonably be expected to Parent or its Subsidiaries and where the amounts paid or to be paid (i) are covered by insurance coverage maintained by the Company or (ii) in an amount less than one million dollars ($1,000,000), individually, and five million dollars ($5,000,000), in the aggregate or (B) any investigation by any Governmental Entity by agreeing to a material fine or penalty or non-monetary obligations;
(xi) except as required pursuant to the terms of any Company Benefit Plan or other written agreement, in each case, in effect on the date of this Agreement, (1) grant to any officer, director or employee of the Company or any of its Subsidiaries any increase in compensation (other than increases in the ordinary course of business that are not material for employees who are not executive officers of the Company or any of its Subsidiaries), (2) grant to any officer, director or employee of the Company or any of its Subsidiaries any change in control, severance, retention or termination compensation or benefits, or any increase in change in control, retention, severance or termination compensation or benefits, (3) enter into any employment, consulting, severance, termination, retention or change in control agreement with any officer, director or employee of the Company or any of its Subsidiaries, (4) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or any plan, agreement or arrangement which, if in effect on the date of the Agreement, would constitute a Company Benefit Plan or (5) accelerate any rights or benefits, or make any material determinations, under any Company Benefit Plan; provided, however, that the foregoing clauses (1), (2), and (3) shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees or sales representatives or to employees or sales representatives in the context of promotions based on job performance or workplace requirements, in each case in the ordinary course of business, or pursuant to existing plans, agreements, benefits and compensation arrangements and incentive grants (excluding any plans, agreements, arrangements or grants pursuant to which compensation or benefits are payable based wholly or partially on the occurrence of a change in control) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees or sales representatives in similar positions;
(xii) make any material change in accounting methods, principles or practices affecting the consolidated assets, liabilities or results of operations of the Company, other than as required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including Regulation S-X under the Securities Act;
(xiii) except as consistent with past practice, make any material Tax election, file any amended Tax Return with respect to any material Tax, change any annual Tax accounting period, settle or compromise any material Tax audit, enter into any material closing agreement, surrender any right to claim a material refund of Taxes or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiaries;
(xiv) except as required pursuant to this Agreement or the terms of the applicable agreement covering the indebtedness to be repaid to which Material Adverse Effect on the Company or any Subsidiary is a party as in effect as of the date hereof, pre-pay any long-term debt (which shall be deemed to include pre-payments or repayments of lines of credit facilities or other similar lines of credit or payments made in respect of any termination or settlement of any interest rate swap or other similar hedging instrument relating thereto other than currency or commodity swaps or hedging instruments entered into in the ordinary course of business as described in Section 5.01(a) of the Company Disclosure Schedule);
(xv) amend, modify, cancel, terminate or waive or release any material right under any Company Material Contract or enter into any new contract, agreement or arrangement that, if entered into prior to the date of this Agreement, would be a Company Material Contract, where such action or omission would or would reasonably be expected, individually or in the aggregate, to (A) have a Material Adverse Effect, (B) impair in any material respect the ability of the Company or its Subsidiaries which is reasonably likely to perform its obligations under this Agreement, (C) prevent or materially impede, interfere with, hinder or delay the consummation of cause any of the transactions contemplated by this Agreement or conditions to closing set forth in Article 5 not to be satisfied; and
(Dd) impair in any material respect Seller shall, and shall cause the ability Company and each Subsidiary of the Company and its Subsidiaries to conduct their business as currently conducted;
(xvi) create any subsidiary of the Company to, assure that each Contract entered into on or otherwise alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiaries;
(xvii) renew or enter into any noncompete or material exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries or, after the Share Acceptance Date, Parent or its Subsidiaries;
(xviii) enter into any material transaction with any of its Affiliates (other than the Company and its Subsidiaries) other than pursuant to written arrangements in effect on the date of this Agreement and excluding any employment, compensation or similar arrangements otherwise permitted pursuant to this Section 5.01(a);
(xix) transfer or make available to a third party any material research materials or material Intellectual Property, or transfer or make available to any third party any Pharmaceutical Product or product candidate owned hereof by the Company or any Subsidiary of the Company will not require the procurement of any consent, waiver or being studied novation or provide for any material change in the obligations of any party in connection with, or terminate as a Company or Subsidiary research program, except (A) as set forth in Section 5.01(a) result of the Company Disclosure Schedule or (B) pursuant to any applicable written agreement in the ordinary course of business;
(xx) take (or omit to take) any action that adversely affects in any material respect, or would reasonably be expected to adversely effect in any material respect, any material patent or patent application, or abandon or permit to lapse any right to any material patent or patent application, in each case, of the Company or any of its Subsidiaries; or
(xxi) authorize any of, or commit or agree to take any consummation of, the foregoing actionstransactions contemplated by this Agreement.
