Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizations, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed): (a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans; (b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice; (c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances; (d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses. (e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto); (f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company; (g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules; (h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement; (i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement; (j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank; (k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof; (l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee; (m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law; (n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41 (o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or (p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it; (q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation; (r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries. (s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 3 contracts
Samples: Merger Agreement (Open Market Inc), Merger Agreement (Divine Inc), Merger Agreement (Open Market Inc)
Conduct of Business of the Company. During Except (a) as described in Section 6.1 of the Company Disclosure Letter, (b) as required by applicable Law, (c) as consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed) or (d) as required or expressly provided for by this Agreement, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective Time, (x) the Company (which for the purposes of this SECTION 6.1 shall include the Company will conduct and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to will cause each of its Subsidiaries to carry on conduct its business in the usual, regular all material respects according to its ordinary and ordinary courseusual course of business consistent with past practice, and to the Company will use and will cause each of its Subsidiaries to use all its commercially reasonable efforts consistent with past practices and policies to preserve intact its business organization and to preserve the present relationships with those Persons having significant business organizations, keep available relationships with the services Company or any of its present officers Subsidiaries; provided that, with respect to clause (d), during any period of full or partial suspension of operations related to COVID-19 or any Public Health Measures, the Company or any of its Subsidiaries may, in connection with COVID-19 or any Public Health Measures, take such actions as are reasonably necessary (i) to protect the health and safety of the Company’s or its Subsidiaries’ employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others other individuals having business dealings with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at or (ii) to respond to third-party supply or service disruptions caused by COVID-19 or any Public Health Measures, subject to prior consultation with Parent to the Effective Time. Except as expressly provided for by this Agreementextent reasonably practicable, and (y) without limiting the Credit Agreement, generality of the Security Agreement, or the Software Distribution Agreementforegoing, the Company shall will not, and shall will not permit any of its Subsidiaries to, prior :
(i) adopt any amendments to the Effective Time certificate of incorporation or earlier termination bylaws (or similar governing documents) of the Company or any of its Subsidiaries;
(ii) issue, sell, grant options or rights to purchase, pledge, or authorize or propose the issuance, sale, grant of options or rights to purchase or pledge, any Company Securities or Subsidiary Securities, other than Company Shares issuable upon exercise or settlement of Company Options, Company RSU Awards and Company PSU Awards, or, subject to Section 3.7(h), the purchase of Company Shares under the Company ESPP, in all cases, outstanding on the date hereof and in accordance with their respective existing terms;
(iii) acquire or redeem, directly or indirectly, or amend any Company Securities, other than (A) the acquisition by the Company of Company Shares in connection with the surrender of Company Shares by holders of Company Options outstanding on the date hereof in order to pay the exercise price of such Company Options, (B) the withholding of Company Shares to satisfy Tax obligations with respect to Company Equity Awards or (C) the acquisition by the Company of Company Equity Awards outstanding on the date hereof in connection with the forfeiture of such awards;
(iv) split, combine or reclassify its capital stock or declare, set aside, make or pay any dividend or distribution (whether in cash, stock or property) on any shares of its capital stock (other than dividends paid to the Company or one of its wholly owned Subsidiaries by a wholly owned Subsidiary of the Company with regard to its capital stock or other equity interests);
(v) (A) acquire, by means of a merger, consolidation, recapitalization or otherwise, any (1) material assets or (2) ownership interest in any Person or any business or division thereof, in each case, with a fair market value or purchase price in excess of $5,000,000 in the aggregate (other than, in each case, with respect to clauses (A)(1) and (A)(2), (i) capital expenditures in accordance with subclause (xi) below and (ii) purchases of components, raw materials or supplies, in each case with respect to this Agreement clause (ii), in the ordinary course of business consistent with past practice and that do not exceed $5,000,000 in the aggregate), (B) sell, lease, license, transfer or otherwise dispose of, or subject to any Lien (other than Permitted Liens), any material assets of the Company or any of its Subsidiaries (including material Company Intellectual Property Rights and shares in the capital stock of the Company or any of its Subsidiaries), except (1) pursuant to Contracts existing as of, and true, correct and complete copies of which have been made available to Parent and set forth in Section 6.1(y)(v)(B) of the Company Disclosure Letter, (2) dispositions of marketable securities in the ordinary course of business consistent with past practice, (3) transactions among the Company and its termswholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, without (4) for sales of inventory or abandonments of obsolete or worn-out equipment in the prior written consent ordinary course of Parent business and consistent with past practice and (which consent 5) with respect to Company Intellectual Property, the grant of non-exclusive licenses in the ordinary course of business and in the ordinary course of prosecution at any Intellectual Property office or registrar; provided, that the foregoing shall not be unreasonably withheld construed to include the abandonment of any issued or delayed):
granted material Company Registered Intellectual Property; or (aC) Except as provided in this Agreement adopt a plan of complete or as described in the Company Disclosure Schedulespartial liquidation, acceleratedissolution, amend recapitalization or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansrestructuring;
(bvi) Enter incur, assume or otherwise become liable or responsible for any indebtedness for borrowed money in excess of $5,000,000 in the aggregate;
(vii) make any loans, advances (other than for ordinary course business expenses or pursuant to the Company’s certificate of incorporation) or capital contributions to, any other Person (other than wholly owned Subsidiaries of the Company) in excess of $3,000,000 in the aggregate;
(viii) change any financial accounting methods, principles or practices used by it, except as required by GAAP or applicable Law;
(ix) (A) change any annual Tax accounting period or method, (B) make, change or revoke any material Tax election, (C) settle or compromise any audit or proceeding in respect of any material Tax Liabilities, except any ordinary-course extension or waiver of an applicable statute of limitations, (D) file any material amended Tax Return, (E) enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local, or non-U.S. Law) with respect to any material partnership arrangementsTax, joint development (F) surrender any right to claim a material Tax refund or (G) enter into any Tax indemnification, sharing, allocation, reimbursement or similar agreement, arrangement or understanding (other than any customary Tax indemnification provisions in ordinary course commercial agreements or strategic alliancesarrangements that are not primarily related to Taxes);
(x) except as required pursuant to a Plan in existence as of the date hereof, except (A) pay any amount or benefit under, or grant or promise to grant any awards under, any bonus, incentive, performance or other compensation plan, program, agreement or arrangement or Plan (including the grant of any Company Equity Award or other equity or equity-based awards); (B) provide for an increase in the compensation or benefits provided to any employee of the Company or any of its Subsidiaries or member of the Company Board, other than (1) increases in the ordinary course of business consistent with past practice for individuals with annualized base earnings of less than $200,000 and (2) the payment of bonuses or commissions for completed periods based on actual performance in the ordinary course of business consistent with past practice; (C) establish, adopt, enter into, materially amend or terminate any Plan or any collective bargaining or similar labor Contract (other than the entry into at-will offer letters or, for employees outside the United States, employment agreements that contain standard terms for the applicable jurisdiction with any individual with annualized base earnings of less than $200,000); (D) accelerate the time of payment or vesting of any compensation, rights or benefits, or make any material determinations under any Plan; (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Plan; (F) grant any employee, director or other service provider who is a natural person of or to the Company or its Subsidiaries change of control, severance, retention or termination compensation or benefits or provide for any increase thereto; (G) terminate the employment of any employee of the Company or any of its Subsidiaries with annualized base earnings of $150,000 or higher, other than terminations for cause (as determined by the Company in the ordinary course of business consistent with past practices); or (H) hire or promote any individual with annualized base earnings of $200,000 or higher, other than to replace a departed employee (whether by promotion or external hire) in the ordinary course of business consistent with past practice;
(cxi) Except as required by law make or authorize any existing benefit plans and agreements of the Company capital expenditures, or incur any of its Subsidiariesobligations, grant any severance Liabilities or termination pay (i) to any executive officer or (ii) to any other employee indebtedness in respect thereof, except payments made for (A) in connection with those contemplated by the termination of employees who are not executive officers in amounts consistent with capital expenditure budget for the Company's policies relevant fiscal year, which capital expenditure budget has been made available to Parent and past practices or (B) pursuant any unbudgeted capital expenditures, in an amount not to written agreements outstanding, or policies existing, on exceed $10,000,000 in the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstancesaggregate;
(dxii) Transfersettle any suit, license action, claim, proceeding or sell to any person or entity or otherwise extendinvestigation other than a settlement solely for monetary damages (net of insurance proceeds received) not in excess of $5,000,000 in the aggregate or, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding extent not otherwise restricted by the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as matter set forth on SECTION 6.1(GSection 6.1(y)(xii) of the Company Disclosure SchedulesLetter;
(hxiii) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements any transaction to the extent specifically permitted by any other subclause of this Section 6.1(y), (A) enter into any Contract that would, if entered into between prior to the Company and Silicon Valley Bankdate hereof, be a Material Contract or a Real Property Lease, (B) materially modify, materially amend or terminate (other than expirations in accordance with its terms) any Material Contract or Real Property Lease or waive, release or assign any material rights or claims thereunder or (C) lease, sublease or license any portion of Real Property;
(kxiv) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant abandon, cancel, allow to existing credit facilities in lapse, fail to renew, fail to maintain, subject to the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities commercially reasonable judgment of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices)practice, including but not limited fail to (but without limiting the generality of the foregoing)diligently pursue applications filed at any Intellectual Property office for or fail to defend, the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one each case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the material Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except Registered Intellectual Property for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has controls the prosecution or maintenance thereof;
(xv) initiate or commit to undertake any rightsnew clinical trials other than exploratory clinical trials in indications that are agreed upon between Parent and the Company;
(xvi) adopt or implement any stockholder rights plan or similar arrangement; or
(xvii) authorize, and will use agree or commit, in writing or otherwise, to take any of the foregoing actions. Notwithstanding the foregoing, nothing in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the business or operations of the Company or its best efforts to enforce or cause to be enforced each such agreement Subsidiaries at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months any time prior to the date Effective Time. Prior to the Effective Time, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiariescomplete control and supervision over their own business and operations.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 3 contracts
Samples: Merger Agreement (Johnson & Johnson), Merger Agreement (Abiomed Inc), Merger Agreement (Johnson & Johnson)
Conduct of Business of the Company. During Except as expressly contemplated by this Agreement, or in Section 5.1 of the Disclosure Schedule, or to the extent that the Investors shall otherwise consent in writing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective TimeClosing, the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)withheld, to carry on its business the Company shall, and to shall cause each member of its Subsidiaries the Company Group to carry on (i) conduct its business in the usual, regular and ordinary coursecourse in substantially the same manner as heretofore conducted, (ii) pay its debts and Taxes when due, subject to good-faith disputes over such debts or Taxes, (iii) pay or perform other material obligations when due (including accounts payable), subject to good-faith disputes over such obligations, (iv) observe in all material respects all provisions of, and to perform in all material respects all its obligations under, any Contract, (v) use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizations, (vi) use commercially reasonable efforts to keep available the services of its present officers and employees and key employees, (vii) use commercially reasonable efforts to preserve its the relationships with its material customers, suppliers, distributors, licensors, licensees, licensees and others having material business dealings with them, and (viii) use commercially reasonable efforts to enter into legally binding agreements incorporating all material terms and conditions of any new material arrangement, obligation, commitment or undertaking of any nature relating to any new or existing customer, supplier, distributor, licensor, licensee or Person with whom any member of the Company or Group has any such Subsidiariesmaterial business dealings, to all with the end that goal of preserving unimpaired the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that Group at the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Closing. The Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect promptly notify Investors upon becoming aware of any of its capital stock, event or split, combine occurrence or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, emergency which is material and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any member of the Company Group or any event having a Material Adverse Effect involving any member of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at Group that arises during the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to period from the date of this AgreementAgreement and continuing until the earlier of the termination date of this Agreement or the Closing. Furthermore, a confidentiality agreement the Company shall promptly notify Investors in writing of any notice or other communication from any third party alleging that the consents, waiver or approval of such third party is or may be required in connection with such Person's consideration the execution, delivery or performance of a possible Acquisition Transaction this Agreement or equity any Related Agreement or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf consummation of the Company or any of its Subsidiaries.
(s) Taketransactions contemplated hereby and thereby. All notices, or agree request for consents and other communications pursuant to Sections 5.1 and 5.2 shall be in writing or otherwise to take, any of the actions described and delivered in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedaccordance with Section 10.7 hereof.
Appears in 3 contracts
Samples: Share Purchase Agreement (Retalix LTD), Share Purchase Agreement (Retalix LTD), Share Purchase Agreement (Retalix LTD)
Conduct of Business of the Company. During the period from the date of Except as expressly permitted by this Agreement and continuing until the earlier Agreement, as required by Applicable Law or Domicile SAP, as set forth in Section 5.1 of the termination of this Agreement pursuant to its terms and the Effective TimeCedent Disclosure Schedule, the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall as Reinsurer otherwise consent consents in writing (which consent shall not be unreasonably withheld withheld, conditioned, or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business ) or in the usual, regular and ordinary course, and event Reinsurer fails to use and cause each of its Subsidiaries respond to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizations, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided a written request for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent within five (which consent shall not be unreasonably withheld or delayed):
(a5) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any Business Days after receipt of such plans;
(b) Enter into any material partnership arrangementsrequest, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to from the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant Agreement to the exercise of Company Rights or Company Series E Preferred StockClosing Date, stock options or warrants outstanding as of Cedent shall operate the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except Business in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between and use commercially reasonable efforts to preserve intact the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities current relationships of the Company or any of Business with its Subsidiaries or guarantee any debt securities of othersemployees, except in each case pursuant to existing agreements entered into between policyholders, Insurance Regulators and others having material relationships with the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without Business. Without limiting the generality of the foregoing), from the adoption date of this Agreement to the Closing Date, except as expressly permitted by this Agreement, as required by Applicable Law or amendment Domicile SAP, as set forth in Section 5.1 of the Cedent Disclosure Schedule, as Reinsurer otherwise consents in writing (which consent shall not, other than with respect to clauses (e) or (g) of this Section 5.1, be unreasonably withheld, conditioned, or delayed) or in the event Reinsurer fails to respond to a written request for consent within five (5) Business Days after receipt of such request, Cedent shall not, and shall not cause or permit any stock purchase of its Affiliates to, do any of the following without the consent of Reinsurer:
(a) make any material change in the conduct of the Business, including the licensure of Cedent as an insurer or option planreinsurer in the State of Delaware, Commonwealth of Virginia or change the entering into Domicile of any employment contract or Cedent to the payment State of any special bonus or special remuneration to any director or employeeNew York;
(mb) Revalue make any of material change in the assets of accounting, actuarial, financial reporting, reserving or claims administration policies, practices, or principles used in connection with the Company Business;
(c) (A) waive or release any of its Subsidiaries, including without limitation writing down material claim or litigation or waive any material right with respect to the value of inventory, writing off notes or accounts receivableBusiness, other than in the ordinary course of business consistent with past practice practice, or as required by GAAP (B) enter into any settlement or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or release with respect to any bonus Action or special remuneration, other than Order with respect to the payment, discharge or satisfaction Business (except for claims under Reinsured Policies in the ordinary course of business consistent with past practice and within applicable policy limits), unless such settlement or release contemplates only the payment of liabilities money without ongoing limits on the conduct or operation of the type reflected Business;
(d) abandon, modify, waive or reserved against terminate any material Permit to the extent used in the Company Financial Statements Business;
(e) (A) amend, terminate (or consent to the termination of), waive any material rights under or, other than pursuant to its current terms and in the notes thereto); 41
ordinary course of business consistent with past practice, renew or extend, any Ceded Reinsurance Agreements with respect to the Reinsured Policies or settle any disputes thereunder to the extent that any such actions relate in whole or in part to the Reinsured Policies or (oB) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreementnew reinsurance agreement that would constitute a Ceded Reinsurance Agreement with respect to any Reinsured Policy or, settle in each case, cause or permit GLIC, GLICNY, Jamestown, RLI or RLII to take any claim such action;
(f) except in the ordinary course of business consistent with past practice, make any material changes in the terms or assessment in policies with respect of Taxes (except settlements effected solely through to the payment of immaterial sums of money), commissions or consent other compensation to any extension Producers with respect to the Business;
(g) terminate, recapture any liabilities ceded under, commute, modify, supplement, amend or waiver waive compliance with any material provision of the limitation period applicable to any claim or assessment in respect of TaxesAssumed Reinsurance Agreements; or
(ph) Except for any change which is required by reason of enter into a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar binding agreement to which take any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiariesforegoing actions.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 2 contracts
Samples: Master Agreement (Protective Life Corp), Master Agreement (Genworth Financial Inc)
Conduct of Business of the Company. During Except as contemplated by this Agreement, with the prior written consent of Parent or as set forth on Schedule 6.1 of the Company Disclosure Letter, during the period from the date of this Agreement and continuing until to the earlier of the Effective Time or termination of this Agreement pursuant to in accordance with its terms and the Effective Timeterms, the Company shall (which for the purposes of this SECTION 6.1 and shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on to) conduct its business and its Subsidiaries’ operations only in the usual, regular ordinary course of business consistent with past practice and ordinary course, shall (and to use and shall cause each of its Subsidiaries to to) use all commercially its reasonable best efforts consistent with past practices and policies to preserve intact the business organization of the Company and its present business organizations, keep available Subsidiaries and to preserve the services goodwill of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, suppliers and others all other Persons having business dealings relationships with the Company and its Subsidiaries. Without limiting the generality of the foregoing, and except as otherwise contemplated by this Agreement and the Merger or any such Subsidiariesas set forth on Schedule 6.1 of the Company Disclosure Letter, prior to the end that Closing Date, the goodwill Company shall not (and ongoing businesses of Company and shall cause each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit to) do any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, following without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayedwithheld):
(a) Except as provided adopt or propose any change in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansits organizational documents;
(b) Enter into engage in any material partnership arrangementstransaction (including capital expenditures) outside of the ordinary course of business that would require expenditures by the Surviving Corporation, joint development agreements Parent or strategic alliancesany of Parent’s Subsidiaries in excess of $2,500,000 per annum or $5,000,000 in the aggregate;
(c) issue, reissue, sell, grant, pledge or otherwise encumber, or authorize the issuance, reissuance, sale, grant, pledge or other encumbrance of shares of Company Capital Stock, or securities convertible into capital stock of any class of the Company, or any rights, warrants or options to acquire any convertible securities or capital stock of the Company, other than (i) the issuance of Company Common Stock upon the vesting, settlement, exercise or lapse of restrictions on any Company Equity Awards outstanding on the date hereof and (ii) the grant of Company Equity Awards in accordance with the terms of the Company Disclosure Letter;
(d) except as required or contemplated by Applicable Law or the terms of any Company Plan or Contract as in effect on the date hereof, (i) pay or provide any incentive compensation or bonuses, or increase the compensation or benefits payable or provided to any current or former director, officer, employee or independent contractor, other than any such increases made in the ordinary course of business and consistent with past practice for employees whose total annual compensation does not exceed $300,000, (ii) grant or pay to any current or former director, officer, employee or independent contractor any severance, change in control or termination pay, or modifications thereto or increases therein, (iii) pay any benefit or grant or amend any award (including in respect of stock options, stock appreciation rights, performance units, restricted stock or other stock-based or stock-related awards or the removal or modification of any restrictions in any Company Plan or awards made thereunder), (iv) adopt, enter into, amend, modify or terminate any collective bargaining agreement or other labor union contract, (v) take any action to accelerate the vesting or payment of any compensation or benefit (including in respect of Company Equity Awards) under any Company Plan or awards made thereunder or other Contract with any current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries, other than as required pursuant to this Agreement, (vi) amend or terminate any, or enter into or adopt any new, Company Plan for the benefit of any current or former directors, officers, employees or independent contractors of the Company or any of its Subsidiaries, other than in the ordinary course of business consistent with past practice and as would not have a material cost to the Company or its Subsidiaries, (vii) hire or terminate the employment of any employee whose total annual compensation exceeds $300,000 (other than for “cause”), or (viii) waive or materially amend any restrictive covenant entered into by any current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries.
(e) except in the ordinary course of business consistent with past practice;
, sell, lease, encumber or otherwise surrender, relinquish, dispose of, transfer, exclusively license, mortgage, pledge or grant any Lien on any material Assets, properties or rights (c) Except as required by law or any existing benefit plans and agreements of including the Company or any capital stock of its Subsidiaries, grant any severance or termination pay ) except (i) to any executive officer the extent they are used, retired or replaced in the ordinary course of business or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms Subsidiary of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto)Company;
(f) Declare (i) declare, set aside or pay any dividends on on, or make any other distributions (whether in cash, stock or property) in respect of of, any of its capital stock, other than (A) regular quarterly cash dividends by the Company with customary record and payment dates consistent with past practice at a rate not in excess of $0.07 per share of Company Common Stock and (B) dividends or distributions declared, set aside, paid or made by a direct or indirect Subsidiary of the Company to the Company or a Subsidiary of the Company, (ii) adjust, split, combine or reclassify any of its capital stock or issue or propose or authorize the issuance of any other securities (including options, warrants, or any similar security exercisable for or convertible into, such other security) in respect of, in lieu of or in substitution for shares of its capital stock of the Company;
or (giii) Repurchase purchase, redeem or otherwise acquire, directly or indirectly, acquire any shares of its capital stock except as required by, and in accordance with, any agreements existing as of or the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, of its Subsidiaries or any subscriptions, other securities thereof or any rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue acquire any such shares or other convertible securities, except for purchases, redemptions or other than the issuance acquisitions of shares of Company Stock capital stock or other securities (with Company Rights attached theretoA) pursuant to an existing restricted stock purchase agreement with current or former employees or (B) as contemplated by the exercise terms of any Company Rights Plan (including the terms governing any Company Equity Award outstanding on the date hereof);
(g) make, change or Company Series E Preferred Stockrevoke any material Tax election, stock options file any material amended Tax Return, settle or warrants outstanding compromise any material claim, action, proceeding or assessment for Taxes, change any method of Tax accounting, enter into any closing agreement with respect to Taxes or make or surrender any material claim for a refund of Taxes, except as required by applicable Tax Law;
(h) take any action or enter into any transaction which, to the Knowledge of the date Company prior to taking such action, has, or would reasonably be expected to have, the effect of materially delaying or otherwise materially impeding or preventing the consummation of the transactions contemplated by this AgreementAgreement and each of the other Transaction Documents;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice practice, (i) modify, amend or in connection with existing agreements terminate any Company Material Contract or any Company Lease, (ii) enter into any successor agreement to an expiring Company Material Contract or Company Lease that changes the terms of the expiring Company Material Contract or Company Lease or (iii) enter into any new agreement that would have been considered a Company Material Contract or Company Lease if it were entered into between at or prior to the date hereof, in each of cases (i), (ii) and (iii) if the effect of such action would be materially adverse to the Company and Silicon Valley Bankits Subsidiaries, taken as a whole;
(j) incur any Indebtedness in excess of $1,000,000 in the aggregate or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for or cancel, the Indebtedness of any Person (other than the Company or any of the Company’s Subsidiaries), or make or authorize any material loan to any Person (in each case other than loans or advances made to the Company or by the Company or any of its Subsidiaries);
(k) Incur acquire or agree to acquire by merging or consolidating with, or by purchasing all or substantially all the assets of or all or substantially all the outstanding equity interests in, any business or any corporation, partnership, joint venture, limited liability company or other company, association or other business organization;
(l) change any significant method of accounting or accounting principles or practices by the Company or any of its Subsidiaries, except for such changes required by U.S. GAAP or, in the case of its applicable Subsidiaries, required by regulatory accounting requirements;
(m) terminate, cancel, or materially amend or modify any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of insurance policies maintained by it covering the Company or any of its Subsidiaries or guarantee any debt securities their respective properties which is not replaced by a comparable amount of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereofinsurance coverage;
(ln) Except as required by law adopt a plan of complete or permitted by SECTION 6.1(C)partial liquidation, adopt dissolution, restructuring, recapitalization or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets other reorganization of the Company or any of its Subsidiaries;
(o) abandon, including without limitation writing down allow to lapse, encumber, transfer to any third party, exclusively license or grant any right or other licenses to material Company Intellectual Property owned by or exclusively licensed to the value Company or any of inventoryits Subsidiaries, writing off notes or accounts receivableenter into licenses or agreements that impose material restrictions upon the Company or any of its Subsidiaries with respect to material Company Intellectual Property owned by any third party, in each case other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable lawpractice;
(np) Except as set forth materially change any of the architecture or infrastructure of the Company’s or any of its Subsidiaries’ network or information technology infrastructure systems or any material component thereof or any other material IT Assets currently used in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remunerationBusiness, other than maintenance or upgrades to any product provided by any existing vendor of the payment, discharge Company or satisfaction such Subsidiary or otherwise in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by itconsistent with past practice;
(q) Except as otherwise permitted pursuant institute, compromise, settle or agree to SECTION 6.3, take settle any action to exempt Claims (a) involving amounts in excess of $750,000 individually or make (b) that would impose any person, entity material non-monetary obligation on the Company or action (other than Parent) not subject to its Subsidiaries that would continue after the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;Effective Time; or
(r) Release authorize or permit enter into any agreement or otherwise make any commitment to do any of the release of any Person fromforegoing. Nothing contained in this Agreement gives, or waive is intended to give the Acquirer Parties, directly or permit indirectly, the waiver of any provision of, any confidentiality, "standstill" right to control or similar agreement to which any direct the operations of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this AgreementAgreement and applicable Law, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of complete control and supervision over its and its Subsidiaries’ operations.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 2 contracts
Samples: Merger Agreement (Investment Technology Group, Inc.), Merger Agreement (Virtu Financial, Inc.)
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its in accordance with the terms and set forth in ARTICLE IX of this Agreement or the Effective TimeClosing Date, the Company (which for the purposes of this SECTION 6.1 shall include agrees that the Company and each of its Subsidiaries) agrees, Subsidiaries shall use commercially reasonable efforts to (except to the extent that Parent shall otherwise consent expressly contemplated by this Agreement, set forth in Section 5.1 of the Company Disclosure Schedule or as consented to in writing by Parent (which such consent shall not to be unreasonably withheld withheld, conditioned or delayed)), to (i) in all material respects, carry on its business and to cause each of its Subsidiaries to carry on its business their businesses in the usual, regular ordinary course in substantially the same manner as heretofore conducted and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices practice and policies to preserve substantially intact its their present business organizations, and (ii) use their commercially reasonable efforts consistent with past practice to keep available the services of its their present executive officers and employees directors and use their commercially reasonable efforts consistent with past practice to, in all material aspects, preserve its their relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the them. The Company or any such Subsidiaries, agrees to the end that the goodwill and ongoing businesses promptly notify Parent of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements event or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are occurrence not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice that would have or in connection with existing agreements entered into between reasonably be expected to have a Material Adverse Effect on the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without Company. Without limiting the generality of the foregoing), during the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to from the date of this Agreement and continuing until the earlier of the termination of this Agreement in accordance with the terms set forth in ARTICLE IX of this Agreement or the Closing Date, except as otherwise expressly permitted by or provided for in this Agreement, a confidentiality agreement set forth in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf Section 5.1 of the Company Disclosure Schedule, required by any Legal Requirement or any of its Subsidiaries.
(s) Take, Law or agree as consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or otherwise to takedelayed), the Company shall not do, allow, cause or permit any of the following actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions occur with respect to the Merger set forth in SECTIONS 7.1 OR 7.3, Company without the prior written consent of Parent (such consent not to be satisfied.unreasonably withheld, conditioned or delayed); provided, however, that Parent and Merger Sub acknowledge and agree that this Section 5.1 shall not give Parent the right, directly or indirectly, to control or direct the operations of the Company prior to the Closing to the extent prohibited by applicable Antitrust Laws:
Appears in 2 contracts
Samples: Merger Agreement (Pericom Semiconductor Corp), Merger Agreement (Diodes Inc /Del/)
Conduct of Business of the Company. During the period from From the date of this Agreement and continuing until to the earlier of the Closing or termination of this Agreement pursuant to its terms and the Effective Time, the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall expressly otherwise consent in writing required by other provisions of this Agreement, Seller will cause the Company to:
(which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on i) Conduct its business in the usual, regular Ordinary Course of Business;
(ii) Maintain and ordinary course, and to use and cause each operate the Operated Assets as a reasonably prudent operator in the Ordinary Course of its Subsidiaries to use all Business;
(iii) Use commercially reasonable efforts consistent with past practices and policies to (A) preserve intact its present business organizationsorganization, (B) keep available the services of its present officers current officers, contractors and employees until Closing at their current rates of compensation, commissions and benefits and (C) preserve its relationships with customers, suppliers, distributors, licensors, licensees, suppliers and others having business dealings with the Company or any such Subsidiaries, it to the end that the its goodwill and ongoing businesses of Company and each of its Subsidiaries business shall not be unimpaired impaired in any material respect at the Effective Time. Except as expressly provided for Closing;
(iv) Pay or cause to be paid on a timely basis its proportionate share of all costs and expenses incurred in connection with the operation of the Operated Assets;
(v) Keep and maintain in all material respects accurate books, records and accounts;
(vi) Maintain in full force and effect existing insurance policies and binders of the Company subject only to variations required by this Agreement, the Credit Agreement, the Security AgreementOrdinary Course of Business, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries toelse will obtain, prior to the Effective Time lapse of any such policy or earlier termination binder, substantially similar coverage with insurers of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansrecognized standing;
(bvii) Enter into Pay all Taxes imposed upon any material partnership arrangements, joint development agreements of its Assets or strategic alliances, except in the ordinary course of with respect to its business consistent with past practicebefore any penalty or interest accrues thereon;
(cviii) Except as required Pay all claims and expenses (including claims and expenses for labor, services, materials and supplies) which are not the subject of a bona fide dispute when they become due and payable in accordance with their terms other than the Buyer Costs and Expenses;
(ix) Pay all wages and other compensation accrued by law or any existing benefit plans all Company Employees when they become due and agreements payable in accordance with the obligations of the Company under any labor or employment practices and policies, or any of its Subsidiariescollective bargaining agreement or other labor contract or individual agreement to which the Company is a party, grant any severance or termination pay by which the Company may be bound;
(ix) Pay or cause to any executive officer or (ii) be paid all bonuses and rentals, royalties, overriding royalties, shut-in royalties, and minimum royalties and development and operating expenses, ad valorem, property, production, severance, excise, and similar taxes, and other payments incurred with respect to any other employee the Operated Assets except payments made (A) royalties held in connection with the termination suspense as a result of employees who are title issues or another legally permissible reason and that do not executive officers give any third party a right to cancel an interest in amounts consistent with the Company's policies an Asset and past practices or (B) pursuant expenses or royalties being contested in good faith, unless the nonpayment of such contested expenses or royalties could result in the loss of a Lease, in which case Seller shall notify Buyer and obtain Buyer’s approval prior to written agreements outstandingwithholding such payment;
(xi) Comply in all material respects with the Leases, or policies existingContracts and all applicable Laws, statutes, ordinances, rules, regulations and orders relating to the Assets;
(xii) Maintain the personal property comprising part of the Operated Assets in at least as good a condition as it is on the date hereof hereof, subject to ordinary wear and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstancestear;
(dxiii) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights Keep Buyer reasonably informed regarding current and proposed activities and operations relating to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto)Assets;
(fxiv) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in Notify Buyer of ongoing activities and capital expenditures with respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount Assets in excess of $100,000 (in any one case) 50,000 per activity or $500,000 (in expenditure, net to the aggregate prior to October 1, 2001) or $200,000 (in interest constituting part of the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remunerationAssets, other than recompletions and other Capital Projects (which in all cases are deemed approved by Buyer without further action necessary); and
(xv) At all times preserve and keep in full force and effect its corporate or other legal existence and rights material to the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in performance by the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or obligations under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.;
Appears in 2 contracts
Samples: Purchase and Sale Agreement (Memorial Production Partners LP), Purchase and Sale Agreement (Memorial Production Partners LP)
Conduct of Business of the Company. During Except as described in Section 6.1 of the Company Disclosure Letter or as expressly provided for by this Agreement, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective Time, the Company (which for the purposes of this SECTION 6.1 shall include the Company will conduct and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to will cause each of its Subsidiaries to carry on conduct its business operations in all material respects in the usual, regular ordinary and ordinary courseusual course of business consistent with past practice, and to the Company will use and will cause each of its Subsidiaries to use all commercially its reasonable best efforts consistent with past practices to maintain and policies to preserve intact its business organization, preserve the present relationships and goodwill with those Persons having significant business organizationsrelationships with the Company or any of its Subsidiaries, keep available the services of its present current officers and employees and preserve its relationships with customerskey employees, suppliers, distributors, licensors, licensees, and others having business dealings with maintain in effect all material Permits pursuant to which the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at currently operates and maintain and enforce in all material respects the Effective TimeCompany Intellectual Property Rights. Except Without limiting the generality of the foregoing and except as otherwise expressly provided for by this Agreement, during the Credit Agreement, period specified in the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its termspreceding sentence, without the prior written consent of Parent (which consent shall not be unreasonably conditioned, withheld or delayed):), the Company will not and will not permit any of its Subsidiaries to:
(a) Except as provided in this Agreement issue, sell, deliver, transfer, convey, dispose of, grant options or as described in rights to purchase, pledge, or authorize or propose the Company Disclosure Schedulesissuance, acceleratesale, amend or change the period of exercisability delivery, transfer, conveyance, disposition, grant of options or restricted stockrights to purchase or pledge, any Company Securities or reprice options granted under Subsidiary Securities, other than Company Shares issuable upon exercise of the Company Option Plans Options or authorize cash payments vesting of Company Restricted Shares or Company RSU Awards outstanding on the date hereof in exchange for any options granted under any of such plansaccordance with their existing terms;
(b) Enter repurchase, acquire or redeem, directly or indirectly or amend any Company Securities, except in connection with (i) the forfeiture or expiration of Company Options, Company Restricted Shares or Company RSU Awards outstanding as of the date hereof, and (ii) the withholding of Company Shares to satisfy Tax withholding obligations with respect to the Company Options, Company Restricted Shares or Company RSU Awards outstanding as of the date hereof pursuant to any obligations contained in the applicable Company Stock Plan;
(c) split, combine, reclassify, subdivide, exchange, recapitalize or enter into any material partnership arrangementssimilar transaction in respect of its capital stock or declare, set aside, make or pay any dividend or distribution (whether in cash, stock or property) on any shares of its capital stock (other than cash dividends paid to the Company or one of its wholly owned Subsidiaries by a wholly owned Subsidiary of the Company with regard to its capital stock or other equity interests);
(i) make any acquisition or disposition, by means of a merger, consolidation, recapitalization, joint development agreements venture or strategic alliancesotherwise, of any business, assets or securities or any sale, lease, license, encumbrance or other disposition of any business, assets or securities of the Company or any of its Subsidiaries or any third party, in each case involving the payment of consideration (including consideration in the form of assumption of Liabilities) of $750,000 or more or the disposition of assets or securities with a fair market value in excess of $750,000, except for purchases or sales of raw materials, inventory or clinical trial drug supplies made in the ordinary course of business and consistent with past practice, (ii) adopt a plan of complete or partial liquidation, dissolution, recapitalization, restructuring or other reorganization of the Company or its Subsidiaries, (iii) merge or consolidate with or into any other Person, (iv) enter into any Contract that contains a change of control or similar provision that would require a material payment to the other party or parties thereto in connection with the Offer, the Merger or the other transactions contemplated by this Agreement, (v) other than in the ordinary course of business consistent with past practice, enter into a Contract that would have been a Material Contract if it were in effect as of the date hereof, amend any Material Contract in any material respect, terminate any Material Contract or grant any release or relinquishment of any material rights under any Material Contract, or (vi) other than in the ordinary course of business consistent with past practice, enter into, modify, supplement or amend any material lease or sublease of any real property;
(e) (i) incur, assume or otherwise become liable or responsible for any long-term debt or short-term debt, except for short-term debt incurred in the ordinary course of business consistent with past practice to fund working capital requirements in an amount not to exceed $750,000 at any time, (ii) repay (other than in the ordinary course of business consistent with past practice), redeem or repurchase any long-term or short-term debt or (iii) cancel any material debt or claim owed to the Company or any of its Subsidiaries;
(f) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except wholly owned Subsidiaries of the Company;
(g) make any loans, advances or capital contributions to, or investments in, or forgive any loans of, any other Person (other than wholly owned Subsidiaries of the Company);
(h) change in any material respect, any financial accounting methods, principles or practices used by it, except as required by GAAP or applicable Law;
(i) adopt or change any method of Tax accounting, make or change any material Tax election, extend the statute of limitations or file any extension request relating to material Taxes with any Governmental Authority, amend any material Tax Return, in each case, other than as required by applicable Law or in the ordinary course of business, or settle or compromise any material income Tax liability;
(j) adopt any amendments to its certificate of incorporation or bylaws (or other similar governing documents);
(k) except as required by applicable Law, the terms of this Agreement or any Plan in existence as of the date hereof and set forth on Section 4.10(a) of the Company Disclosure Letter, (i) increase the compensation (cash or equity) or benefits payable or to become payable to any of its directors, officers, employees or individual independent contractors, (ii) grant to any of its directors, officers, employees or individual independent contractors any increase in severance or termination pay, (iii) pay or award, or commit to pay or award, any bonuses or incentive compensation (other than annual bonuses payable in the ordinary course of business consistent with past practice during the first quarter of the Company’s fiscal year), or (iv) enter into any employment, consulting, severance, retention or termination agreement (including, for the avoidance of doubt, offer letters) with any of its directors, officers, employees or, except in the ordinary course of business, individual contractors, (v) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Plan (including any agreement or plan which would constitute a Plan if entered into as of the date hereof), or (vi) take any action to accelerate any payment or benefit, or the funding of any payment or benefit, payable or to become payable to any of its directors, officers, employees or individual independent contractors;
(l) incur any capital expenditure or any obligations, Liabilities or indebtedness in respect thereof, except for any capital expenditure in an amount not to exceed, in any fiscal quarter, $1,000,000 in the aggregate;
(m) discharge, settle or compromise (i) any suit, action, claim, proceeding or investigation that is disclosed in the Company SEC Reports filed prior to the date hereof or (ii) any other suit, action, claim, proceeding or investigation, other than, in each case, a settlement solely for monetary damages (without any admission of liability or other adverse consequences or restrictions on the Company, Parent, Acquisition Sub or the Surviving Corporation) not in excess of $500,000 individually or $2,500,000 in the aggregate;
(n) hire or terminate (other than for cause) the employment or service of any officer or employee (which employee has annual target compensation (based on cash and equity) of $200,000 or greater) of the Company or any of its Subsidiaries or appoint any Person to a position of executive officer or director of the Company or any of its Subsidiaries, or (ii) promote any officers or employees, except, provided that prior notice is provided to Parent, for a promotion of any employee that is in the ordinary course of business and consistent with past practice;
(o) form or commence the operations of any business or any corporation, partnership, limited liability company, joint venture, business association or other business organization or enter into any new line of business;
(p) enter into any Contract or transaction between the Company or any of its Subsidiaries, on the one hand, and any Affiliate of the Company or any of its Subsidiaries on the other hand, other than in the ordinary course of business consistent with past practice and on terms no less favorable to the Company or its Subsidiary, as applicable, than the terms governing such transactions with third parties;
(q) waive, release or assign any material rights or claims or make any material payment, directly or indirectly, of any Liability of the Company or any of its Subsidiaries before the same comes due in accordance with its terms, other than in the ordinary course of business consistent with past practice;
(cr) Except as required by law amend or modify the compensation terms or any existing benefit plans and agreements other obligations of the Company or contained in the engagement letter with the Company Financial Advisor in a manner adverse to the Company, any of its Subsidiaries, grant any severance Subsidiaries or termination pay (i) to any executive officer Parent or (ii) to any engage other employee except payments made (A) financial advisers in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required transactions contemplated by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(is) Causeenter into, permit amend or propose cancel any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, insurance policies other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable lawpractice;
(nt) Except as set forth in the Company Disclosure Schedule sell, license, assign, transfer, abandon or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001)dispose of, any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of TaxesIntellectual Property; or
(pu) Except for authorize, offer, agree or commit, in writing or otherwise, to take any change which of the foregoing actions. Notwithstanding the foregoing, nothing in this Agreement is required by reason of a concurrent change in GAAPintended to give Parent, directly or indirectly, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting right to control or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt direct the business or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any operations of the Company or any of its Subsidiaries is a party or under which the Company or at any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months time prior to the date Acceptance Time. Prior to the Acceptance Time, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiariescomplete control and supervision over their own business and operations.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 2 contracts
Samples: Merger Agreement (Receptos, Inc.), Merger Agreement (Celgene Corp /De/)
Conduct of Business of the Company. During Except (a) as described in Section 5.1 of the Company Disclosure Letter, (b) as required by applicable Law (including any COVID-19 Measures or such reasonable actions after notice has been provided to Parent or Parent’s counsel as may be taken in response to acts of war or sanctions, including in connection with the current dispute involving the Russian Federation and Ukraine), (c) as consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed) or (d) as required or expressly provided for by this Agreement, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective Time, the Company (which for the purposes of this SECTION 6.1 shall include x) the Company and each of its Subsidiaries) agreesSubsidiaries will use its reasonable best efforts to conduct its operations in all material respects according to its ordinary and usual course of business consistent with past practice, except to and the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business Company and to cause each of its Subsidiaries to carry on will use its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable best efforts consistent with past practices and policies to preserve intact its business organization and to preserve the present relationships with those Persons having significant business organizationsrelationships with the Company or its Subsidiaries; provided, keep available that during any period of full or partial suspension of operations related to COVID-19 or any COVID-19 Measures, the services Company and its Subsidiaries may, in connection with COVID-19 or any COVID-19 Measures, take such actions as are reasonably necessary (i) to protect the health and safety of the Company’s and its present officers and Subsidiaries’ employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others other individuals having business dealings with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries or (ii) to respond to third-party supply or service disruptions caused by COVID-19 or any COVID-19 Measures; provided, further, that the Company or any of its Subsidiaries may take such reasonable actions after notice has been provided to Parent or Parent’s counsel as may be unimpaired at taken in response to acts of war or sanctions, including in connection with the Effective Time. Except as expressly provided for by this Agreementcurrent dispute involving the Russian Federation and Ukraine, and (y) without limiting the Credit Agreement, generality of the Security Agreement, or the Software Distribution Agreementforegoing, the Company shall will not, and shall will not permit any of its Subsidiaries to:
(i) adopt any amendments to its certificate of incorporation or bylaws or other similar organizational documents;
(ii) adopt or implement any stockholder rights plan or similar arrangement;
(iii) issue, prior sell, grant options or rights to purchase, pledge, or authorize or propose the issuance, sale, grant of options or rights to purchase or pledge, any Company Securities or Company Subsidiary Securities, other than Shares issuable with respect to the Effective Time exercise, vesting, settlement of or earlier termination purchases with respect to Company Stock Awards outstanding as of the date hereof or granted in compliance with this Agreement Agreement;
(iv) acquire or redeem or offer to acquire or redeem, directly or indirectly, or amend any Company Securities or Company Subsidiary Securities, other than (A) as provided by the Company Stock Plan pursuant to its existing terms, without or (B) the prior written consent satisfaction of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided exercise price and/or Tax withholding obligations in this Agreement or as described in connection with the purchase, vesting, exercise and/or settlement of any Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansStock Award pursuant to its existing terms;
(bv) Enter into split, combine or reclassify its capital stock or declare, set aside, make or pay any material partnership arrangementsdividend or distribution (whether in cash, joint development agreements stock or strategic alliancesproperty) on any shares of its capital stock, except for dividends or distributions by any of the Company’s wholly owned Subsidiaries;
(vi) (A) acquire, by means of a merger, consolidation, recapitalization or otherwise, any business, assets or securities (other than, in each case, capital expenditures in accordance with subclause (xiv) below and any acquisition of assets, including active pharmaceutical ingredients and other supplies, in the ordinary course of business consistent with past practice) for consideration in excess of $5,000,000, individually or in the aggregate, (B) sell, lease, or otherwise dispose of any assets with a fair market value in excess of $5,000,000, individually or in the aggregate, except (1) pursuant to Contracts or commitments existing as of the date of this Agreement, (2) sales of products or services in the ordinary course of business consistent with past practice, (3) Incidental Contracts, (4) non-exclusive licenses entered into in the ordinary course of business consistent with past practice, (5) dispositions of marketable securities in the ordinary course of business consistent with past practice, and (6) dispositions or abandonments of immaterial tangible assets in the ordinary course of business consistent with past practice, or (C) adopt a plan of complete or partial liquidation, dissolution, recapitalization or restructuring;
(cvii) Except as required by law (A) sell, transfer, license, sublicense, assign, cancel, fail to renew, fail to defend, fail to maintain in the ordinary course of business, abandon or otherwise dispose of or grant any covenant-not-to-sue under any material Company Intellectual Property or any existing benefit plans Company Product, except for (1) Incidental Contracts and agreements (2) non-exclusive licenses entered into in the ordinary course of business to contract manufacturers or contract research organizations, or (B) disclose to any third party, other than under a confidentiality agreement or to representatives of Parent, any material Trade Secrets included in the Company Intellectual Property Rights;
(viii) incur, assume or otherwise become liable or responsible for any indebtedness for borrowed money;
(ix) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person in an amount not to exceed $5,000,000 in the aggregate;
(x) make any loans, advances (other than for ordinary course business expenses or pursuant to the Company’s or any of its Subsidiaries’ governing documents or existing indemnification obligations) or capital contributions to, grant any severance or termination pay (i) to any executive officer or (ii) to investments in, any other employee Person in excess of $2,500,000, except payments made for (A) in connection with advancement of expenses under any indemnification agreement or the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements governing documents of the Company or any of its Subsidiaries under similar circumstancesand (B) loans or advances among the Company and any of its wholly owned Subsidiaries and capital contributions to or investments in the Company’s wholly owned Subsidiaries;
(dxi) Transferform any Subsidiary, license or sell to acquire any person or entity or otherwise extend, amend or modify equity interest in any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) other Person or enter into grants any joint venture, partnership, collaboration or similar arrangement;
(xii) change, in any material respect, any financial accounting methods, principles, practices, policies or procedures used by it, except as required by GAAP or applicable Law;
(xiii) (A) adopt, change or request to future patent rights, change any Tax accounting method or period with respect to material Taxes (other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business); (B) make, including non-exclusive, enterprise-wide change or site licenses.