Appears in 1 contract
Conduct of Business of the Company and its Subsidiaries. (a) Except as set forth in Section 5.01(a) of the Company Disclosure Schedule, contemplated by this Agreement, required by Law or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during 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, the Company shall, agrees to use commercially reasonable efforts to operate the business of the Company and shall cause each of its Subsidiaries to, carry on its business in the usual, regular and ordinary course andin substantially the same manner as heretofore conducted, except as expressly contemplated by this Agreement or otherwise consented to the extent consistent therewithby Parent in writing (which consent shall not be unreasonably withheld, use reasonable best efforts to preserve substantially intact its current business organizationsdelayed or conditioned). In addition, to keep available the services of its current officers and employees and to preserve its relationships with significant customers, suppliers, licensors, licensees, distributors, lessors and others having significant business dealings with it. Without without limiting the generality of the foregoing, except as expressly set forth in Section 5.01(a) 4.1 of the Company Disclosure Schedule, contemplated by this Agreement, required by Law (including, as applicable, Section 409A Schedule of the Code) or consented to in writing by Parent (such consents not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective TimeExceptions, the Company shall not, and the Company shall ensure that none of its Subsidiaries shall, without the prior written consent of Parent (which consent shall not permit be unreasonably withheld, delayed or conditioned):
(a) make any expenditures or enter into any commitment or transaction not in the ordinary course of business consistent with past practice that exceeds $25,000 individually or $50,000 in the aggregate;
(b) (i) sell, license or otherwise assign or convey to any Person any rights to any Company Intellectual Property or enter into any Contract with respect to any of the foregoing with any Person (other than the sale of certain Patents on the terms identified on Schedule 4.1), (ii) buy or license any Intellectual Property or enter into any Contract with respect to the Intellectual Property of any Person (other than the sale of certain Patents on the terms identified on Schedule 4.1), (iii) enter into any Contract with respect to the development of any Intellectual Property with a third-party except in the ordinary course of business, or (iv) materially change pricing or royalties charged by the Company to its existing customers or licensees, or the pricing or royalties set or charged by Persons who have licensed Intellectual Property to the Company or any of its Subsidiaries to:Subsidiaries, except in the case of clauses (i) and (ii), with respect to non-exclusive end user licenses of object code in the ordinary course of business;
(c) enter into or materially amend any Contract pursuant to which any other party is granted marketing, distribution, development or similar rights of any type or scope with respect to any products, technology or services of the Company or any of its Subsidiaries;
(d) enter into any other Contract that would have been required to have been disclosed on Section 2.14 of the Schedule of Exceptions had such Contract been entered into prior to the date of this Agreement;
(e) amend or otherwise modify (or agree to do so) any material Contract required to be set forth or described in the Schedule of Exceptions (or that would have been required to be set forth or described in the Schedule of Exceptions if it had existed prior to the date of this Agreement);
(f) commence or settle any litigation, action, suit or proceeding other than (i) for the routine collection of bills, (ii) in such cases where it in good faith determines that failure to commence an action, suit or proceeding would result in the material impairment of a valuable aspect of its business; (provided that the Company shall consult with Parent prior to the commencing of such action, suit or proceeding) and (iii) to enforce its rights under this Agreement;
(g) declare, set aside aside, or pay any dividends on, on or make any other distributions (whether in cash, stock or property) in respect of, of any shares of capital stock of the Company or any of its capital stock, other than dividends or distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent and other than as required pursuant to the Rights AgreementSubsidiaries;
(iih) split, combine or reclassify any of its capital stock Company 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;