(e) Commence revoke any material litigation Tax election (other than in the ordinary course of business); (iC) amend or refile any material Tax Return; (D) consent to the extension or waiver of the statutory period of limitations applicable to any material Taxes (other than pursuant to an automatic extension of the due date for the routine collection of bills, filing a Tax Return); (iiE) for software piracy, settle or compromise any material Tax proceeding or liability; (F) surrender any claim to a material Tax refund; (G) request any Tax ruling; or (iiiH) prepare or file any U.S. federal income or other material Tax Return in such cases where the Company in good faith determines a manner that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults is inconsistent with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as treatments set forth on SECTION 6.1(GSection 5.1(y)(xiii) of the Company Disclosure SchedulesLetter or materially inconsistent with past practice;
(hxiv) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into applicable Law or required by a Plan in effect on or prior to the date of this Agreementhereof pursuant to its existing terms, (A) enter into any Plan or Contract providing for, or pay any, new change in control, retention, severance or termination pay, (B) grant any Company Stock Awards, (C) grant any increases in, or accelerate the vesting, payment or funding of, compensation or benefits payable to any employee, consultant, officer or director, (D) adopt, enter into, materially amend or terminate any material Plan or (E) change any actuarial or other assumptions used to calculate funding obligations with respect to any Plan;
(jxv) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries hire or terminate any employee with an annual salary in excess of $400,000, other than a termination for cause (as determined consistent with past practice);
(xvi) enter into any collective bargaining or waive similar labor Contract;
(xvii) make or authorize any contractsmaterial capital expenditure or incur any obligations, claimsLiabilities or indebtedness in respect thereof, or rightsexcept for (A) those contemplated by the Capital Expenditure Budget for the relevant fiscal year and (B) any unbudgeted capital expenditure, not to exceed, in each caseof the fiscal years ending December 31, 2023 and December 31, 2024, an aggregate amount for such fiscal year of $5,000,000;
(xviii) settle any suit, action, claim, proceeding or investigation other than as contemplated by Section 6.11 or a settlement solely for monetary damages (net of insurance proceeds received) not in excess of $2,500,000 individually or $5,000,000 in the aggregate;
(xix) except in the ordinary course of business consistent with past practice or in connection with existing agreements any transaction to the extent specifically permitted by any other subclause of this Section 5.1, (A) enter into any Contract that would, if entered into between prior to the Company and Silicon Valley Bankdate hereof, be a Material Contract, except for any statement of work issued under an existing Material Contract, in each case not in excess of $2,500,000 individually; or (B) materially modify, materially amend or terminate (other than expirations in accordance with its terms) any Material Contract or waive, release or assign any material rights or material claims thereunder;
(kxx) Incur subject to any material indebtedness for borrowed money Lien (other than ordinary course trade payables Permitted Liens) any material right or pursuant other material asset or property;
(xxi) enter into any Contract that by its terms would purport to existing credit facilities bind Parent or its Affiliates (other than, following the Closing, the Company or any of its Subsidiaries);
(xxii) exercise options under any collaboration agreements relating to “co-funding”, “co-commercialization” or similar cost-and-profit participation rights (whether an exercise to “opt in” or “opt out” of such rights with respect to any Company Product to which such collaboration agreement exists; or
(xxiii) authorize, offer, agree or commit, in writing or otherwise, to take any of the ordinary course foregoing actions. In furtherance and not in limitation of business) any other provision of this Agreement, to the extent permitted by applicable Law, the Company shall keep Parent informed on a reasonably current basis of any material developments (including the occurrence of any serious adverse event and any material governmental inquiries or guarantee any such prohibited indebtedness investigations), discussions or issue negotiations relating to the Company Products between or sell any debt securities with the FDA or warrants the EMA. Notwithstanding the foregoing, nothing in this Agreement is intended to give Parent or rights Merger Sub, directly or indirectly, the right to acquire debt securities control or direct the business or operations of the Company or any of its Subsidiaries or guarantee at any debt securities of otherstime prior to the Effective Time. Prior to the Effective Time, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C)its Subsidiaries shall exercise, adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, terms and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date conditions of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiariescomplete control and supervision over their respective businesses and operations.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 2 contracts
Samples: Merger Agreement (Reata Pharmaceuticals Inc), Merger Agreement (Biogen Inc.)
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company (which for the purposes of this SECTION Section 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary coursecourse in substantially the same manner as heretofore conducted, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizations, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective TimeCompany. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld withheld, conditioned or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure SchedulesCompany’s benefit plans and agreements, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing provided in the Company’s benefit plans and agreements of the Company or any of its Subsidiariesagreements, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's Parent’s policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the Company’s past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, Transfer or license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Intellectual Property Rights (including rights to resell or relicense the Company Proprietary Intellectual Property Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license licenses entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.business consistent with past practices;
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its SubsidiariesCompany’s business, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, except that the Company shall not require the approval of, and shall not be required to obtain Parent's consent consult with, Parent with respect to any claim, suit or proceeding by the Company against Parent, Merger Sub, any other Subsidiary of Parent, Parent or any of their its affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required byfrom former employees, directors and consultants in accordance with, any with agreements existing as of the date hereof and as set forth on SECTION 6.1(G) requiring the repurchase of shares in connection with any termination of service to the Company Disclosure SchedulesCompany;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on Issue, deliver or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant delivery or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Capital Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants therefor outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate ’s Certificate of incorporation Incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this AgreementBylaws;
(j) Sell, lease, license, encumber or otherwise dispose of any of the Company’s properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each caseassets, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bankpractice;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between provided that the Company and Silicon Valley Bank may incur additional indebtedness of up to $1,000,000 under the aggregate amount that is borrowed thereunder as of the date hereofWorking Capital Note;
(l) Except as required by law or permitted by SECTION 6.1(C)law, adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its SubsidiariesCompany’s assets, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable lawpractice;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1Schedule, pay, discharge or satisfy in an amount in excess of $100,000 25,000 (in any one case) or $500,000 100,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001aggregate), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41;
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; provided, however, that the Company may take any such action without Parent’s prior written consent upon notice to Parent; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(ASection 6.1(a) THROUGH through (Ro) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS Sections 7.1 OR or 7.3, not to be satisfied.
Appears in 2 contracts
Samples: Merger Agreement (Unify Corp), Merger Agreement (Axs One Inc)
Conduct of Business of the Company. During Except as contemplated or permitted by this Agreement or with the prior written consent of Parent (which consent Parent shall use its reasonable best efforts to provide or withhold within three business days of the Company’s request therefor, and which consent otherwise shall not be unreasonably withheld, delayed or conditioned) during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, or the date (if any) on which this Agreement is terminated pursuant to Section 8.01, the Company (which for the purposes of this SECTION 6.1 shall, and shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on to, (x) conduct its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use course in all commercially reasonable efforts material respects consistent with past practices practice, (y) use reasonable best efforts to maintain and policies to preserve intact its present business organizations, keep available organization and advantageous business relationships and retain the services of its present key officers and key employees and preserve (z) take no action that is intended to or would reasonably be expected to adversely affect or materially delay the ability of any party to obtain any necessary approvals of any Governmental Authority required for the transactions contemplated hereby or to perform its relationships with customerscovenants and agreements under this Agreement or to consummate the transactions contemplated hereby. Without limiting the generality of the foregoing, suppliers, distributors, licensors, licensees, and others having business dealings with during the Company or any such Subsidiaries, period from the date of this Agreement to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution date (if any) on which this Agreement is terminated pursuant to Section 8.01, except as set forth in Section 5.01 of the Company Disclosure Schedule and except as contemplated or permitted by this Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent Parent shall use its reasonable best efforts to provide or withhold within three days of the Company’s request therefor, and which consent otherwise shall not be unreasonably withheld withheld, delayed or delayedconditioned):
(a) Except as provided in this Agreement incur or as described in assume any Indebtedness or assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the Company Disclosure Schedules, accelerate, amend Indebtedness or change other obligations of any other person (other than a wholly owned Subsidiary of the period of exercisability of options or restricted stockCompany), or reprice options granted under make or forgive any loan or advance to, any person (other than a wholly owned Subsidiary of the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliancesCompany), except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay for (i) to any executive officer or Indebtedness in an amount that does not exceed $10,000,000 in the aggregate, (ii) to the issuance of letters of credit or surety bonds (including, without limitation, the issuance, increase or other modification of any other employee except payments made (A) letters of credit issued in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (Bcredit enhancement for any fleet financing) pursuant required to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of be obtained by the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice and (iii) fleet financing (in a principal amount not to exceed the then-outstanding principal amount of any fleet financing being replaced, modified or extended) incurred by any of Rental Car Finance Corp., Dollar Thrifty Automotive Group Canada Inc., DTGC Car Rental Limited Partnership, Dollar Thrifty Funding Corp. or TCL Funding Limited Partnership to replace, modify or extend (x) any fleet financing in connection with existing agreements entered into between place at such time, if such then-outstanding fleet financing would require regularly scheduled amortization payments within 180 days of the Company and Silicon Valley Bankdate on which such replacement, modification or extension occurs or (y) any fleet financing under which a mandatory prepayment or rapid amortization event has occurred;
(kb) Incur except with respect to the Company Credit Agreement or the replacement of any material indebtedness for borrowed money (other than ordinary course trade payables or fleet financing pursuant to existing credit facilities in the ordinary course of business) Section 5.01(a), redeem, repurchase, defease, cancel or guarantee otherwise acquire any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities Indebtedness of the Company or any of its Subsidiaries or guarantee (other than at stated maturity and other than the making of any debt securities of othersrequired amortization payments and mandatory prepayments, except in each case pursuant to existing agreements entered into between in accordance with the Company and Silicon Valley Bank up to terms of the aggregate amount that is borrowed thereunder instrument or agreements, as of the case may be, governing such Indebtedness as in effect on the date hereof);
(lc) Except amend or modify the Medium Term Notes so as required by law to delete or permitted by SECTION 6.1(C), adopt or amend adversely affect any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employeeFavorable Terms therein;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 2 contracts
Samples: Merger Agreement, Merger Agreement
Conduct of Business of the Company. During the period from the date of this Agreement The Company hereby covenants and continuing until the earlier of the termination of this Agreement pursuant agrees that, prior to its terms and the Effective Time, the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent unless Merger Corp. shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizations, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company ) or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except except as otherwise expressly provided for contemplated by this Agreement, the Credit Agreement, Company Board shall not authorize or direct the Security Agreement, or the Software Distribution Agreement, officers of the Company shall not, and shall not permit or any of its Subsidiaries to take any action or fail to take any action that would cause the Company or such Subsidiary to fail to, prior (i) operate its business in the usual and ordinary course consistent with past practice, (ii) use its commercially reasonable efforts to preserve substantially intact its business organization, maintain its rights and franchises, retain the services of its respective principal officers and key employees and maintain its relationships with its respective principal suppliers and other persons with which it or any of its Subsidiaries has significant business relations, (iii) use its commercially reasonable efforts to maintain and keep its properties and assets in as good repair and condition as at present, ordinary wear and tear excepted, and (iv) exercise within the time prescribed in each Real Property Lease any option provided therein to extend or renew the term thereof to the Effective Time extent such Real Property Lease is still necessary and advisable for the conduct of the business of the Company and its Subsidiaries, unless, since such time, an alternate lease has been entered into with terms, in the aggregate, generally not less favorable to the Company or earlier termination its Subsidiaries. Without limiting the generality of the foregoing, and except as otherwise expressly contemplated by this Agreement pursuant or consented to its terms, without the prior written consent of Parent in writing by Merger Corp. (which consent shall not be unreasonably withheld or delayed):), the Company Board shall not authorize or direct the officers of the Company or any of its Subsidiaries to do any of the following:
(a) Except as provided in this Agreement amend or as described in propose to amend its articles of incorporation or bylaws (or other governing documents) or the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansRights Agreement;
(b) Enter into authorize for issuance, issue, sell, deliver, or agree or commit to issue, sell or deliver, dispose of, encumber or pledge (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any material partnership arrangements, joint development agreements stock of any class or strategic alliancesany securities, except as required by agreements with the Company's employees under any of the Company Stock Plans as in effect as of the date hereof, or amend any of the terms of any such securities or agreements outstanding as of the date hereof;
(c) split, combine or reclassify any shares of its capital stock, declare, set aside or pay any dividend or other 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 of its Subsidiaries;
(d) other than in the ordinary course of business consistent with past practice, (i) incur or assume any long-term or short-term indebtedness or issue any debt securities; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person; (iii) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of the Company) 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; (iv) pledge or otherwise encumber shares of capital stock of any of its Subsidiaries; or (v) mortgage, pledge or otherwise encumber any of its material assets, tangible or intangible, or create or suffer to exist any material Lien thereupon other than Permitted Liens in the ordinary course of business, consistent with past practice;
(ce) Except as required by law adopt a plan of complete or any existing benefit plans and agreements partial liquidation or adopt resolutions providing for the complete or partial liquidation, dissolution, restructuring or recapitalization of the Company or any of its Subsidiaries, grant any severance or termination pay ;
(f) (i) to any executive officer except as may be required by law or (ii) to any other employee except payments made (A) existing agreements, plans or arrangements as in connection with effect as of the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstandingdate hereof, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of businessbusiness consistent with past practice, including non-exclusivepay, enterprise-wide agree to pay, grant, issue or site licenses.
(e) Commence accelerate payments or benefits pursuant to any material litigation other than (i) for Benefit Plan in excess of the routine collection payments or benefits provided under such Benefit Plan as of billsthe date hereof, (ii) except (A) for software piracyincreases in the ordinary course of business consistent with past practice for employees other than officers and directors of the Company that, in the aggregate, do not result in a material increase in benefits or compensation expense to the Company, or (B) as required under existing agreements or in the ordinary course of business consistent with past practice, increase in any manner the salary or fees or benefits of any director, officer, consultant or employee, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result except as may be required by law, amend (other than amendments made in the material impairment ordinary course of a valuable aspect of the business of the Company consistent with past practice) or terminate any of its SubsidiariesBenefit Plan or establish, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, adopt or enter into other agreements or commitments of any character obligating it to issue any such shares plan, agreement, program, policy, trust, fund or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding arrangement that would be a Benefit Plan if it were in existence as of the date of this Agreement;
(ig) Causeacquire, permit sell, transfer, lease, encumber or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms dispose of any agreement between assets outside the ordinary course of business or any assets (other than inventory in the ordinary course consistent with past practice) that, in the aggregate, are material to the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claimstaken as a whole, or rights, in each case, except in enter into any commitment or transaction outside the ordinary course of business consistent with past practice or in connection with existing agreements entered into between that would be material to the Company and Silicon Valley Bankits Subsidiaries taken as a whole;
(kh) Incur except as may be required as a result of a change in law or in GAAP, change any of the financial accounting principles or practices used by it or revalue in any material indebtedness for borrowed money (respect any of its assets, including writing down the value of inventory or writing off notes or accounts receivable other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(li) Except as required (i) acquire (by law merger, consolidation, or permitted by SECTION 6.1(C)acquisition of stock or assets) any corporation, adopt partnership or amend other business organization or division thereof or any Company Scheduled Plan equity interest therein; or increase the salaries or wage rates of (ii) enter into any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, agreement other than in the ordinary course of business consistent with past practice or that would be material to the Company and its Subsidiaries taken as required by GAAP or applicable lawa whole;
(nj) Except as set forth make any material Tax election, change any material method of Tax accounting or settle or compromise any material Tax liability of the Company or any of its Subsidiaries, and, in any event, the Company shall consult with Merger Corp. before filing or causing to be filed any material Tax Return of the Company or any of its Subsidiaries, except to the extent such Tax Return is filed in the ordinary course of business consistent with past practice, and before executing or causing to be executed any agreement or waiver extending the period for assessment or collection of any material Taxes of the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, any of its Subsidiaries;
(k) pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) material claims, liabilities or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of consistent with past practice or to the type reflected extent provided for in reserves specific to such claim, liability or reserved against in the Company Financial Statements obligation;
(i) permit any insurance policy or policies naming it as a beneficiary or a loss payable payee, which policy or policies, individually or in the notes theretoaggregate, is or are material to the Company and the Subsidiaries taken as a whole, to be canceled or terminated without notice to Merger Corp. unless the Company or one of its Subsidiaries shall have obtained a comparable replacement policy, or (ii) enter into any insurance policy or policies naming it as a beneficiary or a loss payable payee, which policy or policies, individually or in the aggregate, is or are material to the Company and the Subsidiaries taken as a whole;
(m) except in the ordinary course of business consistent with past practice, (i) terminate, amend or modify (in any material respect); 41, or waive any material provision of, any Material Contract, or (ii) amend, modify or change (in any material respect) any material policies or procedures governing product sales or returns or the treatment of accounts receivable;
(n) settle or compromise any pending or threatened material suit, action or claim;
(o) Except as required by applicable Tax law, make enter into any agreement containing any provision or change any material election in respect of Taxes, adopt or change covenant limiting in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any ability of the Company or any of its Subsidiaries is a party to (i) sell any products or under which services of or to any other Person, (ii) engage in any line of business, or (iii) compete with or obtain products or services from any Person or limiting the Company ability of any Person to provide products or any of its Subsidiaries has any rights, and will use its best efforts services to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries., in each case, in any geographic area or during any period of time; or
(sp) Taketake, or agree in writing or otherwise to take, any of the actions described prohibited in SECTION 6.1(ASections 5.3(a) THROUGH through (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedo).
Appears in 2 contracts
Samples: Joinder Agreement (Quality Dining Inc), Joinder Agreement (Quality Dining Inc)
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company (which for the purposes of this SECTION Section 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary coursecourse in substantially the same manner as heretofore conducted, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizations, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the benefit plans and agreements of the Company Disclosure Schedulesor any of its Subsidiaries, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law provided in this Agreement or any existing the benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the CompanyParent's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, Transfer or license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Intellectual Property Rights (including rights to resell or relicense the Company Proprietary Intellectual Property Rights) or enter into grants to future patent rights, other than on the standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.business consistent with past practices;
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, except that the Company shall not require the approval of, and shall not be required to obtain Parent's consent consult with, Parent with respect to any claim, suit or proceeding by the Company against Parent, Merger Sub, any other Subsidiary of Parent, Parent or any of their its affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required byfrom former employees, directors and consultants in accordance with, any with agreements existing as of the date hereof and as set forth on SECTION 6.1(G) requiring the repurchase of shares in connection with any termination of service to the Company Disclosure Schedulesor any of its Subsidiaries;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issueIssue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than (i) the issuance of shares of Company Stock (with Company Rights attached thereto) Shares pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants therefor outstanding as of the date of this Agreement, and (ii) Company Shares issuable to participants in the Stock Purchase Plan consistent with the terms of that Plan;
(i) Cause, permit or propose any amendments to the Company's certificate Certificate of incorporation Incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this AgreementBylaws;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each caseSubsidiaries, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bankpractice;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C)law, adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable lawpractice;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1Schedule, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 250,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001aggregate), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41;
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(ASection 6.1(a) THROUGH through (Ro) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS Sections 7.1 OR or 7.3, not to be satisfied.
Appears in 2 contracts
Samples: Merger Agreement (Rowecom Inc), Merger Agreement (Divine Inc)
Conduct of Business of the Company. During The Company covenants and agrees that, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective Time, the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that unless Parent shall otherwise consent agree in writing (writing, which consent agreement shall not be unreasonably withheld or delayed), to carry on the Company shall conduct its business and to shall cause each the businesses of its the Company Subsidiaries to carry on its be conducted only in, and the Company and the Company Subsidiaries shall not take any action except in, the ordinary course of business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts a manner consistent with past practices and policies practice except as expressly contemplated by this Agreement. The Company shall use reasonable best efforts to preserve substantially intact its present the business organizationsorganization and material assets and maintain the material rights of the Company and the Company Subsidiaries, keep available the services of its the present officers and officers, employees and consultants of the Company and the Company Subsidiaries and preserve its the present relationships of the Company and the Company Subsidiaries with customers, suppliers, distributors, licensors, licensees, suppliers and others having business dealings other persons with which the Company or any such SubsidiariesCompany Subsidiary has business relations. Without limiting the foregoing, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except except as expressly provided for contemplated by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, neither the Company shall notnor any Company Subsidiary shall, during the period from the date of this Agreement and shall not permit any continuing until the earlier of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its termsor the Effective Time, directly or indirectly do any of the following without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Parent:
(a) Except as provided in this Agreement amend or as described otherwise change the Articles of Incorporation or Bylaws of the Company or the organizational documents of any Company Subsidiary;
(b) issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, 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 any shares of capital stock, or any other ownership interest (including, without limitation, any phantom interest) in the Company Disclosure Schedules, accelerate, amend or change (except for the period issuance of exercisability shares of options or restricted stock, or reprice options Company Common Stock pursuant to any option previously granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansPlans);
(bc) Enter into sell, pledge, dispose of or encumber any material partnership arrangements, joint development agreements assets of the Company or strategic alliancesany Company Subsidiary, except for (i) sales of assets in the ordinary course of business in a manner consistent with past practice, (ii) sales of lots and/or homes in a manner consistent with past practice, (iii) disposition of obsolete or worthless assets, (iv) sales of immaterial assets not in excess of $250,000 individually, and (v) liens on assets to secure purchase money and construction financings in the ordinary course of business consistent with past practice and other non-monetary encumbrances entered into in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstandingdeclare, or policies existingset aside, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare 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 any of its capital stock, except that a wholly owned Company Subsidiary may declare and pay a dividend or make advances to its parent or the Company, (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 stock, or (iii) amend the terms or change the period of the Company;
(g) Repurchase exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any Company Subsidiary to purchase, repurchase, redeem or otherwise acquire, any of its securities, including, without limitation, shares of Company Common Stock or any option, warrant or right, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of acquire shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Common Stock, stock options or warrants outstanding as propose to do any of the date of this Agreementforegoing;
(i) Causeacquire (by merger, permit consolidation, or propose acquisition of stock or assets) any amendments corporation, partnership or other business organization or division thereof; (ii) purchase any securities or make any material investment (other than investments in existing joint ventures for the purpose of land acquisition complying with the dollar limits set forth in clause (vi) of this Section 5.1(e)), either by purchase of securities, contributions to capital, asset transfers, or purchase of any assets, in any person other than a wholly owned Company Subsidiary or otherwise acquire direct or indirect control over any person; (iii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the Company's certificate obligations of incorporation or by-lawsany person, except as required by the terms under existing lines of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except credit in the ordinary course of business consistent with past practice practice, or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur make any material indebtedness for borrowed money loans or advances (other than ordinary course trade payables loans or advances to or from direct or indirect wholly owned Company Subsidiaries or pursuant to existing credit facilities in contracts or contracts for the ordinary course acquisition or development of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements land entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practicespractice), including but not limited to (but without limiting the generality of the foregoing), the adoption iv) enter into or amendment of amend any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivableagreement, other than in the ordinary course of business consistent with past practice practice, that is or as required by GAAP would be a Company Material Contract or applicable law;
(n) Except as set forth in is otherwise material to the Company Disclosure Schedule and the Company Subsidiaries, taken as a whole; (v) authorize any capital expenditures or as otherwise permitted by this SECTION 6.1purchase of fixed assets which are, pay, discharge or satisfy in an amount in excess of $100,000 250,000 individually or $1,500,000 in the aggregate; (vi) authorize any expenditures for the purchase of real estate which are in excess of $15,000,000 in any one case) single transaction or series of related transactions or in excess of $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (30,000,000 in the aggregate in any given calendar month beginning October 1, 2001), 30-day period (it being understood and agreed that this clause (vi) shall not prohibit the performance of any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect pursuant to any bonus or special remuneration, other than agreement entered into prior to the payment, discharge or satisfaction date of this Agreement (including any obligation to purchase land in order to fulfill obligations pursuant to agreements with home purchasers executed prior to the ordinary course of business of liabilities date hereof) in Section 5.1(e)(vi) of the type reflected or reserved against in the Company Financial Statements (or in the notes theretoDisclosure Schedule); 41
or (ovii) Except as required by applicable Tax law, make or change any material election fail to use their commercially reasonable efforts to cause to be memorialized in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject writing all agreements pertaining to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any obligations of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement purchase land in connection with such Person's consideration of a possible Acquisition Transaction the joint ventures as set forth on Schedule 5.1(e)(vii), except where the failure to so memorialize an agreement is not reasonably likely to individually or equity or debt investment in the aggregate have a Company Material Adverse Effect.
(f) except as may be required by law, increase the compensation payable or to return all confidential information heretofore furnished become payable to such Person by its officers or on behalf employees, grant or pay any severance or termination pay to, or enter into any employment or severance agreement with any director, officer or other employee of the Company or any Company Subsidiary, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of its Subsidiaries.any current or former directors, officers or employees, except increases in annual compensation for employees in the ordinary course consistent with past practice to the extent such compensation increases do not result in a material increase in compensation expense to the Company;
(sg) Takeenter into or amend any employment agreement between the Company or any Company Subsidiary (unless required by law) and any person that the Company or the Company Subsidiary does not have the unconditional right to terminate without liability at any time on or after the Effective Time;
(h) change accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable);
(i) make any material Tax election inconsistent with past practice or settle or compromise any material federal, state, local or foreign Tax liability or agree to an extension of a statute of limitations with respect to any material amount of Tax, except to the extent the amount of any such settlement or compromise has been reserved for in the financial statements contained in the Company SEC Reports filed prior to the date hereof;
(j) except as set forth in Section 5.1(j) of the Company Disclosure Schedule, commence any litigation other than in accordance with past practice, or settle any litigation involving any liability of the Company or any Company Subsidiary for material money damages or restrictions upon the operations of any of the Company or the Company Subsidiaries, or enter into any agreement to waive, release, compromise or assign any material rights or claims held by the Company or Company Subsidiary or settle any claim described in Section 3.14 of the Company Disclosure Schedule for a payment exceeding $3,000 per claim or in such other maximum amount as may be set forth in Section 3.14 of the Company Disclosure Schedule;
(k) fail to renew the Company's existing insurance policies, including general liability insurance policies, or fail to replace such policies with new policies with terms substantially identical to those currently in force other than with respect to premium amounts which will not exceed then market rates; or
(l) take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(ASections 5.1(a) THROUGH through (Rk) above, or any action which would cause or would be reasonably likely to cause make any of the conditions to representations or warranties of the Merger set forth Company contained in SECTIONS 7.1 OR 7.3, this Agreement untrue or incorrect in any material respect as contemplated hereby or prevent the Company from performing or cause the Company not to be satisfiedperform in any material respect its covenants hereunder.
Appears in 2 contracts
Samples: Merger Agreement (Beazer Homes Usa Inc), Merger Agreement (Beazer Homes Usa Inc)
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier Except as set forth in Section 4.01 of the termination of this Agreement pursuant to its terms and the Effective Time, the Company Disclosure Letter (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except with specific reference to the extent that Parent shall otherwise consent covenants in this Section 4.01 to which the information in such letter relates), contemplated or permitted by this Agreement, required by a Governmental Entity of competent jurisdiction or as expressly agreed to in writing by Parent (which consent shall not be unreasonably withheld or delayed), to carry on its business the Company will, and to will cause each of its Subsidiaries to, conduct its operations in all material respects according to carry on its ordinary course of business in the usual, regular consistent with past practice and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present current business organizationsorganization, to keep available the services of its present current officers and employees and to preserve its relationships with customers, suppliers, distributors, licensors, licensees, advertisers, distributors and others having business dealings with it. In this Section 4.01, “ordinary course of business consistent with past practice” shall include actions (the “Plan Actions”) that are specifically provided for in, or undertaken pursuant to, the Reorganization Plan; provided, however, that “ordinary course of business consistent with past practice” shall not include actions that are substantially similar to Plan Actions, but are not specifically provided for in, or undertaken pursuant to, the Reorganization Plan. Without limiting the generality of the foregoing, except as set forth in Section 4.01 of the Company or any such Subsidiaries, Disclosure Letter (with specific reference to the end that covenants in this Section 4.01 to which the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except information in such letter relates) and, except as expressly provided for (x) contemplated or permitted by this Agreement, the Credit Agreement, the Security Agreement, Agreement or the Software Distribution Agreement(y) required by Law, the Company shall not, will not and shall not permit any of will cause its Subsidiaries not to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (Parent, which consent shall not be unreasonably withheld or delayed)::
(ai) Except as provided in this Agreement except with respect to bonuses or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except other incentive compensation made in the ordinary course of business consistent with past practice;
practice (c) Except as required by law including, without limitation, an annual bonus or compensation plan adopted for fiscal year 2007 consistent with annual plans for prior years), adopt or amend in any existing material respect, any bonus, profit sharing, compensation, severance, change-in-control, termination, stock option, restricted stock, stock purchase, stock appreciation right, pension, retirement, employment or other employee benefit plans and agreements agreement, trust, plan or other arrangement for the benefit or welfare of any director, officer or employee of the Company or its Subsidiaries or increase in any manner the compensation or fringe benefits of its Subsidiariesany director, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transferexcept, license or sell to any person or entity or otherwise extendin each case, amend or modify any rights to for annual increases and cost of living increases for the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms benefit of officers and employees of the Company or its Subsidiaries which, in the aggregate, are consistent with past practice);
(ii) sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of any of its Subsidiaries properties or assets other than immaterial properties or assets (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into immaterial portions of properties or assets), except in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation and other than Liens (iA) for the routine collection arising as a matter of billsLaw, (iiB) for software piracygranted in connection with the incurrence, assumption or guaranteed of any indebtedness permitted under clause (iiiix) below and (C) as required by after acquired property covenants in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business contracts evidencing indebtedness of the Company or any its Subsidiaries and Liens created in connection with the refinancing of its Subsidiaries, provided that indebtedness of the Company consults or its Subsidiaries that are no less favorable to the Company and its Subsidiaries than those Liens that were created in connection with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto)indebtedness that is being refinanced;
(fiii) Declare (x) declare, set aside or pay any dividends on on, or make any other distributions (whether in cash, stock or property) in respect of of, any of its capital stock, or (y) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (z) purchase, redeem or otherwise acquire any shares of capital stock of the Company;
Company or its Subsidiaries or any other securities thereof or any rights or warrants to acquire any such shares or other securities, except that (gA) Repurchase or otherwise acquirethe Company may continue the declaration and payment of regular cash dividends per share of Company Common Stock, directly or indirectlynot to exceed $0.31 per quarter up to and including the third quarter of 2006 and, any shares of its capital stock except as required bythereafter, not to exceed $0.34 per quarter, in each case, with usual record and payment dates for such dividends in accordance withwith past dividend practice, any agreements existing as (B) the Company may declare and pay a Supplemental Dividend on Company Common Stock on a quarterly basis for the period commencing on the eighteen (18) month anniversary of the date hereof through the Effective Time, (C) the Company may declare and as set forth pay a special cash dividend on SECTION 6.1(GCompany Common Stock with a record date in the fiscal quarter in which the Effective Time occurs in a per share amount up to the amount of the regular cash dividend declared per share by the Company in the immediately preceding fiscal quarter multiplied by a fraction, the numerator of which is the number of days elapsed in the then current fiscal quarter over the total number of days in the then current fiscal quarter, (D) any Subsidiary of the Company Disclosure Schedulesmay pay dividends to the Company (and any intermediate holding company) and (E) the Company may purchase Company Common Stock for the purpose of funding or providing benefits under employee benefit plans, stock option and other incentive compensation plans, directors plans and stock purchase and dividend reinvestment plans in accordance with past practice or as may be permitted by Section 4.01(i) or 4.01(iv);
(hiv) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreementauthorize for issuance, issue, deliver, sell or authorize agree or propose commit to issue, sell or deliver (whether through the issuanceissuance or granting of options, deliverywarrants, grant commitments, subscriptions, rights to purchase or sale ofotherwise), pledge or otherwise encumber any shares of its capital stock of stock, any class other voting securities or any securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares shares, voting securities or convertible securities or any other convertible securitiessecurities or equity equivalents (including, without limitation, stock appreciation rights) other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the issuances upon exercise of Warrants or Company Rights or Company Series E Preferred Stock, stock options or warrants in connection with stock-based awards outstanding as of the date of this Agreement;
(i) Cause, permit hereof or propose any amendments to granted after the Company's certificate of incorporation or by-laws, except as required by date hereof in accordance with the terms of any agreement between Benefit Plan (including the Company and any holder grant of Company Series E Preferred Stock entered into on or prior Restricted Shares pursuant to the date Employee Restricted Stock Plan or the issuance of this AgreementDSUs pursuant to the Deferred Director Plan) or as permitted under Section 4.01(i);
(jv) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of amend its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley BankCharter Documents;
(kvi) Incur acquire (x) by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any material indebtedness for borrowed money other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof or (y) any assets, including real estate, except (A) acquisitions of assets (other than ordinary course trade payables or pursuant to existing credit facilities capital expenditures) in the ordinary course of business; and (B) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities the making of capital expenditures (1) in accordance with, and in an amount not materially greater than, the Company’s capital expenditures plan set forth in Section 4.01(vi) of the Company Disclosure Letter, (2) in connection with the repair or any replacement of its Subsidiaries facilities destroyed or guarantee any debt securities of othersdamaged due to casualty or accident (whether or not covered by insurance) or (3) otherwise, except in each case an aggregate amount for all such capital expenditures made pursuant to existing agreements entered into between the Company and Silicon Valley Bank up this clause (3) not to the aggregate amount that is borrowed thereunder as of the date hereofexceed US$20 million;
(lvii) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge discharge, settle or satisfy in an amount in excess of $100,000 (in any one case) claims, liabilities, obligations or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms;
(viii) make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material respect the Tax liability or Tax attributes of the Company or its Significant Subsidiaries, settle or compromise any material income tax liability or, except as required by applicable Law, materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice;
(ix) incur, assume or guarantee any indebtedness for borrowed money or enter into any “keep well” or other agreement to maintain any financial condition of another person or enter into any arrangement having the economic effect of any of the foregoing (including any capital leases, “synthetic” leases or conditional sale or other title retention agreements), other than (1) in the ordinary course of business consistent with past practice (including, without limitation, under the Credit Agreement), (2) borrowings made to finance capital expenditures and other acquisitions permitted pursuant to clause (vi) above, (3) borrowings made in connection with the refinancing of any employment contract indebtedness existing on the date hereof (including, without limitation, the Senior Notes and the Company Credit Facility) or permitted to be incurred hereunder and that will result in “investment-grade” style covenants (including with respect to any bonus or special remunerationrestrictions on dividend payments and “change of control” provisions), (4) borrowings in an amount not materially greater than as set forth in Section 4.01(ix) of the Company Disclosure Letter and (5) other borrowings in an aggregate amount not to exceed US$20 million;
(x) other than the payment, discharge or satisfaction in the ordinary course of business consistent with past practice and on terms not materially adverse to the Company and its Subsidiaries, taken as whole, enter into, modify or terminate any Material Contract or waive, release or assign any rights or claims or exercise any options thereunder;
(xi) not make or implement any changes to the Company’s or its Subsidiaries rates or charges, standards of liabilities of the type reflected service or reserved against execute any agreement with respect thereto except (1) in the Company Financial Statements ordinary course of business consistent with past practice, (2) as required under the Settlement Agreement or in the notes thereto); 41
Consent Order or (o3) Except as required by applicable Tax law, make or change any material election in respect a Governmental Entity of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the competent jurisdiction. The Company will notshall, and will not permit any of shall cause its Subsidiaries to, change any method deliver to Parent a copy of accounting each such filing or accounting practice used by itagreement at least four (4) Business Days prior to the filing or execution thereof;
(qxii) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any personmaterial changes in its accounting methods, entity except (i) as required by changes in GAAP (or action any interpretation thereof) or Regulation S-X of the SEC, in each case as required by the Company’s independent public accountants, (other than Parentii) not subject as may be required by a change in applicable Law, (iii) as disclosed in the Company SEC Documents filed prior to the provision of Section 203 of date hereof, (iv) or as required by a Governmental Entity (including the Delaware Law FASB or any other potentially applicable anti-takeover or similar statute or regulationorganization);
(rxiii) Release amend, modify or permit waive any material provision of the release Company’s risk management program as currently in effect;
(xiv) other than as contemplated by this Agreement in connection with the Merger or as required pursuant to a decree, temporary restraining order, preliminary or permanent injunction or other order issued by any Governmental Entity of competent jurisdiction terminate, amend, modify or waive any Person fromprovision of (1) any confidentiality or standstill agreement in respect of the Company and its Subsidiaries to which it is a party or (2) the Company’s Rights Agreement;
(xv) fail to maintain in full force and effect or fail to use commercially reasonable efforts to, replace with financial responsible insurers, or waive renew, the Insurance Policies existing as of the date hereof;
(xvi) enter into any agreements that limit or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of otherwise restrict the Company or any of its Subsidiaries is a party or under which the Company or any successor thereto from engaging or competing, in any material respect, in any line of its Subsidiaries has business or in any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.geographic area; or
(sxvii) Takeauthorize, or commit or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedforegoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Northwestern Corp), Merger Agreement (Northwestern Corp)
Conduct of Business of the Company. During the period from Between the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, except as expressly contemplated by this Agreement, as set forth in SECTION 5.1 of the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agreesDisclosure Schedule, except to the extent that as required by Law, or as Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld withheld, conditioned or delayed), to carry on its business the Company shall, and to shall cause each of its Subsidiaries to carry on to, conduct its business in the usual, regular and ordinary coursecourse of business consistent with past practice, and to use the Company shall and shall cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizationstheir business, assets and technology, keep available the services of its present their officers and employees employees, maintain in effect all of their Permits and preserve its their relationships and goodwill with customers, suppliers, distributors, licensors, licensees, and others those Persons having significant business dealings relationships with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at Subsidiaries. In addition to and without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time. Except , except as expressly provided for contemplated by this Agreement, as set forth in SECTION 5.1 of the Credit AgreementCompany Disclosure Schedule, the Security Agreementas required by Law, or the Software Distribution Agreementas Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit any cause each of its Subsidiaries not to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed)::
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or otherwise change the period its certificate of exercisability of options incorporation or restricted stock, bylaws or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such planssimilar governing instruments;
(b) Enter issue, deliver, sell, pledge, dispose of or encumber any of its capital stock, ownership interests or other securities, or any options, warrants, convertible securities or other rights to acquire any of its capital stock, ownership interests or other securities, except for (i) the issuance of Shares upon the exercise of Company Stock Options or Company Warrants outstanding on the date hereof in accordance with the terms thereof or (ii) the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except for any dividend or distribution by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company, other than the acquisition of Shares in connection with a cashless or net exercise of Company Stock Options outstanding on the date hereof or in order to pay Taxes in connection with the exercise of any other equity awards (including Company Stock Options) outstanding on the date hereof;
(e) (i) acquire (whether by merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any assets, other than purchases of inventory in the ordinary course of business or pursuant to existing Contracts; or (ii) sell or otherwise dispose of (whether by merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any assets, other than sales or dispositions of inventory in the ordinary course of business or pursuant to existing Contracts;
(f) (i) enter into or amend in any respect any Contract, written, oral or otherwise, or (ii) terminate, or fail to exercise an expiring renewal option or grant a waiver of a provision under, any Contract;
(g) make any capital expenditures, individually or in the aggregate, in excess of $10,000, other than capital expenditures that are budgeted in the Company’s capital expenditure budget set forth in SECTION 5.1(g) of the Company Disclosure Schedule;
(h) (i) other than for borrowings under the Bridge Loan for working capital purposes, incur, assume, guarantee or otherwise become liable for any Indebtedness, or amend or modify in any material respect or prepay or refinance any Indebtedness, (ii) make any loans, advances (other than travel advances to employees in the ordinary course of business) or capital contributions to, or investments in, any other Person, other than the Company or any direct or indirect wholly-owned Subsidiary of the Company, (iii) cancel, release or assign any material Indebtedness of any Person owed to the Company or any of its Subsidiaries, or (iv) withdraw, change or revoke any consent or approval made or required (and provide any further consents or approvals) in connection with the Note and Loan Purchase Agreement and the transactions contemplated thereby;
(i) except as expressly required by any Company Benefit Plan or Contract in existence on the date hereof and made available to the Company, or applicable Law, (i) increase the salary, bonus or other compensation or fringe benefits of, or grant any type of compensation or benefits not previously provided to, any director, officer, employee or independent contractor of the Company or any of its Subsidiaries, (ii) grant or pay any severance, change in control, retention or termination pay, or modifications thereto or increases therein, to any director, officer, employee or independent contractor of the Company or any of its Subsidiaries, (iii) enter into any employment, consulting, change of control or severance agreement or arrangement with any of its present or former directors, officers, employees or independent contractors, (iv) enter into any collective bargaining agreement, neutrality agreement or other Contract with any Union or recognize any Union as the bargaining representative of any employees or (v) establish, adopt or terminate any Company Benefit Plan;
(j) make any material partnership arrangements, joint development agreements or strategic allianceschange in any accounting principles, except as may be required by Law or U.S. GAAP or any official interpretations thereof;
(k) (i) make, change or revoke any material Tax election, (ii) enter into any settlement or compromise of any material Tax liability, (iii) amend any Tax Return with respect to any material Tax, (iv) change any annual Tax accounting period, (v) settle or compromise any material Tax liability, claim, audit or dispute or enter into any closing agreement relating to any material Tax, (vi) surrender any right to claim a material Tax refund, (vii) change any material method of accounting for Tax purposes (or file a request to make any such change) or (viii) waive or extend the statute of limitations with respect to any Tax;
(l) adopt, publicly propose or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization, or file or consent to the filing of a petition in bankruptcy under any provisions of applicable Law;
(m) grant or suffer to exist any Liens on any properties or assets, tangible or intangible, of the Company or any of its Subsidiaries, other than Permitted Liens;
(n) sell, lease, license, transfer, mortgage, encumber or otherwise dispose of any Subsidiary or any material assets, securities, or property except (A) as required pursuant to Contracts existing as of the date hereof and in accordance with their terms or (B) in the ordinary course of business consistent with past practice;
(co) Except as required by law or settle any existing benefit plans and agreements of Action against the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made than settlements of Actions (A) in connection with where the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of amount paid by the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license in settlement does not exceed $10,000 individually or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of businessaggregate, including non-exclusive, enterprise-wide or site licenses.
(eB) Commence that do not impose any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of restriction on the business of the Company or any of its Subsidiaries, provided (C) that provide for a complete release of the Company consults with and its Subsidiaries for all claims and (D) that do not involve the Parent prior to the filing admission of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, wrongdoing by the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto)its Subsidiaries;
(fp) Declare waive, release or pay assign any dividends on rights or claims or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquirepayment, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets liability of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, before the same comes due in each case, except in the ordinary course of business consistent accordance with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bankits terms;
(kq) Incur sell, transfer or license or sublicense any material indebtedness for borrowed money (other than ordinary course trade payables rights in any intellectual property owned by or pursuant licensed to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any Subsidiary of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up or, with respect to any Company Owned IP or any patent or pending patent application included in Company Licensed Registered IP that the aggregate amount that is borrowed thereunder as of Company prosecutes or maintains or has the date hereofauthority to prosecute or maintain, allow or otherwise permit any such intellectual property to become abandoned or otherwise fail to maintain any such intellectual property;
(lr) Except as required by law (i) acquire any fee interest in real property or permitted by SECTION 6.1(C)(ii) amend, adopt modify or amend terminate any Company Scheduled Plan Real Property Lease or increase enter into any new lease for any real property;
(s) change in any material respect the salaries policies or wage rates of any of its employees (except for wage increases practices regarding accounts receivable or accounts payable or cash management or fail to manage working capital in the ordinary course of business and consistent accordance with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(mt) Revalue create any of the assets Subsidiary of the Company or any of its Subsidiaries;
(u) enter into any new line of business, including without limitation writing down or form or commence the value operations of inventoryany joint venture;
(v) amend in a manner that adversely impacts in any material respect the ability to conduct its business, writing off notes terminate or accounts receivable, allow to lapse any material Permits of the Company or its Subsidiaries;
(w) other than in the ordinary course of business consistent with past practice practice, reduce the amount of insurance coverage or as required by GAAP or applicable lawfail to renew any existing insurance policies without replacing such policy with substantially comparable coverage;
(nx) Except as set forth fail to promptly provide to Parent all information or documents described in the Company Disclosure Schedule last sentence of SECTION 3.21(d) that are received, prepared or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person generated by or on behalf of the Company or any of its Subsidiaries.Subsidiaries after the date of execution of this Agreement; or
(sy) Take, or agree in writing or otherwise commit to take, take any of the actions described in the preceding paragraphs (a) through (x). For avoidance of doubt, nothing in this SECTION 6.1(A) THROUGH (R) above, 5.1 is intended to or any action which would cause or would be reasonably likely shall give Parent the right to cause any control the day-to-day operations of the conditions Company in violation of applicable Law or result in the transfer of beneficial ownership of the Company to Parent prior to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedEffective Time.
Appears in 2 contracts
Samples: Merger Agreement (Zevra Therapeutics, Inc.), Merger Agreement (Acer Therapeutics Inc.)