(iii) purchaseCompany Capital Stock, or repurchase, redeem or otherwise acquire acquire, directly or indirectly, any shares of its capital stock Company Capital Stock (or any rightsoptions, warrants or options to acquire any such shares, other than (Arights exercisable therefor) except in accordance with this Agreement and the acquisition by the agreements evidencing Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of the Company Stock Options or as required pursuant to the terms of the ESPP, (B) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Incentive Plans and (C) the acquisition by the Company of Company Stock Options, Company Restricted Stock Units Warrants and shares of Company Restricted Stock in accordance with their terms in effect outstanding as of the date of this Agreement in connection with the forfeiture of such awardsAgreement;
(ivi) issue, grant, deliver or sell or authorize or propose the issuance, grant, delivery or sale of, or purchase or propose the purchase of, any shares of capital stock of the Company or any of its capital stock, any other voting securities Subsidiaries or any securities convertible intointo such shares, or any subscriptions, rights, warrants or options to acquire, or other Contracts or commitments of any character obligating it to issue or purchase any such shares, voting securities shares or other convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, other than (Ai) upon the exercise issuances of Company Capital Stock pursuant to exercises of Company Options and rights under the ESPP outstanding on the date of this Agreement, in each case in accordance with their present termscurrently outstanding, (Bii) upon issuance of Company Capital Stock pursuant to exercises of Company Warrants currently outstanding and (iii) the vesting repurchase by the Company of shares of Company Restricted Stock Units outstanding on the date or Company Capital Stock issued upon exercise of this Agreement, in accordance with their present terms, (C) as required to comply with any a Company Benefit Plan as in effect on the date of this Agreement, (D) Option upon the conversion termination of the Convertible Notes outstanding on the date employment or other relationship triggering a right of this Agreement, in accordance with their present terms and (E) the issuance of Rights and the issuance of Company Common Stock or Preferred Stock of repurchase by the Company upon the exercise or of Rights, in each case, forfeiture pursuant to the terms and conditions of the Rights Agreementagreement relating to such Company Restricted Stock or Company Option;
(vj) amend the Company Certificate of Incorporation cause or the Company Bylaws permit any amendments to any Charter Documents or the comparable any organizational documents of any Subsidiary of the Company Subsidiaries, including without limitation certificates of incorporation, certificates of formation, articles of organization, bylaws and other documents of the like (other than to amend its Certificate of Incorporation solely to (i) waive any notice or similar requirements triggered by the Merger and/or (ii) provide that, notwithstanding anything to the contrary in the Company’s Certificate of Incorporation, the Merger consideration will be distributed as set forth in this Agreement and the indemnity and escrow obligations will be as set forth in the Merger Agreement);
(vik) merge (i) acquire or consolidate agree to acquire by merging or consolidating with, or purchase an by purchasing any assets or equity interest in or a substantial portion of the assets securities of, or by any person other manner, any business or any corporation, partnership, association or other business organization or division thereof, or business thereof (ii) otherwise acquire or agree to acquire any assets other than purchases of assets where the amount of the consideration paid or transferred by the Company and its Subsidiaries in connection with all such transactions does not exceed one million dollars ($1,000,000) in the aggregateordinary course of business consistent with past practice;
(viil) assign, sublease, terminate, waive any material rights under, or materially amend any Lease, or sell, lease lease, license or otherwise dispose of any of its properties or assets with an aggregate value in excess of one million dollars ($1,000,000)assets, other than sales of inventory and other assets (other than Owned Real Property or Leased Real Property) in including the ordinary course of business;