Conduct of Business of the Company. During Except as described in Section 5.01 of the Disclosure Letter or as expressly provided for by this Agreement, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective Time, the Company (which for the purposes of this SECTION 6.1 shall include the Company will conduct and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to will cause each of its Subsidiaries to carry on conduct its operations according to its ordinary and usual course of business in the usual, regular and ordinary courseconsistent with past practice, and to the Company will use and will cause each of its Subsidiaries to use all its commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizationsorganization, to keep available the services of its present current officers and employees and to preserve its the present relationships with customers, suppliers, distributors, licensors, licensees, and others those Persons having significant business dealings relationships with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at Subsidiaries. Without limiting the Effective Time. Except generality of the foregoing and except as otherwise expressly provided for by this Agreement, during the Credit Agreementperiod specified in the preceding sentence, without the Security Agreementprior written consent of Parent (including by electronic mail), or (provided, that Parent shall use its reasonable best efforts to provide a response within five (5) Business Days following the Software Distribution Agreementapplicable request for consent, which requests shall be made solely by the person designated on Section 5.01 of the Disclosure Letter) the Company shall not, not and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed)::
(a) Except as provided in this Agreement issue, sell, grant options or as described in rights to purchase, pledge, or authorize or propose the Company Disclosure Schedulesissuance, acceleratesale, amend or change the period of exercisability grant of options or restricted stockrights to purchase or pledge, any Company Securities or reprice Subsidiary Securities, other than in connection with (1) the exercise of Company Options that are outstanding on the date of this Agreement in accordance with their present terms, (2) the issuance of shares upon the exercise of any options granted under the Company Option Plans or authorize cash payments ESPP pursuant to any purchase period in exchange for any options granted under any effect on the date of such plansthis Agreement in accordance with existing terms and payroll elections, and (3) issuances upon the conversion of the Convertible Notes;
(b) Enter repurchase, acquire or redeem, directly or indirectly, or amend any Company Securities, other than in connection with (1) the forfeiture or expiration of outstanding Company Options, and (2) the withholding of shares of Company common stock to satisfy Tax obligations with respect to the exercise of Company Options pursuant to any obligations contained in the Company Stock Plans;
(c) subdivide, split, combine, exchange, recapitalize, reclassify or enter into any material partnership arrangementssimilar transaction with respect to any of its capital stock or other equity interests or declare, set aside, make or pay any dividend or distribution (whether in cash, stock or property) on any shares of its capital stock (other than cash dividends paid to the Company or one of its wholly owned Subsidiaries by a wholly owned Subsidiary of the Company with regard to its capital stock or other equity interests);
(d) (i) make (x) any acquisition or cause any acquisition to be made, by means of a merger, consolidation, recapitalization, joint development agreements venture or strategic alliancesotherwise, of any material assets or any business or equity interest of any Person or (y) any sale, lease, encumbrance or other disposition of assets or securities of the Company any of its Subsidiaries or any third party, in each case involving the payment of consideration (including consideration in the form of assumption of liabilities) of $1 million or more or the disposition of assets or securities with a fair market value in excess of $1 million, except for purchases or sales of raw materials or inventory made in the ordinary course of business and consistent with past practice, (ii) adopt a plan of complete or partial liquidation, dissolution, recapitalization or restructuring, (iii) enter into any Material Contract or amend any Material Contract in any material respect or terminate any Material Contract or grant any release or relinquishment of any material rights under any Material Contract or (iv) enter into, modify, supplement or amend any material lease or sublease of any real property;
(e) (i) incur, assume or otherwise become liable or responsible for any long term debt or short term debt, except for short-term debt incurred in the ordinary course of business consistent with past practice to fund working capital requirements in an amount not to exceed $5,000,000 at any time, (ii) repay, redeem or repurchase any long-term or short-term debt or (iii) cancel any material debt or claim owed to the Company or any of its Subsidiaries;
(f) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except wholly owned Subsidiaries of the Company;
(g) make any loans, advances or capital contributions to, or investments in, any other Person (other than wholly owned Subsidiaries of the Company);
(h) change in any respect, any financial accounting methods, principles or significant practices used by it, except as required by GAAP or applicable law;
(i) make or change any Tax election, extend the statute of limitations or file any extension request (except for any such actions which do not require the approval of an officer of the Company pursuant to Law) relating to material Taxes with any Governmental Entity, amend any material Tax Return, or settle or compromise any material income Tax liability;
(j) adopt any amendments to its Certificate of Incorporation or Bylaws (or other similar governing documents);
(k) grant any severance or termination pay (other than pursuant to a Company Benefit Plan or Company Benefit Arrangement) which will become due and payable on or after the Effective Time (other than as required by applicable Law), or grant any increases in the compensation or benefits payable to its employees at the vice-president level and above or its board of directors;
(l) adopt, enter into, amend or terminate any collective bargaining or similar labor agreement or any agreement with a works council;
(m) adopt, enter into, amend or terminate any Company Benefit Plan or Company Benefit Arrangement (other than as required by applicable Law or to reflect changes in plan administration);
(n) incur any material capital expenditure or any obligations, liabilities or indebtedness in respect thereof, except for those contemplated by the capital expenditure budget for the relevant fiscal year, which capital expenditure budget has been provided or made available to Parent prior to the date of this Agreement;
(o) hire any person to be employed by the Company or any of its Subsidiaries or terminate the employment of any employee of the Company or any of its Subsidiaries, other than the hiring or firing of an employee below the vice-president level in the ordinary course of business consistent with past practice;
(cp) Except as required by law form or commence the operations of any business or any existing benefit plans corporation, partnership, joint venture, business association or other business organization or division thereof or enter into any new line of business that is material to Company and agreements of its Subsidiaries, taken as a whole;
(q) enter into any material Contract or other material transaction between the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof one hand, and as previously disclosed in writing to Parent any Affiliate or (C) pursuant to written agreements consistent with the past agreements Associate of the Company or any of its Subsidiaries under similar circumstanceson the other hand, other than in the ordinary course of business on terms no less favorable to the Company or its Subsidiary, as applicable, than the terms governing such transactions with third parties;
(dr) Transferpay, license loan or sell advance (other than the payment of compensation, directors’ fees or reimbursement of expenses in the ordinary course of business consistent with past practice, including pursuant to existing indemnification agreements with officers and directors) any person amount to, or entity sell, transfer or otherwise extendlease any properties or assets (real, amend personal or modify any rights to the Company Proprietary Rights (including rights to resell mixed, tangible or relicense the Company Proprietary Rightsintangible) to, or enter into grants to future patent rightsany agreement outside of the ordinary course with, any of its officers or directors or any Affiliate or Associate of any of its officers or directors;
(s) pay, discharge, settle or satisfy any suit, action, claim, proceeding, investigation or other liability (whether contingent, absolute, accrued, unaccrued, asserted, unasserted or otherwise) other than (i) liabilities reflected or reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) disclosed in the Company SEC Reports filed prior to the date hereof, (ii) liabilities incurred in the ordinary course of business, consistent with past practice or (iii) the settlement of any suit, action, claim, proceeding or investigation solely for monetary damages (without any admission of liability or other adverse consequences or restrictions on standard forms the Company, Parent, Merger Sub or the Surviving Corporation) not in excess of $500,000 individually or $1,000,000 in the aggregate;
(t) except in the ordinary course of business consistent with past practice, fail to take any action necessary or advisable to protect or maintain the Intellectual Property owned, used or held for use by the Company or any of its Subsidiaries (or pursuant that is material to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect conduct of the business of the Company or any of its Subsidiaries, provided that Subsidiaries as currently conducted and planned by the Company consults with or any of its Subsidiaries to be conducted, including the Parent prior to prosecution of pending applications for Patents and Trademarks, the filing of such a suit and keeps Parent advised documents or other information or the payment of any maintenance or other fees related thereto; or
(u) offer, agree or commit, in writing or otherwise, to take any of the status and details of such litigation (provided that, notwithstanding foregoing actions. Prior to the foregoingClosing, the Company shall not be required shall, at Company’s expense, use commercially reasonable efforts to obtain Parent's consent effect any necessary corrective change of ownership and recordals with all patent, trademark, and copyright offices and domain name registrars and other similar authorities where, to any claimthe Knowledge of the Company, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, Intellectual Property owned by the Company or any of their affiliates, nor shall its Subsidiaries is recorded in the Company be required to consult with Parent with respect thereto);
(f) Declare name of one or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets more legal predecessors of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (Person other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in provided that Parent notifies the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its SubsidiariesIntellectual Property.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 2 contracts
Samples: Merger Agreement (Endo Pharmaceuticals Holdings Inc), Merger Agreement (American Medical Systems Holdings Inc)
Conduct of Business of the Company. (a) During the period from the date of Pre-Closing Period, except as expressly permitted or required by this Agreement and continuing until the earlier or as expressly set forth in Section 4.1 of the termination of this Agreement pursuant Disclosure Schedule or otherwise consented to its terms and the Effective Timeby Parent in writing, the Company shall (which for i) operate the purposes business of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usualordinary course and consistent with past practice in all material respects, regular and ordinary course, and to (ii) use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizations, keep available the services of the Company’s and its Subsidiaries’ present officers and employees (other than termination for cause) and (iii) use its commercially reasonable efforts to preserve the Company’s and its Subsidiaries’ beneficial relationships with customers, suppliers, distributors, licensors, licensees, licensees and others having such business dealings with it; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 4.1(b) shall be deemed a breach of this Section 4.1(a) unless such Subsidiariesaction would constitute a breach of such specific provision.
(b) During the Pre-Closing Period, except as expressly required by this Agreement or as expressly set forth in Section 4.1 of the Disclosure Schedule or otherwise consented to by Parent in writing prior to the end that taking of the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreementapplicable action, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, neither the Company shall not, and shall not permit nor any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):shall:
(ai) Except as provided make any capital expenditure or expenditures in this Agreement excess of $100,000 individually or as described $250,000 in the Company Disclosure Schedulesaggregate, accelerate, amend or change other than capital expenditures contemplated by the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange Company’s capital expenditure plan for any options granted under any of such plansfiscal year 2015;
(bii) Enter into any material partnership arrangements(A) sell, joint development license (other than non-exclusive licenses of Technology or service related agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company otherwise assign or any of its Subsidiaries, grant any severance or termination pay (i) convey to any executive officer or (ii) to Person any other employee except payments made (A) in connection with the termination ownership of employees who are not executive officers in amounts consistent with the Company's policies and past practices any Company Intellectual Property, or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent enter into any Contract with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights respect to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rightsdevelopment of any Technology with any other Person, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.;
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result other than in the material impairment ordinary course of a valuable aspect business consistent with past practice, (A) enter into any Contract which would have been required to have been disclosed on Section 2.13(a) of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent Disclosure Schedule had such Contract been entered into prior to the filing date of this Agreement or (B) terminate, waive or amend any such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, Contract or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto)Material Contract;
(fiv) Declare enter into any material Contract that would be breached by, or require the consent of any third party in order to continue in full force following consummation of the transactions contemplated by this Agreement;
(v) release any Person from, or modify or waive any provision of, any confidentiality, standstill or other similar Contract restricting such Person from taking any action;
(vi) declare, set aside, or pay any dividends on or make any other distributions (whether in cash, stock or propertyproperty or any combination thereof) or make any other actual, constructive or deemed distribution in respect of any of its capital stockCompany Capital Stock; provided that the Company shall be permitted to make, or declare, set aside and pay cash dividends that are required to be paid on the Company Series A Preferred Stock;
(vii) split, combine combine, subdivide 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 capital stock of the CompanyCompany Capital Stock;
(gviii) Repurchase issue, grant, deliver, sell, dispose of, pledge or otherwise acquireencumber, directly or indirectlypurchase, redeem or otherwise acquire any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claimssecurities convertible into such shares, or subscriptions, rights, warrants or options to acquire any such shares or convertible securities, other than (A) issuances, sales or deliveries of Company Common Stock pursuant to exercises of Company Options or conversion of Company Series A Preferred Stock or the withholding of shares of Company Common Stock to satisfy net settlement or Tax obligations with respect to equity awards in each case, except in accordance with the ordinary course terms thereof and (B) repurchases from Company Personnel following their termination pursuant to the terms of business consistent with past practice or in connection with their pre-existing agreements entered into between the to purchase Company and Silicon Valley BankOptions or Company Capital Stock;
(kix) Incur amend or otherwise modify any material indebtedness for borrowed money (other than ordinary course trade payables Company Charter Documents or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereofSubsidiary Charter Documents;
(lx) Except as required by law adopt a plan or permitted by SECTION 6.1(C)agreement of complete or partial liquidation, adopt dissolution, merger, consolidation, restructuring, recapitalization or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets other reorganization of the Company or any of its Subsidiaries;
(xi) directly or indirectly acquire any Person or other business enterprise or division thereof or any equity interest therein (whether by merger, including without limitation writing down consolidation, sale of stock, sale of assets or otherwise);
(xii) sell, lease, convey or otherwise dispose of any material assets of the value of inventory, writing off notes or accounts receivableCompany and its Subsidiaries, other than in the ordinary course of business consistent with past practice practice;
(xiii) settle or compromise any pending or threatened Action in excess of $50,000 individually or $100,000 in the aggregate;
(xiv) incur any Indebtedness with a principal or notional amount in excess of $50,000;
(xv) grant any loans, advances or capital contributions to or investments in any other Person or purchase debt securities of any other Person;
(xvi) mortgage or pledge any of its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens);
(xvii) except (x) pursuant to a Company Employee Plan in effect as of the date of this Agreement, (y) as required by applicable Law, or (z) as otherwise permitted under another subsection of Section 4.1(b), (A) adopt, establish, amend or terminate any Company Employee Plan (including any underlying agreements), or any agreement, plan, policy or arrangement that would constitute a Company Employee Plan if it were in existence on the date hereof, except any amendments required to maintain the qualified status of such Company Employee Plan and except as permitted under subsection (D) hereof, (B) increase, or accelerate the vesting or payment of, the compensation or other benefits payable to or to become payable to any Company Personnel, and except as permitted under subsection (D) hereof, (C) enter into any employment Contract (except (x) to the extent necessary to replace any departing Company Personnel without any material increase in compensation or benefits or fees from the prior employee’s or independent contractor’s annual compensation or (y) for employment Contracts terminable on less than 30 days’ notice without penalty), (D) grant, provide or promise to grant or provide any severance, retention, termination or similar payments (in cash or otherwise), bonus, or equity or equity-based incentive awards to any Company Personnel, except that the Company may provide bonuses not to exceed $250,000 in the aggregate, (E) terminate (other than for “cause”), promote or change the title of any employee or other service provider or (F) hire or make an offer to hire any new employee, officer, consultant or other service provider (except as permitted under subsection (C));
(xviii) enter into, amend, terminate or extend any Collective Bargaining Agreement with a works council or other union;
(xix) except as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business business, materially revalue any of liabilities its assets (whether tangible or intangible), including writing down the value of the type reflected inventory or reserved against in the Company Financial Statements (or in the notes thereto); 41writing off accounts receivable;
(oxx) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money)Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(qxxi) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, take any of the actions described in SECTION 6.1(Athis Section 4.1(b). Parent acknowledges and agrees that (i) THROUGH nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or the Company’s Subsidiaries’ operations during the Pre-Closing Period, and (Rii) aboveduring the Pre-Closing Period, or any action which would cause or would be reasonably likely the Company shall exercise, subject to cause any and consistent with the terms and conditions of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3this Agreement, not to be satisfiedcomplete control and supervision over it and its Subsidiaries’ operations.
Appears in 2 contracts
Conduct of Business of the Company. During Except as otherwise contemplated by this Agreement (including Section 7.12) or without the period prior written consent of the Purchaser, from the date of this Agreement and continuing until to the earlier of the termination of this Agreement pursuant to its terms and the Effective TimeClosing Date, the Company shall (which for and the purposes of this SECTION 6.1 Semlers shall include cause the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayedto), conduct its operations in the ordinary and usual course of business consistent with past practice, and in connection therewith the Company shall use its best efforts to carry on preserve its business and to cause each the business organization of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizationsCompany intact, keep available the services of its present the Company's officers and employees and preserve its maintain satisfactory relationships with suppliers, customers, suppliers, distributors, licensors, licensees, distributors and others having business dealings relationships with the Company or any such Subsidiaries, to (and in connection therewith will pay payables and collect receivables in the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Timeordinary course consistent with past practice). Except as expressly provided for contemplated by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall will not permit do any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its termsfollowing, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Purchaser:
(a) Except as provided in this Agreement amend its articles of incorporation or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansbylaws;
(b) Enter into declare or pay any material partnership arrangements, joint development agreements dividend or strategic alliances, except in the ordinary course of business consistent with past practicemake any other distributions to its shareholders;
(c) Except as required by law redeem or otherwise acquire, issue or sell any Stock or issue any capital stock or any Right or amend any material term of any Stock or Right;
(d) adopt, enter into, terminate or amend any Benefit Plan or collective bargaining agreement that would increase the expense of maintaining any Benefit Plan or collectively bargained agreement;
(e) make or grant to any executive officer, director or employee any increase in compensation or benefits, except as may be required under existing benefit plans and agreements disclosed to Purchaser, or grant, agree or otherwise become obligated to pay (whether on the occurrence of the Company any future event or any of its Subsidiaries, grant otherwise) any severance or termination pay (i) to any executive officer officer, director or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(gf) Repurchase incur or otherwise acquire, directly assume any liabilities or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, obligations other than in the ordinary course of business consistent with past practice, or incur or assume any Indebtedness (other than drawings on the Company's existing $3,000,000 revolving credit facility with the U.S. National Bank of Oregon which drawings shall be used solely for the Company's working capital purposes and other than an extension (for which no material consideration shall be paid) to no later than September 1, 1998 of the Company's guaranty of the Xxxxxx'x indebtedness to CCI); provided, that any such extension shall not relieve CCI from its obligations under Sections 7.18 and 9.8 to release the Company from the Company's obligations to CCI at the Closing;
(g) enter into any agreement or arrangement with any shareholder of the Company or any Affiliate or Associate thereof, or make any additional advances to any such Person;
(h) make any change in any accounting practice or policy other than as required in accordance with GAAP;
(i) acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets (other than inventory and raw materials acquired in the ordinary course of business consistent with past practice);
(j) sell, lease or otherwise dispose of any assets (other than inventory or raw materials sold or otherwise disposed of in the ordinary course of business in a manner consistent with past practice or as required by GAAP or applicable lawcontemplated in Section 7.12);
(nk) Except as set forth in the Company Disclosure Schedule abandon, surrender, terminate or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (amend in any one casematerial manner the terms of any Approval or material contract;
(l) enter into any agreement, contract or $500,000 understanding which, following the Merger, would require Purchaser to distribute any products or services (in other than the aggregate prior to October 1, 2001products or services currently being sold or offered by the Company) or $200,000 (in the aggregate in through any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise)Person, including, without limitation, under any employment distributor or dealer, except in connection with action permitted by Section 6.1(m);
(m) enter into any license agreement, contract or any other arrangement or understanding regarding, or waive or abandon any rights with respect to, Intellectual Property, terminate or amend in any respect the Ralin License Agreement or settle any claims with respect to any bonus or special remunerationthe matter referred to on Schedule 4.10 relating to PaceArt (the "PaceArt Matter"); provided, other than the paymenthowever, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in that the Company Financial Statements (or may, in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Returnconsultation with Purchaser, enter into any closing agreement, settle any claim or assessment arrangements relating to the PaceArt Matter to the extent such arrangements are disclosed on Schedule 4.10 and which in respect of Taxes all material respects are consistent with the terms disclosed on Annex I to Schedule 4.10 (except settlements effected solely through payment of immaterial sums of moneyPaceArt Term Sheet), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(pn) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant agree to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiariesforegoing.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 2 contracts
Samples: Merger Agreement (Alaris Medical Inc), Merger Agreement (Alaris Medical Systems Inc)
Conduct of Business of the Company. During the period from On and after the date of hereof and prior to the Closing Date, and except as contemplated by this Agreement and continuing until the earlier of the termination of this Agreement pursuant or as otherwise consented to its terms and the Effective Time, the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent by Laredo in writing (which consent in Laredo’s sole discretion):
(a) the Company shall, and each Contributor shall not be unreasonably withheld or delayed)cause the Company to, to carry on its business and to cause each of its Subsidiaries to carry on use commercially reasonable efforts to:
(i) conduct its business in the usualOrdinary Course of Business and in accordance with the Company Approved Budget, regular including drilling-related activity and ordinary coursecreating, incurring or assuming any Indebtedness as set forth in the Company Approved Budget;
(ii) operate, maintain and to use otherwise deal with the Company Properties and cause each all of its Subsidiaries to use all commercially reasonable efforts consistent other Company Assets in accordance with past practices and policies to in accordance with applicable Company Leases and other Contracts and applicable Laws and Approvals;
(iii) preserve intact its present business organizationsorganization, keep available the services of its present current officers and employees until Closing at their current rates of compensation, commissions and benefits and retained employees thereafter and endeavor to preserve its relationships with customers, suppliers, distributors, licensors, licensees, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect at the Closing;
(iv) keep and maintain accurate books, records and accounts;
(v) maintain in full force and effect existing insurance policies and binders of the Company subject only to variations required by the Ordinary Course of Business, or else will obtain, prior to the lapse of any such policy or binder, substantially similar coverage with insurers of recognized standing;
(vi) pay all Taxes imposed upon any of the Company Assets or with respect to its franchises, business, income or assets before any penalty or interest accrues thereon;
(vii) pay all claims and expenses (including claims and expenses for labor, services, materials and supplies) when they become due and payable in accordance with their terms;
(viii) pay all wages and other compensation accrued by all employees of the Company through the Closing Date when they become due and payable in accordance with the obligations of the Company under any applicable Law, labor or employment practices and policies, or any collective bargaining agreement or other labor contract or individual agreement to which the Company is a party, or by which the Company may be bound;
(ix) comply in all material respects with the requirements of applicable Laws and Approvals of any Governmental Authority and comply with and enforce the provisions of the Company Material Contracts, including paying when due all Indebtedness, payables, rentals, royalties, expenses and other Liabilities relating to its business or the Company Assets;
(x) promptly notify Laredo of the receipt of any written notice or claim, or any threat of a notice or claim, of which the Company, Contributors or any of their respective Affiliates become aware after such date, relating to any default or breach by the Company or any such Subsidiariesof its Affiliates under, or any termination or cancellation of, any Company Material Contract or Company Lease (or in the case of any production sales contract, any written notice of intent to exercise any price renegotiation or other option available to the purchasers thereunder, to terminate such contract, to alter pricing, delivery, or other material provisions thereof, or to contest or dishonor any material provisions thereof);
(xi) at all times preserve and keep in full force and effect its corporate or other legal existence and rights and franchises material to the end that performance by the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by obligations under this Agreement; and
(xii) take or omit to take any action that is intended or could reasonably be expected to, individually or in the Credit Agreementaggregate, result in any of the Security Agreementrepresentations or warranties contained herein becoming untrue or inaccurate in any material respect; and
(b) without limiting the generality of the foregoing, or other than in accordance with the Software Distribution AgreementCompany Approved Budget, the Company shall not, and shall Contributors will not permit any of its Subsidiaries the Company to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed)::
(ai) Except as provided declare, set aside or pay any dividend or distribution, whether in this Agreement cash, Capital Stock or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
property (b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements combination thereof); issue, sell, purchase, redeem or otherwise acquire any Capital Stock or other equity interests of the Company or issue any option, warrant or right relating to its Capital Stock or other equity interests or any securities convertible into or exchangeable for any Capital Stock or other equity interests; liquidate, dissolve, merge, consolidate, restructure, recapitalize or otherwise reorganize the Company or make any other change in the capitalization of the Company; split, combine or reclassify any of its SubsidiariesCapital Stock or other outstanding equity interests; or enter into, grant or otherwise become a party to, any severance Contract relating to the voting, registration or termination pay (i) to transfer of any executive officer shares of Capital Stock or other equity interests of the Company;
(ii) to any other employee except payments made (A) in connection with increase the termination rate or terms of employees who are not executive compensation payable or to become payable by the Company to its directors, officers in amounts consistent with or employees, except as required by applicable Law or pursuant to any Company Employee Plans as of the Company's policies and past practices date hereof; or (B) increase the rate or terms (including vesting status) of any bonus, insurance, pension or other employee benefit plan or arrangement made to, for or with any such directors, officers or employees, except as required by applicable Law or pursuant to written agreements outstanding, or policies existing, on any Company Employee Plans as of the date hereof and as previously disclosed hereof;
(iii) (A) amend its Organizational Documents or the Certificate of Designations, (B) amend in writing to Parent any material respects or terminate any Company Lease or Company Material Contract or (C) pursuant assign any Company Lease or Company Material Contract to written agreements consistent any Person;
(iv) make an equity investment in any other Person or acquire by merger or consolidation or purchase of equity interests any corporation, partnership, association or any other business organization or division thereof;
(v) engage in any line of business in which it is not engaged as of the date hereof;
(vi) make any change in any method of accounting or accounting principles;
(vii) enter into any settlement of any material issue with the past agreements of respect to any assessment or audit or other administrative or judicial proceeding with respect to Taxes for which the Company or any of its Subsidiaries under similar circumstancesLaredo may have Liability;
(dviii) Transfer, license terminate or sell to voluntarily relinquish any person Approval from any Governmental Authority or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) Person necessary for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect conduct of the business of the Company or any Company Asset, except in the Ordinary Course of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto)Business;
(fix) Declare establish, amend or pay terminate a Company Employee Plan or any dividends on other employee benefit plan except for amendments and terminations required by applicable Law or in accordance with the applicable Company Employee Plan in existence as of the date hereof; or enter into, amend or terminate any consulting, employment, severance, change of control, bonus, termination or similar Contract with any Person;
(x) make any loan to or enter into any transaction with any Company Employee, officer, director or Affiliate of the Company, except for the payment of salaries, commissions and benefits to which all similarly situated employees are generally entitled; or make any other distributions (whether in cash, stock or property) in respect of loan to any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock consultant of the Company;
(gxi) Repurchase resign, transfer or otherwise acquirevoluntarily relinquish any control, directly possession or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating right it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding has as of the date of this Agreement, (including as operator of any Property), or take any action intended to cause any Third Party to seek removal of the Company as operator of any Company Property, under the applicable operating agreement or otherwise;
(ixii) Causesell, permit lease or propose any amendments to the Company's certificate of incorporation or by-lawssublease, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Selltransfer, lease, license, encumber farm out or otherwise dispose of or mortgage, pledge or otherwise encumber any Company Asset (except for Permitted Encumbrances and sales of Hydrocarbons in the properties Ordinary Course of Business) that have a value at the time of such disposition of $500,000;
(xiii) acquire any oil and gas interests or any other assets that have a value at the time of such acquisition of $2,000,000 or more;
(xiv) enter into any hedging or derivative Contracts (financial, commodity or otherwise);
(xv) agree with any Person to limit or otherwise restrict in any manner the ability of the Company to compete or any of otherwise conduct its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bankbusiness;
(kxvi) Incur any material indebtedness assume, endorse, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates Liabilities of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other Person other than in the ordinary course Ordinary Course of business consistent with past practice or as required by GAAP or applicable lawBusiness;
(nxvii) Except as set forth execute any joint operating agreement or voluntary pooling agreement other than in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess Ordinary Course of $100,000 Business;
(in any one casexviii) or $500,000 (in the aggregate prior elect to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or be a non-consent co-owner with respect to any bonus or special remunerationThird Party AFE, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return joint operating agreement or any amendment to a material Return, enter into any closing applicable pooling agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(pxix) Except for enter into any change which is required by reason of contract that would constitute a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by itMaterial Contract;
(qxx) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt change or make any person, entity or action (other than Parent) not subject Tax elections with respect to the provision of Section 203 of the Delaware Law Company or any other potentially applicable anti-takeover or similar statute or regulationits assets;
(rxxi) Release reduce or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce terminate (or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement reduced or terminated) any insurance coverage now held in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.Assets; or
(sxxii) Take, resolve or agree in writing enter into or otherwise adopt any plan or agreement with respect to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedforegoing.
Appears in 2 contracts
Samples: Contribution Agreement (Laredo Petroleum - Dallas, Inc.), Contribution Agreement (Laredo Petroleum Holdings, Inc.)
Conduct of Business of the Company. During the period from the date of ---------------------------------- this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, the Company agrees (except to the extent that Parent shall otherwise consent in writing or as contemplated by this Agreement) to carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to pay its debts and Taxes when due, to pay or perform other obligations when due, and, to the extent consistent with such business, to use all reasonable efforts consistent with past practice and policies to preserve intact its present business organization, keep available the services of its present officers and key employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees and others having business dealings with it, all with the goal of preserving unimpaired its goodwill and ongoing businesses at the Effective Time. The Company shall promptly notify Parent of any materially negative event involving or adversely affecting the Company or its business. In addition, except as permitted by the terms of this Agreement, without the prior written consent of Parent, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective Time, the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizations, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit do any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):following:
(a) Except as provided set forth in this Agreement or as described in the Company Disclosure SchedulesSchedule 5.1(a), waive any stock repurchase --------------- rights, accelerate, amend amend, or change the period of exercisability of options any outstanding Company Options or restricted stockCompany Common Stock subject to vesting, or reprice options Company Options granted under the Company Option Plans Plan or authorize cash payments in exchange for any options granted under any of such plansoptions;
(b) Enter Make any payments or enter into any material partnership arrangements, joint development agreements commitment or strategic alliances, except transaction outside of the ordinary course of business in excess of $100,000 or in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it200,000;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 2 contracts
Samples: Agreement and Plan of Reorganization (Seagate Technology Malaysia Holding Co Cayman Islands), Agreement and Plan of Reorganization (Seagate Technology Inc)
Conduct of Business of the Company. During the period from From the date of this Agreement and continuing hereof until the earlier Closing and except as otherwise specified herein or in a Schedule hereto, Seller will cause the Company to (i) conduct its business only in the ordinary and usual course and in a manner substantially consistent with past practices, (ii) maintain in good repair, at its expense, all of its material properties necessary to the operation of the termination business of this Agreement pursuant to its terms and the Effective Time, the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to (iii) use and cause each of its Subsidiaries to use all commercially reasonable best efforts consistent with past practices and policies to preserve intact its present business organizations, keep available the services of its present officers and employees and preserve its relationships with customerslicensors, suppliers, distributorsdealers, licensors, licensees, customers and others having material business dealings relationships with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at and maintain the Effective Timematerial rights and franchises of the Company and its Subsidiaries. Except Trigon and Seller will cause the management of the Company to meet with Buyer as expressly provided for by this Agreementreasonably requested on a regular basis to discuss the general status of the ongoing operations of the Company and any material developments relating to its business. Trigon and Seller will as promptly as practicable notify Buyer (w) of any emergency or material change in the normal conduct of the business or operations of the Company and its Subsidiaries, (x) of the Credit Agreement, the Security Agreementthreat of, or the Software Distribution Agreementinitiation of, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of litigation involving the Company or any of its Subsidiaries, grant (y) of the initiation of any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements investigation of the Company or any of its Subsidiaries under similar circumstances;
by any party, whether private or governmental, and (dz) Transfer, license or sell to of any person or entity or otherwise extend, amend or modify any rights to material budget revisions involving the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms business of the Company or any and its Subsidiaries; will keep Buyer reasonably informed of developments with respect to such events; and will afford Buyer's representatives access that is reasonable under the circumstances to all materials in its Subsidiaries possession relating thereto upon reasonable notice. Notwithstanding the foregoing, Seller and its Affiliates (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company and its Affiliates) may, in good faith determines their sole discretion and without any need to consult with Buyer, take any action they deem appropriate with respect to any litigation, arbitration or other proceeding Seller and such Affiliates may be a party to, whether actual or threatened, relating to disputes with the selling shareholders of Computerized Medical Communications, Inc. and its affiliate CMC Technologies Corp. (collectively, the "CMC Dispute"), including, but not limited to, settlement, indemnification, release or forbearance; provided, however, that failure to commence suit would result in the material impairment of a valuable aspect of the business of no such action shall restrict or adversely affect the Company or any of its Subsidiaries. To the extent reasonably requested by Seller or such Affiliates after the Closing Date, provided that the Company consults with the Parent prior Buyer will make available to the filing of Seller or such Affiliates on a suit timely basis and keeps Parent advised of the status during normal business hours such books, records, documents and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) employees of the Company Disclosure Schedules;
(h) Except and its Subsidiaries as required Seller may deem necessary or advisable in order to deal with the CMC Dispute. Any reasonable third-party out-of- pocket expenses incurred by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities Affiliates as a result of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder preceding sentence shall be reimbursed by Trigon as of the date hereof;
(l) Except promptly as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason practicable after presentation of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each reasonably detailed invoice describing such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiariesexpenses.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Conduct of Business of the Company. During the period from the date of this Agreement Date and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, :
(a) the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on conduct its business and to cause each of its Subsidiaries to carry on its business solely in the usual, regular and ordinary course, 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 to use and cause each in compliance with all applicable Legal Requirements;
(b) the Company shall (i) pay all of its Subsidiaries debts and all Taxes when due, subject to good faith disputes over such debts or Taxes, (ii) pay or perform its other obligations when due, (iii) use all commercially reasonable efforts consistent with past practice and policies to collect accounts receivable when due and not extend credit outside of the ordinary course of business consistent with past practices, (iv) sell Company Products consistent with past practices as to license, service and maintenance terms, incentive programs, and in accordance with GAAP requirements as to Table of Contents revenue recognition and (v) use its commercially reasonable efforts consistent with past practice and policies to preserve intact its present business organizations, keep available the services of its present officers and key employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company or any such Subsidiariesit, to the end that the its goodwill and ongoing businesses of Company and each of its Subsidiaries shall be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, Closing;
(c) the Company shall notpromptly notify the Acquirer of any change, and shall occurrence or event not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstandingbusiness, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stockchange, occurrence or splitevent which, combine individually or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person fromchanges, or waive or permit the waiver of any provision ofoccurrences and events, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to would reasonably be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely expected to cause any of the conditions to the Merger closing set forth in SECTIONS 7.1 OR 7.3, Article 9 not to be satisfied;
(d) the Company shall assure that each of its Contracts (other than with Acquirer) entered into after the Agreement Date will not require the procurement of any consent, waiver or novation or provide for any change in the obligations of any party in connection with, or terminate as a result of the consummation of, the Merger, and shall give reasonable advance notice to Acquirer prior to allowing any Material Contract to lapse or terminate by its terms.
Appears in 1 contract
Samples: Merger Agreement (Identiv, Inc.)
Conduct of Business of the Company. During All parties mutually agree that during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Timeprovisions of Section 8.1 hereof or the Closing, the Company, Parent and Merger Sub each shall (unless otherwise required by this Agreement or Company (which for the purposes of this SECTION 6.1 shall include the Company and each of has given its Subsidiaries) agrees, except prior written consent to Parent or Merger Sub or Parent has given its prior written consent to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)Company, to carry on its business and to cause each of its Subsidiaries to as the case may be) carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts course consistent with past practices practice, to pay its Liabilities and Taxes consistent with its past practices, to pay or perform other obligations when due consistent with its past practices, subject to any good faith disputes over such Liabilities, Taxes and other obligations and, to the extent consistent with such business, to use reasonable efforts and institute all policies to preserve intact its present business organizationsorganization, keep available the services of its present officers and employees and key employees, preserve its relationships with customers, suppliers, distributors, licensors, licensees, independent contractors and others other Persons having business dealings with it and to cause its Subsidiaries to do the Company or any such Subsidiariessame, to all with the end that the express purpose and intent of preserving unimpaired its goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective TimeClosing. Except as expressly provided for by Notwithstanding any other provisions in this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, have the right to negotiate and shall not permit any of its Subsidiaries to, prior to settle the Effective Time or earlier termination of Navy Billing Dispute. Except as expressly contemplated by this Agreement pursuant to its termsor disclosed in Schedules, neither (1) Company, on the one hand, nor (2) Parent or Merger Sub on the other hand, will, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedulesother, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, voluntarily take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to taketake any action that would make any of its representations or warranties contained in this Agreement untrue or incorrect or prevent the applicable party (or parties) from performing or cause the applicable party (or parties) not to perform its agreements and covenants hereunder. Except as expressly contemplated by this Agreement or disclosed in Schedules, the Company will not, without the prior written consent of the Parent, voluntarily take or agree in writing or otherwise to:
(a) take any of the actions described in SECTION 6.1(ASection 2.7;
(b) THROUGH issue additional shares of its or their, as applicable, capital stock or grant any warrants, options or other rights to acquire shares of its or their, as applicable, capital stock;
(Rc) abovemake any capital expenditures or commitments for additions to property, plant or any action which would cause or would be reasonably likely to cause any equipment of the conditions Company constituting capital assets individually in an amount exceeding twenty-five thousand dollars ($25,000);
(d) incur any additional long-term debt, short-term debt or liabilities to the Merger set forth in SECTIONS 7.1 OR 7.3Company Shareholders or their Affiliates;
(e) distribute any assets or make any payments of any kind to Company Shareholders or their Affiliates, not to be satisfiedexcept for reasonable rent payments and travel related expenses;
(f) enter into or continue any commercial relationships of any kind with Company Shareholders or their Affiliates, except for facilities and travel related matters.
Appears in 1 contract
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company (which for the purposes of this SECTION 6.1 Section 4.1 shall include the Company and each of its Subsidiariessubsidiaries) agrees, except to the extent that Parent Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary coursecourse in substantially the same manner as heretofore conducted, to keep financial records of the Company in accordance with sound business practices, to pay its debts and taxes when due subject to good faith disputes over such debts or taxes, to pay or perform other material obligations when due, to file all necessary and/or required forms, reports and documents required to be filed with the SEC ("Future SEC Reports") and to prepare such Future SEC Reports in accordance with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such Future SEC Reports, including without limitation, Section 10(b)(5) of the Securities Act, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its the Company's present business organizations, to the best of its ability and except as a result of announcement of the signing of this Agreement, to keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company or any such SubsidiariesCompany, to the end that the Company's goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. The Company shall promptly notify Purchaser of any event or occurrence not in the ordinary course of business of the Company, and will not enter into or amend any agreement or take any action which reasonably would be expected to have a Material Adverse Effect on the Company. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (Purchaser, which consent shall will not be unreasonably withheld or delayed):
withheld: (a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerateAccelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Share Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
; (b) Enter Create any new subsidiaries, or enter into any material partnership arrangements, joint ventures, joint development agreements or strategic alliances, except in the ordinary course of business consistent agreements to create standards or agreements with past practice;
"Standard" bodies; (c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant Grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent Purchaser or (C) pursuant to written agreements consistent with the Company's past agreements of the Company or any of its Subsidiaries under similar circumstances;
; (d) Transfer, Transfer or license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Intellectual Property Rights (including rights to resell or relicense the Company Proprietary Intellectual Property Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a nonEnd-exclusive license User Licenses entered into in the ordinary course of businessbusiness consistent with past practices (which End-User Licenses may include, including without limitation, non-exclusivematerial changes, enterprisebut may not include a right to modify, distribute or sublicense the software covered by such End-wide User Licenses, and which may include, or site licenses.
have in connection with such End-User License, a software escrow containing release conditions consistent with escrow agreements previously entered into by the Company); (e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its SubsidiariesCompany's business, provided that the Company consults with the Parent Purchaser prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
suit; (f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stockshare capital, or split, combine or reclassify any of its share capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of share capital stock of the Company;
; (g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
Ordinary Shares; (h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on Issue, deliver or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant delivery or sale of, any shares Company Ordinary Shares or any other security of its capital stock the Company, or of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue issue, any such shares shares, securities or other convertible securities, other than (i) the issuance of shares of Company Stock (with Company Rights attached thereto) Ordinary Shares pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants therefor outstanding as of the date of this Agreement;
Agreement consistent with the terms of the applicable Company Share Option Plan, and (ii) shares of Company Ordinary Shares issuable to participants in the Stock Purchase Plan consistent with the terms of that Plan; (i) Cause, permit or propose any amendments to the Company's certificate Memorandum of incorporation Association or by-laws, except as required by Articles of Association or the terms Articles (or Certificates) of Incorporation or Bylaws of any agreement between of the Company and Company's subsidiaries (other than any holder of Company Series E Preferred Stock entered into on or prior to amendments specifically provided for in the date of this Agreement;
Resolution); (j) Sell, lease, license, encumber or otherwise dispose of any of the Company's properties or assets which are material, individually or in the aggregate, to the business of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
Company; (k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
; (l) Except as required by law or permitted by SECTION 6.1(C), adopt Adopt or amend any Company Scheduled Employee Benefit Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock share purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration in excess of $50,000 to any individual director or employee;
, or $400,000 to all directors and employees; (m) Revalue any of the assets of the Company or any of its SubsidiariesCompany's assets, including without limitation writing down the value of inventory, writing off notes or accounts receivable, receivable other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
practice; (n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1Schedules, pay, discharge or satisfy in an amount in excess of $100,000 50,000 (in any one case) or $500,000 100,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001aggregate), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities and of the type reflected or reserved against in the Company Financial Statements Financials (or in the notes thereto); 41
(o) Except as required by applicable Tax lawset forth in the Company Schedules, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, Intentionally take any action to exempt or make any personaction, entity or action (other than Parent) not subject to including the provision acceleration of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release vesting of any Person fromoptions, warrants, restricted shares or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement other rights to which any acquire shares of the Company or any of its Subsidiaries is a party or under Ordinary Shares, which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any interfere with Purchaser's ability to account for the Acquisition as a pooling of interests; (q) Incur costs and expenses in excess of $1,250,000, in the aggregate, in connection with the preparation, negotiation and execution of this Agreement and the completion of the conditions transactions contemplated hereby, including without limitation, costs and expenses of lawyers, accountants, investment bankers and other consultants or representatives, but excluding any filing fees and printing and mailing costs incurred in connection with the Registration Statement or Proxy Statement and fees and expenses which may be owed to Broadview Associates; (r) Enter into any mortgage, indenture, lease, contract or other agreement, the Merger set forth in SECTIONS 7.1 OR 7.3terms of which conflict with or are violated by, not or under which a default occurs or will occur, by or as a result of this Agreement or the consummation of the Acquisition, which conflict, violation or default would, individually or collectively, be material; (s) Voluntarily enter into any agreement, judgment, injunction, order or decree binding upon the Company or its subsidiaries or the Company Intellectual Property Rights, which has or could reasonably be expected to have the effect of prohibiting or materially impairing any material current or currently proposed business practice of the Company, any acquisition of material property by the Company or the conduct of business by the Company as currently conducted or as proposed to be satisfied.conducted by the Company;
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Learmonth & Burchett Management Systems PLC \England\)
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective TimeClosing Date, the Company shall operate the business of the Company, in the ordinary course of business consistent with past practices, except (a) as specifically disclosed in Section 4.1 of the Disclosure Schedule, (b) with the prior written consent of Parent (the decision with respect to which for the will not be unreasonably delayed) or (c) as specifically contemplated by this Agreement. For purposes of this SECTION 6.1 shall include hereof, actions taken by the Company to perform the transactions contemplated to be taken by the Contribution Agreement shall not be restricted under this Section 4.1. The Company agrees to pay Indebtedness for borrowed money and each Taxes of its Subsidiaries) agreesthe Company when due (subject to the right of Parent to review and approve any Tax Returns in accordance with this Agreement), except to use commercially reasonable efforts to pay or perform other obligations when due, and, to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)consistent therewith, to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its the present business organizationsorganizations of the Company, keep available the services of its the present officers and employees Employees of the Company, preserve the assets and technology of the Company and preserve its the relationships of the Company with customers, suppliers, distributors, licensors, licensees, and others having business dealings with them, all with the Company or any such Subsidiaries, to the end that goal of preserving unimpaired the goodwill and ongoing businesses of the Company and each of its Subsidiaries be unimpaired at the Effective TimeClosing. Except The Company shall promptly notify Parent of any material event involving the Company that arises during the period commencing with the date of this Agreement and continuing until the earlier of the termination date of this Agreement or the Closing Date. Without limiting the generality of the foregoing, except (i) as expressly provided for contemplated by this Agreement, (ii) as expressly set forth in Section 4.1 of the Credit Agreement, the Security AgreementDisclosure Schedule, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without (iii) with the prior written consent of Parent (the decision with respect to which consent shall will not be unreasonably withheld delayed), the Company shall not from and after the date of this Agreement and continuing until the earlier of the termination of this Agreement or delayed):the Closing Date:
(a) Except as provided in this Agreement make any expenditure or as described enter into any commitment or transaction exceeding $50,000 individually or $200,000 in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansaggregate;
(b) Enter (i) sell or license or transfer to any Person or entity any rights to any Company Intellectual Property or Technology or enter into any material partnership arrangements, joint development agreement with respect to any Company Intellectual Property or Technology with any Person or with respect to any Intellectual Property Rights or Technology of any Person (other than non-exclusive agreements or strategic alliances, except to provide Company Products to end-users pursuant to agreements that have been entered into in the ordinary course of business consistent with past practicepractices that do not materially differ in substance from the Standard Form Agreements), (ii) buy or license any Intellectual Property Rights or Technology or enter into any agreement with respect to the Intellectual Property Rights or Technology of any Person or entity, (iii) enter into any agreement with respect to the development of any Intellectual Property Rights or Technology with a third party, or (iv) change pricing or royalties charged by the Company to its customers or licensees, or the pricing or royalties set or charged by Persons who have licensed Intellectual Property Rights or Technology to the Company;
(c) Except as required by law terminate or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstandingextend, or policies existingmaterially amend, waive, modify, or violate the terms of, any Contract disclosed on the Disclosure Schedule (or agree to do so), or enter into any Contract which would constitute a Material Contract had such Contract been entered into prior to the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstanceshereof;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) engage in or enter into grants to future patent rightsany material transaction or commitment, other than on standard forms of the Company or relinquish any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in material right, outside the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.the Company’s business consistent with past practice;
(e) Commence enter into or materially amend, waive or modify the terms of any material litigation Contract pursuant to which any other than (i) for the routine collection party is granted marketing, distribution, development or similar rights of bills, (ii) for software piracy, any type or (iii) in such cases where the Company in good faith determines that failure scope with respect to commence suit would result in the material impairment of a valuable aspect any products or technology of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto)Company;
(f) Declare initiate or settle any litigation, other than to enforce its rights under this Agreement;
(g) 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 stockCompany Capital Stock, or 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 capital stock of the Company;
(g) Repurchase Company Capital Stock, or repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock Company Capital Stock (or options, warrants or other rights exercisable therefor) except as required by, and in accordance with, any with the agreements existing as of evidencing Company Options that are outstanding on the date hereof and as set forth on SECTION 6.1(G) of disclosed in the Company Disclosure SchedulesSchedule;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, delivergrant, deliver or sell or authorize or propose the issuance, deliverygrant, grant delivery or sale of, or purchase or propose the purchase of, any shares of its capital stock of Company Capital Stock or any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue or purchase any such shares or other convertible securities, other than the issuance of shares issuances of Company Capital Stock (with Company Rights attached thereto) pursuant to the exercise exercises of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this AgreementOptions in accordance with their terms;