(viii) (A) incur any indebtedness for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any such indebtedness or any debt securities of another person or enter into any “keep well” or other agreement to maintain any financial statement condition of another person (collectively, “Indebtedness”), other than (1) Indebtedness incurred, assumed or otherwise entered into in the ordinary course of business (including any borrowings under the Company’s existing credit facilities and in respect of letters of credit) for additional amounts after the date hereof not in excess of five million dollars ($5,000,000) in the aggregate and (2) Indebtedness incurred in connection with the refinancing sale of any Indebtedness existing on the date accounts receivable of this Agreement or permitted to be incurred, assumed or otherwise entered into hereunder; or (B) make any loans or capital contributions to, or investments in, any other person;
(ix) make any capital expenditures, other than in accordance with the Company’s capital expenditures plan as set forth on Section 5.01(a) of the Company Disclosure Schedule;
(x) settle any (A) material claim or material litigation, in each case made or pending against the Company or any of its Subsidiaries, other than any payment, discharge, settlement or satisfaction where no non-monetary obligations are imposed on the Company or its Subsidiaries or would apply to Parent or its Subsidiaries and where the amounts paid or to be paid (i) are covered by insurance coverage maintained by the sale or license of Company or (ii) in an amount less than one million dollars ($1,000,000), individually, and five million dollars ($5,000,000), in the aggregate or (B) any investigation by any Governmental Entity by agreeing to a material fine or penalty or non-monetary obligations;
(xi) except as required pursuant to the terms of any Company Benefit Plan or other written agreement, in each case, in effect on the date of this Agreement, (1) grant to any officer, director or employee of the Company or any of its Subsidiaries any increase in compensation (other than increases Products in the ordinary course of business that are not material for employees who are not executive officers consistent with past practice or (ii) the sale of certain Patents on the Company terms identified on Schedule 4.1;
(m) incur any Indebtedness, guarantee any Indebtedness, issue or sell any debt securities or guarantee any debt securities of its Subsidiaries), others;
(2n) grant any loans to any officer, director others or employee purchase debt securities of the Company or any of its Subsidiaries any change in control, severance, retention or termination compensation or benefits, or any increase in change in control, retention, severance or termination compensation or benefits, (3) enter into any employment, consulting, severance, termination, retention or change in control agreement with any officer, director or employee of the Company or any of its Subsidiaries, (4) establish, adopt, enter into others or amend in the terms of any material respect any collective bargaining outstanding loan or similar agreement or any plan, agreement or arrangement which, if in effect on other than the date advance of the Agreement, would constitute a Company Benefit Plan or (5) accelerate any rights or benefits, or make any material determinations, under any Company Benefit Plan; provided, however, that the foregoing clauses (1), (2), and (3) shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees or sales representatives or to employees or sales representatives in the context of promotions based on job performance or workplace requirements, in each case reasonable business expenses incurred in the ordinary course of business, or pursuant to existing plans, agreements, benefits and compensation arrangements and incentive grants (excluding any plans, agreements, arrangements or grants pursuant to which compensation or benefits are payable based wholly or partially on the occurrence of a change in control) that have a value that is business consistent with the past practice of making compensation and benefits available to newly hired or promoted employees or sales representatives in similar positionspractices;
(xiio) make grant any material change severance or termination pay (in accounting methodscash or otherwise) to any Company Personnel, principles or practices affecting the consolidated assetsincluding any officer, liabilities or results of operations except pursuant to a Contract disclosed in Section 2.14 of the CompanySchedule of Exceptions and except as required by Section 5.18 of this Agreement;
(p) except as required by Section 5.5 of this Agreement or as otherwise set forth on Schedule 4.1(p), adopt, amend or modify any Company Employee Plan (including any underlying Contracts), enter into, materially amend or modify any employment contract or equity award agreement, pay or agree to pay any bonus or special remuneration (including payment of Taxes or Tax gross up) to any Company Personnel or other service provider, or increase the salaries, wage rates, or other compensation of Company Personnel;