(i) Cause, cause or permit or propose any amendments to the Company's certificate Charter Documents or other organizational documents of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on (whether by merger or prior to the date of this Agreementotherwise);
(j) Sellacquire or agree to acquire by merging or consolidating with, leaseor by purchasing any assets or equity securities of, licenseor by any other manner, encumber any business or any corporation, partnership, association or other business organization or division thereof, or otherwise dispose of acquire or agree to acquire any of the properties assets which are material, individually or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between aggregate, to the Company and Silicon Valley BankCompany’s business;
(k) Incur purchase or sell (or enter into any agreement to purchase or sell) any interest in real property, grant any security interest in real property, enter into any lease, sublease, license or occupancy agreement, or grant any right to occupy or use, or enter into any lease, sublease, license, or other use or occupancy agreement with respect to any real property, or alter, amend, modify or terminate any of the terms of any Lease Agreements or other Contract with respect to real property, or sell or grant any security interest in, or lease, sublease, license or grant any right to use any of the Company’s tangible assets material indebtedness for borrowed money to the conduct of the Company’s business;
(other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of businessl) incur or guarantee any such prohibited indebtedness Indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities or other obligations of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law others or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of create a Lien over any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employeeassets;
(m) Revalue grant any loans to others or purchase debt securities of others or amend the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release terms of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.outstanding loan agreement;
Appears in 1 contract
Conduct of Business of the Company. During the period The Company hereby covenants and agrees that, from the date of this Merger Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company (which for the purposes of Company, unless otherwise expressly contemplated by this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except Merger Agreement or consented to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)by Acquiror, to will, and will cause the Subsidiaries to, carry on its business and to cause each of its Subsidiaries to carry on its business their respective businesses only in the usualOrdinary Course of Business or as contemplated by the Company's 1999 capital budget, regular and ordinary coursea copy of which was previously furnished to Acquiror or in the Confidential Offering Memorandum (relating to certain senior credit facilities) dated December 1998, and to use and cause each of its Subsidiaries to use all commercially their respective reasonable best efforts consistent with past practices and policies to preserve intact its present their business organizationsorganizations and Assets, keep available maintain their rights and franchises, retain the services of its present their officers and employees and preserve its maintain their relationships with customers, suppliers, distributors, licensors, licensees, licensees and others having business dealings with them, and use their respective reasonable best efforts to keep in full force and effect liability insurance and bonds comparable in amount and scope of coverage to that currently maintained. Without limiting the Company generality of the foregoing, except as otherwise consented to in writing by Acquiror or any such Subsidiariesorally by Xxxxxxx X. Grey, J. Xxxx Xxxxxxx or Xxxx Xxxx or as otherwise expressly contemplated by this Merger Agreement or as contemplated by the Company's 1999 capital budget, a copy of which was previously furnished to Acquiror or in the end that Confidential Offering Memorandum (relating to certain senior credit facilities) dated December 1998, from the goodwill and ongoing businesses date of Company and each of its Subsidiaries be unimpaired at this Merger Agreement until the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, Time the Company shall not, and shall not permit any of its the Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed)::
(a) Except as provided (i) increase in this Agreement any manner the compensation or as described fringe benefits of, or pay any bonus to, any director, officer or employee, except for increases or bonuses in the Company Disclosure Schedules, accelerate, amend Ordinary Course of Business to employees who are not directors or change the period of exercisability of options officers and except pursuant to existing arrangements previously disclosed to or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments approved in exchange for any options granted under any of such plans;
writing by Acquiror; (bii) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) other than pursuant to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past normal severance practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements existing Agreements of the Company or any Subsidiary in effect on the date of its Subsidiaries this Merger Agreement as described in Section 5.01(a)(ii) of the Company Disclosure Schedule) to, or enter into any severance Agreement with, any director, officer or employee, or enter into any employment Agreement with any director, officer or employee; (iii) establish, adopt, enter into or amend any Plan or Other Arrangement, except as may be required to comply with applicable Law; (iv) pay any benefit not provided for under similar circumstancesany Plan or Other Arrangement; (v) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Plan or Other Arrangement (including the grant of stock options, stock appreciation rights, stock-based or stock-related awards, performance units or restricted stock, or the removal of existing restrictions in any Plan or Other Arrangement or Agreement or awards made thereunder), except for grants in the Ordinary Course of Business or as required under the Agreements set forth in Section 5.01(a)(ii) of the Company Disclosure Schedule, or (vi) take any action to fund or in any other way secure the payment of compensation or benefits under any Agreement, except as required under the Agreements set forth in Section 5.01(a)(ii) of the Company Disclosure Schedule;
(db) Transferdeclare, license set aside or sell to pay any person dividend on, or entity make any other distribution in respect of, outstanding shares of capital stock other than capital stock repurchased from departing employees in the Ordinary Course of Business;
(i) redeem, purchase or otherwise extend, amend or modify acquire any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms shares of capital stock of the Company or any Subsidiary or any securities or obligations convertible into or exchangeable for any shares of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business capital stock of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of ParentSubsidiary, or any options, warrants or conversion or other rights to acquire any shares of their affiliates, nor shall capital stock of the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on Subsidiary or make any such securities or obligations, or any other distributions securities thereof, other than redemption and purchases from departing employees in the Ordinary Course of Business; (whether in cash, stock ii) effect any reorganization or propertyrecapitalization; or (iii) in respect of any of its capital stock, or 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 capital stock of the Company;
(g) Repurchase or otherwise acquirefor, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedulesstock;
(hd) Except as required by except upon the terms of any agreement between the Company and any holder exercise of Company Series E Preferred Stock entered into on or prior to the date of this AgreementOptions in accordance with their terms, issue, deliver, sell award, grant or sell, or authorize or propose the issuance, delivery, award, grant or sale (including the grant of any limitations in voting rights or other Encumbrances) of, any shares of any class of its capital stock of (including shares held in treasury), any class or securities convertible intointo or exercisable or exchangeable for any such shares, or any subscriptions, rights, warrants or options to acquire, any such shares, or enter into other agreements amend or commitments otherwise modify the terms of any character obligating it such rights, warrants or options the effect of which shall be to issue make such terms more favorable to the holders thereof;
(e) except as contemplated by Agreements which have been identified in Section 3.14(a) of the Company Disclosure Schedule, acquire or agree to acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the Assets of, or by any such shares other manner, any business or any corporation, partnership, association or other convertible securitiesbusiness organization or division thereof, or otherwise acquire or agree to acquire any Assets of any other Person (other than the issuance purchase of shares assets from suppliers or vendors in the Ordinary Course of Company Stock Business);
(with Company Rights attached theretof) pursuant sell, lease, exchange, mortgage, pledge, transfer or otherwise subject to any Encumbrance or dispose of, or agree to sell, lease, exchange, mortgage, pledge, transfer or otherwise subject to any Encumbrance or dispose of, any of its Assets, except for sales, dispositions or transfers in the exercise Ordinary Course of Company Rights Business;
(g) adopt any amendments to its articles or Company Series E Preferred Stockcertificate of incorporation, stock options bylaws or warrants outstanding as other comparable charter or organizational documents;
(h) make or rescind any express or deemed election relating to Taxes, settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, or change any of its methods of reporting income or deductions for federal income tax purposes from those employed in the preparation of the date of this Agreementfederal income tax returns for the taxable year ended December 31, 1997, except in either case as may be required by Law, the IRS or GAAP;
(i) Cause, permit make or propose agree to make any amendments to new capital expenditures which are not included in the Company's certificate 1999 capital budget, a copy of incorporation or by-lawswhich was furnished to Acquiror, except as required by it being understood that the terms Company shall provide prior notice to Acquiror of any agreement between the Company and any holder expenditures which are individually in excess of Company Series E Preferred Stock entered into on or prior to the date of this Agreement$1,000,000;
(ji) Sell, lease, license, encumber or otherwise dispose of incur any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or of another Person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries or Subsidiary, guarantee any debt securities of othersanother Person, enter into any "keep well" or other Agreement to maintain any financial statement condition of another Person or enter into any Agreement having the economic effect of any of the foregoing, except for borrowings incurred in each case pursuant to existing agreements entered into the Ordinary Course of Business, or (ii) make any loans, advances or capital contributions to, or investments in, any other Person other than intra- group loans, advances, capital contributions or investments between or among the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, wholly owned Subsidiaries other than in the ordinary course Ordinary Course of business consistent with past practice or as required by GAAP or applicable lawBusiness;
(nk) Except as set forth in except for costs incurred by the Company Disclosure Schedule or as otherwise permitted in connection with the transactions contemplated by this SECTION 6.1Merger Agreement but only to the extent such costs are deducted pursuant to the calculation of Merger Consideration in Article II hereof, pay, discharge discharge, settle or satisfy in an amount in excess of $100,000 any claims, liabilities or obligations (in any one case) whether absolute or $500,000 (in the aggregate prior to October 1contingent, 2001) matured or $200,000 (in the aggregate in any given calendar month beginning October 1unmatured, 2001known or unknown), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction satisfaction, in the ordinary course Ordinary Course of business Business or in accordance with their terms, of liabilities of the type reflected or reserved against in, or contemplated by, the most recent Financial Statement or incurred in the Company Financial Statements (Ordinary Course of Business, or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change waive any material election in respect of Taxesbenefits of, adopt or change agree to modify in any material respect respect, any accounting method in respect of Taxesconfidentiality, file any material Return standstill or similar Agreements to which the Company or any amendment to Subsidiary is a material Returnparty;
(l) except in the Ordinary Course of Business, enter into waive, release or assign any closing agreement, settle any claim rights or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money)claims, or consent modify, amend or terminate any Agreement to which the Company or any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; orSubsidiary is a party;
(pm) Except for make any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used or policy other than those required by itGAAP or a Governmental Entity;
(qn) Except as otherwise permitted pursuant to SECTION 6.3, take any action or fail to exempt take any action that would have a Company Material Adverse Effect prior to or make any person, entity after the Effective Time or action (other than Parent) not subject to an Acquiror Material Adverse Effect after the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person fromEffective Time, or waive or permit that would adversely affect the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any ability of the Company or any of its Subsidiaries is a party Subsidiary prior to the Effective Time, or under which the Company Acquiror or any of its Subsidiaries has any rightssubsidiaries after the Effective Time, and will use its best efforts to enforce obtain consents of third parties or cause approvals of Governmental Entities required to be enforced each such agreement at consummate the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of transactions contemplated in this Merger Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.; or
(so) Takeauthorize, or commit or agree in writing or otherwise to take, do any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedforegoing.
Appears in 1 contract
Samples: Merger Agreement (McLeodusa Inc)
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective TimeClosing, the Company (which for agrees to conduct the purposes business of this SECTION 6.1 shall include the Company and each to cause its Subsidiaries to conduct the business of its Subsidiaries) agreesthe other Acquired Companies, except to the extent that Parent Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)in accordance with Section 5.3 hereof, to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary coursecourse in substantially the same manner as heretofore conducted, to pay the debts and Taxes of the Acquired Companies when due (subject to use Purchaser’s review and cause each consent to the filing of its Subsidiaries any Tax Return, as set forth in Section 5.1(e) below), to use all commercially reasonable efforts pay or perform other obligations when due, and, to the extent consistent with past practices and policies such business, to preserve intact its the present business organizationsorganizations of the Acquired Companies, keep available to use reasonable efforts within the context of applicable Employment Law to maintain the services of its present officers Service Providers employed by the Acquired Companies as of the date hereof and employees at Closing and preserve its the relationships of the Acquired Companies with customers, suppliers, distributors, licensors, licensees, and others having business dealings with them, all with the Company or any such Subsidiaries, to the end that goal of preserving unimpaired the goodwill and ongoing businesses business of Company and each of its Subsidiaries be unimpaired the Acquired Companies at the Effective TimeClosing. The Company shall promptly notify Purchaser of any event or occurrence or emergency not in the ordinary course of business of the Acquired Companies and any material event involving the Acquired Companies that arises during the period from the date of this Agreement and continuing until the earlier of the termination date of this Agreement or the Closing. Except as expressly provided for contemplated by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, not and shall not permit any of its Subsidiaries to, prior cause the other Acquired Companies to the Effective Time or earlier termination of this Agreement pursuant to its termsnot, without the prior written consent of Parent (Purchaser which consent shall not be unreasonably withheld or delayed):in accordance with Section 5.3 hereof:
(a) Except as provided in this Agreement cause or as described in permit any modifications, amendments or changes to the Company Disclosure Schedules, accelerate, amend Charter Documents or change the period organizational documents of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansAcquired Company;
(b) Enter into undertake any material partnership arrangementsexpenditure, joint development agreements transaction or strategic alliancescommitment exceeding €50,000 individually or €150,000 in the aggregate or any commitment or transaction of the type described in Section 2.13 hereof;
(c) pay, except discharge, waive or satisfy any Liability other than the payment, discharge or satisfaction in the ordinary course of business consistent with past practice;
(c) Except as required by law of Liabilities reflected or any existing benefit plans and agreements of reserved against in the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstancesCurrent Balance Sheet;
(d) Transfer, license adopt or sell to any person change accounting methods or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights practices (including rights to resell any change in depreciation or relicense the Company Proprietary Rightsamortization policies or rates) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.as required by Relevant Accounting Standards;
(e) Commence make or change any material litigation other than (i) for the routine collection of billsTax election, (ii) for software piracyadopt or change any Tax accounting method, enter into any Tax Contract, settle any Tax claim or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiariesassessment, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit extension or proceeding against Parent, Merger Sub, waiver of the limitation period applicable to any other Subsidiary Tax claim or assessment or file any material Tax Return unless a copy of Parent, or any of their affiliates, nor shall the Company be required such Tax Return has been made available to consult with Parent with respect thereto)Purchaser for review a reasonable time prior to filing and Purchaser has approved such Tax Return;
(f) Declare revalue any of its assets (whether tangible or intangible), including writing down the value of inventory or writing off notes or accounts receivable;
(g) declare, set aside, or pay any dividends on or make any other distributions (whether in cash, stock or other property) in respect of any of its capital stockCompany Capital Shares, or split, combine or reclassify any of its capital stock Company Capital Shares or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase Company Capital Shares, or directly or indirectly repurchase, redeem or otherwise acquire, directly or indirectly, acquire any shares of its capital stock except as required byCompany Capital Shares (or options, and in accordance withwarrants or other rights convertible into, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedulesexercisable or exchangeable for Ordinary Shares);
(h) Except except as required by Law, increase or otherwise change the salary or other compensation payable or to become payable to any Service Provider, 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 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 agreement between outstanding loan Contract, 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 Contract, 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 Acquired Companies, including any write-off or other compromise of any account receivable of the Acquired Companies;
(m) commence or settle any lawsuit, threat of any lawsuit or Proceeding or other investigation by or against the Company and or relating to any holder of Company Series E Preferred Stock entered into on its businesses, properties or prior to the date of this Agreement, assets;
(n) issue, delivergrant, deliver or sell or authorize or propose or contract for the issuance, deliverygrant, grant delivery or sale of, or purchase or propose or contract for the purchase of, any shares of its capital stock of Company Capital Shares or any class or securities convertible into, exercisable or any exchangeable for, or subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments Contracts of any character obligating it any of them to issue or purchase any such shares or other convertible securities, other than except for the issuance of shares of Company Stock (with Company Rights attached thereto) Capital Shares pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this AgreementOptions;
(o) (i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sellsell, lease, license, encumber license or otherwise dispose transfer to any Person any rights to any Company Intellectual Property or enter into any Contract or modify or amend any existing Contract with respect to any Company Intellectual Property with any Person or with respect to any Intellectual Property of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, Person except in the ordinary course of business consistent with past practice practice, (ii) purchase or in connection license any Intellectual Property or enter into any Contract or modify or amend any existing Contract with respect to the Intellectual Property of any Person, or (iii) enter into any Contract or modify or amend any existing agreements entered into between Contract with respect to the Company and Silicon Valley Bankdevelopment of any Intellectual Property with any Person;
(kp) Incur enter into or amend any material indebtedness for borrowed money (other than ordinary course trade payables or Contract pursuant to existing credit facilities in which any other party is granted marketing, distribution, development, manufacturing or similar rights of any type or scope with respect to any products or technology of the ordinary course of businessAcquired Companies;
(q) or guarantee enter into any such prohibited indebtedness or issue Contract to purchase or sell any debt securities interest in real property, grant any security interest in any real property, enter into any lease, sublease, license or warrants other occupancy Contract with respect to any real property or rights alter, amend, modify or terminate any of the terms of any Lease Agreements, or waive any term or condition thereof or grant any consents thereunder;
(r) 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;
(s) unless required by Law or by the terms of the applicable Contract, terminate, amend or otherwise modify (or agree to do so), or violate the terms of, any of the Contracts set forth or described in the Disclosure Schedule;
(t) acquire or agree to acquire debt by merging or consolidating with, or by purchasing any assets or equity securities of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material or any equity securities, individually or in the aggregate, to the business of the Company Company;
(u) unless required by Law or an Applicable CBA, grant any severance, change of its Subsidiaries control or guarantee termination pay (whether payable in cash, equity or otherwise) to any debt securities of othersService Provider, except in each case pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously made available to Purchaser, or adopt any new severance plan, or amend or modify or alter in any respect any severance plan or Contract existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of on the date hereof;
(lv) Except as unless required by law Law or permitted by SECTION 6.1(C)an Applicable CBA, adopt adopt, amend or amend terminate any Company Scheduled Plan Plan, employee benefit plan, policy or Contract, or employee stock purchase or stock option plan, or enter into any employment Contract, collective bargaining agreement, severance or any similar Contract with any Representative Body, pay any special bonus or special remuneration (whether payable in cash, equity or otherwise) to any Service Provider, or increase the salaries or wage rates of any or fringe benefits (whether payable in cash, equity or otherwise) (including rights to severance or indemnification) of its employees (Service Providers, except for wage increases in pursuant to written agreements outstanding on the ordinary course of business and consistent with past practices), including but not limited date hereof that have been made available to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employeePurchaser;
(mw) Revalue send any of written communications (including electronic communications) to its Service Providers regarding this Agreement or the assets of transactions contemplated hereby unless such communication is required by Law or Applicable CBA, in which case the Company and Purchaser shall reasonably cooperate with respect to the wording and nature of such communication in accordance with Law;
(x) make any representations or issue any communications to Service Providers that are inconsistent with this Agreement or the transactions contemplated hereby, including any representations regarding offers of employment from Purchaser unless such communication is required by Law or Applicable CBA, in which case the Company and Purchaser shall reasonably cooperate with respect to the wording and nature of such communication in accordance with Law;
(y) enter into any strategic alliance, affiliate agreement or joint marketing Contract;
(z) enter into or amend any Contract that contains the provisions set forth in Section 2.16(a)(xv)-(xviii);
(aa) waive any stock repurchase rights, accelerate, amend or change the period of exercisability of Options or restricted stock or any of its Subsidiaries, other equity or similar incentive awards (including without limitation writing down the value of inventoryany long term incentive awards), writing off notes or accounts receivablereprice Options (through amendment, exchange or otherwise) or authorize cash payments or new equity awards in exchange for any Options, other than in the ordinary course of business consistent with past practice or as required provided by GAAP or applicable lawthis Agreement;
(nbb) Except as set forth in hire, offer to hire or terminate any Service Providers without just cause or encourage or otherwise cause any employee to resign from the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41Acquired Companies;
(occ) Except as unless required by applicable Tax lawLaw or an Applicable CBA, make promote, demote or otherwise change the employment status or titles of any material election in respect of TaxesService Provider;
(dd) alter, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreementcommitment to alter, settle its interest in any claim corporation, association, joint venture, partnership or assessment business entity in respect of Taxes which the Company directly or indirectly holds any interest;
(except settlements effected solely through payment of immaterial sums of money)ee) cancel, amend or consent to renew any extension or waiver of the limitation period applicable to insurance policy;
(ff) execute any claim or assessment in respect of TaxesContract with a data center service provider; or
(pgg) Except for any change which is required by reason of a concurrent change in GAAPtake, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Takecommit, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(ASections 5.1(a) THROUGH (R) abovethrough 5.1(ff), or any other action which that would (i) prevent any Acquired Company from performing, or cause any Acquired Company not to perform, its covenants or agreements hereunder or (ii) cause or would be reasonably likely to cause result in any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedits respective representations and warranties contained herein being untrue or incorrect.