(q) except as required by GAAP, revalue any of its assets (whether tangible or intangible), including writing down the value of inventory or writing off notes or accounts receivable, other than as required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations in the ordinary course of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including Regulation S-X under the Securities Act;
(xiii) except as business consistent with past practice;
(r) pay, discharge or satisfy, in an amount in excess of $25,000 in any one case, or $50,000 in the aggregate, any claim, Indebtedness or other Liability, other than in the ordinary course of business consistent with past practice other than the repayment of Indebtedness identified on Schedule 4.1;
(s) make or change any material Tax electionelection in respect of Taxes, file any amended Tax Return with respect to any material Tax, adopt or change any annual accounting method, amend any Tax accounting period, settle or compromise any material Tax auditReturn, enter into any material closing agreement, surrender settle any right to claim a material refund or assessment in respect of Taxes Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any in respect of its SubsidiariesTaxes;
(xivt) except as required pursuant to this Agreement enter into joint venture, strategic alliance or the terms of the applicable agreement covering the indebtedness to be repaid to which the Company joint marketing or any Subsidiary is a party as in effect as of the date hereof, pre-pay any long-term debt (which shall be deemed to include pre-payments similar arrangement or repayments of lines of credit facilities or other similar lines of credit or payments made in respect of any termination or settlement of any interest rate swap or other similar hedging instrument relating thereto other than currency or commodity swaps or hedging instruments entered into in the ordinary course of business as described in Section 5.01(a) of the Company Disclosure Schedule)Contract;
(xvu) amend, modify, cancel, terminate or waive or release take any material right under any Company Material Contract or enter into any new contract, agreement or arrangement that, if entered into prior action to accelerate the date of this Agreement, would be a Company Material Contract, where such action or omission would or would reasonably be expected, individually or in the aggregate, to (A) have a Material Adverse Effect, (B) impair in any material respect the ability of the Company or its Subsidiaries to perform its obligations under this Agreement, (C) prevent or materially impede, interfere with, hinder or delay the consummation vesting schedule of any of the transactions contemplated by this Agreement outstanding Company Options or (D) impair in any material respect shares of Company Restricted Stock other than the ability acceleration of the vesting of certain Company and its Subsidiaries to conduct their business Options as currently conductedset forth on Schedule 4.1;
(xviv) create hire or terminate any subsidiary of the Company or otherwise alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiaries;
(xvii) renew or enter into any noncompete or material exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries or, after the Share Acceptance Date, Parent or its Subsidiaries;
(xviii) enter into any material transaction with any of its Affiliates Personnel (other than the termination of any Company and its Subsidiaries) other than pursuant to written arrangements in effect on the date of this Agreement and excluding any employment, compensation or similar arrangements otherwise permitted pursuant to this Section 5.01(aPersonnel for cause);
(xix) transfer or make available to a third party any material research materials or material Intellectual Property, or transfer or make available encourage any Company Personnel to any third party any Pharmaceutical Product or product candidate owned by the Company or any Subsidiary of the Company or being studied in a Company or Subsidiary research program, except (A) as set forth in Section 5.01(a) of the Company Disclosure Schedule or (B) pursuant to any applicable written agreement in the ordinary course of business;
(xx) take (or omit to take) any action that adversely affects in any material respect, or would reasonably be expected to adversely effect in any material respect, any material patent or patent application, or abandon or permit to lapse any right to any material patent or patent application, in each case, of resign from the Company or any of its Subsidiaries; or
(xxiw) authorize any oftake, or commit agree in writing or agree otherwise to take take, any of, of the foregoing actionsactions described in Sections 4.1(a) through 4.1(v).
Appears in 1 contract
Samples: Merger Agreement (Vistaprint N.V.)