Appears in 1 contract
Conduct of Business of the Company. During Except (a) as described in Section 6.1 of the Company Disclosure Letter, (b) as required by applicable Law, (c) as consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed) or (d) as required or expressly provided for by this Agreement, during the period from and after the date execution and delivery of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to in accordance with its terms and or the Effective Time, (x) the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agreesuse commercially reasonable efforts to, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to, conduct its and its Subsidiaries’ business in all material respects according to its ordinary and usual course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, use all commercially reasonable efforts consistent with past practices and policies to (1) preserve intact its present and its Subsidiaries’ business organizations, (2) maintain in effect all of its and its Subsidiaries’ material Permits, (3) keep available the services of its present officers and employees and current “executive officers” (as defined under Rule 3b-7 of the Exchange Act), (4) preserve its and its Subsidiaries’ present relationships and goodwill with material customers, members, suppliers, distributors, sales brokers, licensors, licensees, licensees and others all other Persons having significant business dealings relationships with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at and (5) preserve its and its Subsidiaries’ present relationships and goodwill with Governmental Authorities with jurisdiction over its and its Subsidiaries’ operations; and (y) without limiting the Effective Time. Except as expressly provided for by this Agreement, generality of the Credit Agreement, the Security Agreement, or the Software Distribution Agreementforegoing, the Company shall not, and shall cause its Subsidiaries not permit to:
(i) adopt any amendments to the Organizational Documents of the Company or any of its Subsidiaries;
(ii) issue, sell, grant options or rights to purchase, pledge, or authorize or propose the issuance, sale, grant of options or rights to purchase or pledge, any Company Securities or Subsidiary Securities, other than Company Shares issuable upon exercise or settlement of Company Equity Awards outstanding on the date hereof and in accordance with their respective terms as in effect on the date hereof;
(iii) acquire or redeem, directly or indirectly, or amend any Company Securities, other than (A) the acquisition by the Company of Company Shares in connection with the surrender of Company Shares by holders of Company Options outstanding on the date hereof in order to pay the exercise price of such Company Options, (B) the withholding of Company Shares to satisfy Tax obligations with respect to the exercise or settlement of Company Equity Awards or (C) the acquisition by the Company of Company Equity Awards outstanding on the date hereof in connection with the forfeiture of such awards;
(iv) split, combine or reclassify its capital stock or other equity interests or declare, set aside, make or pay any dividend or distribution (whether in cash, stock or property) on any shares of its capital stock or other equity interests (other than (A) quarterly cash dividends by the Company as set forth in Section 6.1(iv) of the Company Disclosure Letter, or (B) dividends paid to the Company or one of its Wholly Owned Subsidiaries by a Wholly Owned Subsidiary of the Company with regard to its capital stock or other equity interests);
(v) acquire, directly or indirectly by merger, consolidation, acquisition of stock or assets or otherwise, any business, Person, properties (including Real Property, other than by or through a NV JV Entity) or assets from any other Person with a fair market value or purchase price in excess of $1,000,000 in any individual transaction or $2,000,000 in the aggregate, in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or that would reasonably be expected to have a Company Impairment Effect, other than acquisitions of inventory or other goods in the ordinary course of business or pursuant to the terms of any Material Contract existing as of the date hereof and listed on Section 6.1(v) of the Company Disclosure Letter;
(vi) transfer, sell, convey, lease, sublease, license, pledge, mortgage, assign, divest, grant any option in, cancel or otherwise abandon or dispose of, or incur, permit or suffer to exist the creation of any Liens (other than Permitted Liens) upon, any properties (including any Real Property, other than by or through a NV JV Entity) or assets (tangible or intangible, but other than Intellectual Property Rights which are addressed in Section 6.1(xiii)), product lines or businesses of the Company or any of its Subsidiaries), or capital stock or other equity interests of any of its Subsidiaries, except in connection with (A) sales of Company inventory in the ordinary course of business, (B) sales of obsolete assets in the ordinary course of business, (C) sales, leases, or other dispositions of assets with a fair market value not in excess of $1,000,000 in any individual transaction or $2,000,000 in the aggregate in the ordinary course of business and (D) transactions pursuant to Material Contracts existing as of the date hereof and listed on Section 6.1(vi) of the Company Disclosure Letter;
(vii) create, incur, assume guarantee or otherwise become liable or responsible for (or agree or consent to create, incur, assume, guarantee or otherwise become liable or responsible for) any indebtedness for borrowed money (A) outside the ordinary course of business or (B) in excess of $2,000,000 in the aggregate;
(viii) make any loans, advances (other than for ordinary course business expenses or pursuant to the Company’s certificate of incorporation) or capital contributions to, prior or investments in, any other Person (other than (A) to or among Wholly Owned Subsidiaries of the Company or (B) the NV JV Entities) in excess of $2,000,000 in the aggregate;
(ix) change any financial accounting methods, principles or practices used by it, except as required by GAAP or applicable Law;
(x) except as required by applicable Law, (A) change any annual Tax accounting period or method, (B) make, change or revoke any Tax election, (C) settle or compromise any claim, assessment, audit or proceeding in respect of any Tax Liabilities, except any ordinary-course extension or waiver of an applicable statute of limitations, (D) file any amended Tax Return, (E) enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local, or non -U.S. Law) with respect to any Tax, (F) surrender any right to claim a Tax refund or (G) enter into any Tax indemnification, sharing, allocation, reimbursement or similar agreement, arrangement or understanding (other than any provisions of ordinary course commercial, employment, leasing or finance agreements or arrangements which agreements or arrangements are not primarily related to Taxes), or (H) withdraw any material Tax refund claim;
(xi) except as required pursuant to any Plan as in effect on the date hereof, (A) pay or make any new commitment to pay any bonus, cash incentive, profit-sharing or similar payment (including any benefit or amount not required under any Plan as in effect on the date hereof) to, or provide for an increase in the compensation or benefits provided to, any Company Service Provider except, in the event the Effective Time occurs on or earlier termination of this Agreement pursuant to its terms, without following the prior written consent of Parent (date in 2025 on which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend would otherwise implement increases in annual salary or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except wage rate in the ordinary course of business consistent with past practice;
, any such increases that do not exceed either 3% individually or 3% in the aggregate; (cB) Except as required by law grant or pay (or otherwise increase) any existing benefit plans and agreements change in control, retention, severance, termination, or similar pay to any Company Service Provider; (C) establish, adopt, enter into, amend or terminate any Plan; (D) take any action to accelerate the vesting, lapsing of restrictions, payment, or funding of, or in any other way secure the payment of, compensation or benefits under any Plan, including any Company Equity Award; (E) hire, promote or terminate the employment of any employee at (or who would be at) the level of its SubsidiariesVice President or above, grant other than for cause; (F) engage or terminate the services of any severance consultant who is a natural person who receives or termination pay who would receive (i) an hourly fee equal to any executive officer or greater than $250 and (ii) to any other employee except payments made greater than $100,000 in the aggregate; (AG) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extendenter into, amend or modify terminate any rights to Collective Bargaining Agreement or otherwise recognize or certify a Union as the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or bargaining representative for any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business employees of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to or its Subsidiaries may renegotiate any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends Collective Bargaining Agreement in effect on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of that is scheduled to expire in accordance with its terms within the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to six-month period following the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except Agreement in the ordinary course of business consistent with past practice on terms substantially comparable to such Collective Bargaining Agreement (provided that any increases in compensation and benefits for employees subject to such Collective Bargaining Agreement do not exceed 3% per annum); or in connection with existing agreements entered into between (H) implement any “plant closing,” “mass layoff,” or similar action under the Company and Silicon Valley BankWARN Act;
(kxii) Incur make or authorize any material indebtedness capital expenditures, or incur any obligations, Liabilities in respect thereof, except for borrowed money (other than ordinary course trade payables A) those contemplated by the capital expenditure budget for the relevant fiscal year, which capital expenditure budget has been made available to Parent and (B) any unbudgeted capital expenditures, in an amount not to exceed $1,000,000 for any individual capital project or pursuant to existing credit facilities $2,000,000 in the aggregate;
(xiii) except in the ordinary course of business, sell, license (including the making available of any materials under an open source or similar license) or guarantee otherwise dispose of or allow to lapse or fail to prosecute any such prohibited indebtedness material Company Intellectual Property Rights, except for the expiration of any non-renewable statutory term of any Company Registered Intellectual Property;
(xiv) except as set forth in Section 6.1(xiv) of the Company Disclosure Letter (A) commence any material Legal Proceeding or issue (B) settle any Legal Proceeding other than a settlement solely for monetary damages (net of insurance proceeds received) not in excess of $1,000,000 in any individual Legal Proceeding or $2,000,000 in the aggregate;
(xv) except in connection with any transaction to the extent specifically permitted by any other subclause of this Section 6.1(y), (A) enter into any Contract that would, if entered into prior to the date hereof, be a Material Contract or a Real Property Lease, (B) materially modify, materially amend or terminate (other than expirations in accordance with its terms) any Material Contract or Real Property Lease or waive, release or assign any material rights or claims thereunder or (C) lease, sublease or license any portion of Real Property;
(xvi) acquire any ownership interest in any real property or enter into any agreement to sell or dispose of any debt securities Owned Real Property (including any option);
(xvii) adopt or warrants implement any stockholder rights plan or rights similar arrangement;
(xviii) enter into any Contract that by its terms would purport to acquire debt securities bind Parent or its Affiliates (other than, following the Effective Time, the Company); or
(xix) authorize, agree or commit, in writing or otherwise, to take any of the foregoing actions. Notwithstanding the foregoing, nothing in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the business or operations of the Company or any of its Subsidiaries or guarantee at any debt securities of otherstime prior to the Effective Time. Prior to the Effective Time, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C)its Subsidiaries shall exercise, adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, terms and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date conditions of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiariescomplete control and supervision over their own business and operations.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Samples: Merger Agreement (Vector Group LTD)
Conduct of Business of the Company. During Except as set forth in Section 4.01 of the Company Disclosure Letter, or as expressly required or permitted by this Agreement, or required by a Governmental Entity of competent jurisdiction, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company (which for will, and will cause its Subsidiaries to, conduct its operations in all material respects according to its ordinary and usual course of business and consistent with past practice and use its commercially reasonable efforts to preserve intact its current business organization, to keep available the purposes services of its current officers and employees and to preserve its relationships with customers, suppliers, manufacturers, licensors, licensees, advertisers, distributors and others having business dealings with it; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this SECTION 6.1 Section 4.01 shall include be deemed a breach of this Section 4.01 unless such action would constitute a breach of one or more of such other provisions. Without limiting the generality of the foregoing, except as set forth in _____ Section 4.01 of the Company and each of its Subsidiaries) agreesDisclosure Letter and, except to as (x) contemplated or permitted by this Agreement or (y) required by Law, during the extent that Parent shall otherwise period from the date of this Agreement until the Effective Time, the Company will not and will not cause its Subsidiaries to, without the prior written consent in writing (of Parent, which consent shall not be unreasonably withheld or delayed):
(i) adopt or amend in any material respect any bonus, to carry on its business and to cause each profit sharing, compensation, severance, change-in-control, termination, stock option, restricted stock, stock purchase, stock appreciation right, pension, retirement, employment or other employee benefit agreement, trust, plan or other arrangement for the benefit or welfare of any director, officer or employee of the Company or its Subsidiaries to carry on its business or increase in any manner the usualcompensation or fringe benefits of any director, regular and ordinary course, and to use and cause each officer or employee of the Company or its Subsidiaries to use all commercially reasonable efforts (except, in each case, for annual increases and cost of living increases for the benefit of officers (including as set forth in any employment agreements) and employees of the Company or its Subsidiaries which are (A) consistent with past practices practice and policies (B) in the case of any individual officer or employee, are not greater than fifteen percent of the salary paid to preserve intact its present business organizationssuch individual in the previous year and, keep available in the services of its present aggregate to all officers and employees and preserve its relationships with customersemployees, suppliersnot greater than five percent of the Company’s total salaries paid in the previous year);
(ii) sell, distributorslease, licensorslicense, licensees, and others having business dealings with the Company mortgage or otherwise encumber or subject to any such Subsidiaries, to the end that the goodwill and ongoing businesses Lien or otherwise dispose of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries toproperties or assets other than immaterial properties or assets (or immaterial portions of properties or assets), prior to except in the Effective Time ordinary course of business consistent with past practice (and provided that any such transaction that requires the consent of the Company Board or earlier termination any committee thereof, and any sale of this Agreement pursuant to its termsany library of Films with more than five titles, without shall require the prior written consent of Parent Parent), and other than Liens (which consent shall not be unreasonably withheld A) arising as a matter of Law, (B) granted in connection with the incurrence, assumption or delayed):
guaranteed of any indebtedness permitted under clause (ax) Except as provided below, (C) arising in this Agreement or as described connection with the refinancing of the Company Credit Facility on terms substantially similar to those set forth in Section 4.01(ii) of the Company Disclosure Schedules, accelerate, amend or change the period letter and (D) as required by after acquired property covenants in contracts evidencing indebtedness of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments its Subsidiaries and Liens created in exchange connection with the refinancing of indebtedness of the Company or its Subsidiaries that are no less favorable to the Company and its Subsidiaries than those Liens that were created in connection with the indebtedness that is being refinanced and except for any options granted under any sales of such plans;
(b) Enter into any material partnership arrangements, joint development agreements excess or strategic alliances, except obsolete assets in the ordinary course of business consistent with past practice;
(ciii) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstandingdeclare, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare set aside or pay any dividends on on, or make any other distributions (whether in cash, stock or property) in respect of of, any of its capital stock, or (B) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (C) purchase, redeem or otherwise acquire any shares of capital stock of the CompanyCompany or its Subsidiaries or any other securities thereof or any rights or options or warrants to acquire any such shares or other securities, except that any Subsidiary of the Company may pay dividends to the Company (and any intermediate wholly owned holding company);
(giv) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreementauthorize for issuance, issue, deliver, sell or authorize agree or propose commit to issue, sell or deliver (whether through the issuanceissuance or granting of options, deliverywarrants, grant commitments, subscriptions, rights to purchase or sale ofotherwise), pledge or otherwise encumber any shares of its capital stock of stock, any class other voting securities or any securities exercisable or exchangeable for or convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares shares, voting securities or convertible securities or any other convertible securitiessecurities or equity equivalents (including, without limitation, stock appreciation rights) other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the issuances upon exercise of Options, Warrants, the Portside Warrant, the Company Convertible Note or Company Rights or Company Series E Preferred Stock, stock options or warrants in connection with stock-based awards and in each case outstanding as of the date of this the Original Agreement;
(iv) Causeamend its Charter Documents or, permit or propose any amendments to in the case of Subsidiaries of the Company's , the certificate of incorporation incorporation, bylaws or by-laws, except as required by the terms other applicable constituent documents of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreementsuch Subsidiary;
(jvi) Sellacquire (A) by merging or consolidating with, lease, license, encumber or otherwise dispose of any by purchasing a substantial portion of the properties assets of, or assets of the Company by any other manner, any business or any of its Subsidiaries corporation, partnership, joint venture, association or terminate other business organization or waive division thereof or (B) any contractsassets, claims, or rights, in each caseincluding real estate, except (x) acquisitions of assets (other than capital expenditures) in the ordinary course of business consistent with past practice practice; and (y) the making of capital expenditures (I) in accordance with the Company’s capital expenditures plan set forth in Section 4.01(vi) of the Company Disclosure Letter, (II) to repair or replace critical facilities destroyed or damaged due to casualty or accident (whether or not covered by insurance) or (III) otherwise, in an aggregate amount for all such capital expenditures made pursuant to this clause (III) not to exceed $200,000;
(vii) other than claims, liabilities or obligations in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract litigation or the payment of any special bonus or special remuneration settlement thereof (which shall be subject to any director or employee;
subparagraph (mviii) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1below), pay, discharge discharge, settle or satisfy in an amount in excess of $100,000 (in any one case) claims, liabilities or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge discharge, settlement or satisfaction in the ordinary course of business of and in amounts consistent with past practice;
(viii) pay, discharge, settle or satisfy any claims, liabilities of or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) in connection with any litigation or settlement thereof where the type reflected amounts paid or reserved against payable by the Company do not exceed $50,000 individually or $250,000 in the Company Financial Statements aggregate;
(ix) make or rescind any Tax elections that, individually or in the notes thereto); 41
(o) Except aggregate, could be reasonably likely to adversely affect in any material respect the Tax liability or Tax attributes of the Company or its Subsidiaries, settle or compromise any material income tax liability or, except as required by applicable Tax lawLaw, make or materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice;
(x) make any material election changes in its accounting method, except (A) as required by changes in GAAP (or any binding interpretation thereof) or Regulation S-X of the SEC, in each case as required by the Company’s independent public accountants, (B) as may be required by a change in applicable Law, (C) as disclosed in the Company SEC Documents filed prior to the date hereof or (D) as lawfully required by a Governmental Entity (including the FASB or other similar organization);
(xi) incur, assume or guarantee any indebtedness for borrowed money or enter into any “keep well” or other agreement to maintain any financial condition of another person or enter into any arrangement having the economic effect of any of the foregoing (including any capital leases, “synthetic” leases or conditional sale or other title retention agreements), other than (A) in the ordinary course of business consistent with past practice (including, without limitation, pursuant to the Company Credit Facility or other similar facility in lieu thereof), (B) borrowings made to finance capital expenditures and other acquisitions permitted pursuant to clause (vi) above, (C) borrowings permitted to be incurred hereunder, (D) borrowings set forth in Section 4.01(xi) of the Company Disclosure Letter and (E) other borrowings in an aggregate amount not to exceed $100,000;
(xii) enter into any new distribution agreement or license agreement involving aggregate payments by the Company in excess of $500,000; provided, however, that if Parent shall not deliver to the Company its objection in writing within 48 hours of Parent’s receipt of notice that the Company intends to take an action that would otherwise be prohibited by this subclause (xii) (including a copy of the proposed agreement or a summary description identifying the counterparty and disclosing the material terms thereof), then Parent shall have been deemed to have granted the Company its written consent with respect of Taxes, adopt to such action;
(xiii) amend or change modify in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver agreement set forth on Section 4.01(xiii) of the limitation period applicable to any claim Company Disclosure Letter;
(xiv) amend or assessment in respect of Taxesmodify the Portside Warrant or the Company Convertible Note; or
(pxv) Except for any change which is required by reason of a concurrent change in GAAPauthorize, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person frompermit, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, commit or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedforegoing actions.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Image Entertainment Inc)
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective Time, the Company (which for agrees to conduct the purposes business of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agreesCompany, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)in accordance with Section 4.3 hereof, in the ordinary course in substantially the same manner as heretofore conducted, to carry on its business pay the debts and Taxes of the Company when due, to cause each of its Subsidiaries pay or perform other obligations when due, and, to carry on its business in the usualextent consistent with such business, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its the present business organizationsorganizations of the Company, keep available the services of its the present officers and employees Employees of the Company and preserve its the relationships of the Company with customers, suppliers, distributors, licensors, licensees, and others having business dealings with them, all with the Company or any such Subsidiaries, to the end that goal of preserving unimpaired the goodwill and ongoing businesses business of the Company at the Effective Time. The Company shall promptly notify Parent of any event or occurrence or emergency not in the ordinary course of business of the Company and each any material event involving the Company that arises during the period from the date of its Subsidiaries be unimpaired at this Agreement and continuing until the earlier of the termination date of this Agreement or the Effective Time. Except as expressly provided for contemplated by this Agreement, Agreement and except as expressly set forth in Section 4.1 of the Credit Agreement, the Security Agreement, or the Software Distribution AgreementDisclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):in accordance with Section 4.3 hereof:
(a) Except as provided in this Agreement cause or as described in permit any modifications, amendments or changes to the Company Disclosure Schedules, accelerate, amend Charter Documents or change the period organizational documents of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansSubsidiary;
(b) Enter into undertake any material partnership arrangementsexpenditure, joint development agreements transaction or strategic alliancescommitment exceeding $100,000 individually or in the aggregate per month to a single vendor or any Contract of the type described in Section 2.13 hereof;
(c) pay, except discharge, waive or satisfy, in an amount in excess of $50,000 in any one case, or $100,000 in the aggregate, any claim, liability, right or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business consistent with past practice;
(c) Except as required by law of liabilities reflected or any existing benefit plans and agreements reserved against in the Current Balance Sheet or the payment of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) Taxes reflected on Returns filed pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or clause (Ce) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstancesbelow;
(d) Transfer, license adopt or sell to any person change accounting methods or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights practices (including rights to resell any change in depreciation or relicense the Company Proprietary Rightsamortization policies or rates) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.as required by GAAP;
(e) Commence make or change any material litigation other than (i) for the routine collection of billsTax election, (ii) for software piracyadopt or change any Tax accounting method, enter into any Tax sharing agreement, settle any Tax claim or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiariesassessment, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit extension or proceeding against Parent, Merger Sub, waiver of the limitation period applicable to any other Subsidiary Tax claim or assessment or file any material Return unless a copy of Parent, or any of their affiliates, nor shall the Company be required such Return has been delivered to consult with Parent with respect thereto)promptly after filing;
(f) Declare revalue any of its assets (whether tangible or intangible), including writing down the value of inventory or writing off notes or accounts receivable, excluding any credits or rebills;
(g) 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 stockCompany Capital Stock, or 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 capital stock Company Capital Stock, or directly or indirectly repurchase, redeem or otherwise acquire any shares of Company Capital Stock (or options, warrants or other rights convertible into, exercisable or exchangeable for Company Common Stock); (h) increase or otherwise change the salary or other compensation payable or to become payable to any officer, director, employee, consultant or 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, other than as required under any employment agreement disclosed in Section 2.23 of the Disclosure Schedule;
(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 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, excluding indebtedness to vendors incurred in the ordinary course of business in amounts that do not exceed $100,000 in the aggregate with respect to each such vendor, 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, except for any amounts borrowed by the Company pursuant to the SVB Loan Agreement; provided that such borrowed amounts shall not cause the aggregate principal balance of outstanding amounts borrowed under such agreement to exceed $9 million provided, however, that the Company may not borrow any amounts pursuant to the SVB Loan Agreement without seven (7) Business Days prior written notice to Parent.
(l) waive or release any right or claim of the Company for an amount in excess of $50,000 individually or $100,000 in the aggregate, including any write-off or other compromise of any account receivable of the Company;
(gm) Repurchase commence or otherwise acquiresettle any lawsuit, directly threat of any lawsuit or indirectly, proceeding or other investigation by or against the Company or relating to any shares of its capital stock except as required bybusinesses, and properties or assets for an amount in accordance with, any agreements existing as excess of $50,000 in the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedulesaggregate;
(hn) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, delivergrant, deliver or sell or authorize or propose or contract for the issuance, deliverygrant, grant delivery or sale of, or purchase or propose or contract for the purchase of, any shares of its capital stock of Company Capital Stock or any class or securities convertible into, exercisable or any exchangeable for, or subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it any of them to issue or purchase any such shares or other convertible securities, other than except for the issuance of shares of Company Capital Stock (with Company Rights attached thereto) pursuant to the exercise of outstanding Company Rights Options or the conversion of Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(o) (i) Causesell, permit lease, license or propose transfer to any amendments Person any rights to any Company Intellectual Property or enter into any agreement or modify or amend any existing agreement with respect to any Company 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, other than non-exclusive, end-user licenses for the Company's certificate ’s products entered into in the ordinary course of incorporation business, or by(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, other than non-lawsexclusive, except as required by end-user licenses for the Company’s products entered into in the ordinary course of business;
(p) enter into or amend any Contract pursuant to which any other party is granted marketing, distribution, development, manufacturing or similar rights of any type or scope with respect to any products or technology of the Company;
(q) 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 agreement between the Company and Lease Agreements, or waive any holder of Company Series E Preferred Stock entered into on term or prior to the date of this Agreementcondition thereof or grant any consents thereunder;
(jr) Sell, lease, license, encumber grant or otherwise dispose 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;
(s) terminate, amend or otherwise modify (or agree to do so), or violate the terms of, any of the properties Contracts set forth or assets of described in the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each caseDisclosure Schedule, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bankpractice;
(kt) Incur acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or equity securities of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material indebtedness for borrowed money or any equity securities, individually or in the aggregate, to the business of the Company;
(other than ordinary course trade payables u) grant any severance, change of control or termination pay (whether payable in cash, equity or otherwise) to any Employee, 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 credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of on the date hereof;
(lv) Except except as required by law otherwise provided in Section 5.19 hereof, adopt, amend or permitted by SECTION 6.1(C)terminate any employee benefit plan, adopt policy or amend arrangement, or employee stock purchase or stock option plan, or enter into any Company Scheduled Plan or increase the salaries or wage rates of any of its employees employment contract (except for wage increases other than offer letters and letter agreements entered into, in the ordinary course of business and consistent with past practices)practice, including but with newly hired employees who are terminable “at will” and who are not limited to (but without limiting the generality officers of the foregoing)Company) or collective bargaining agreement, the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of pay any special bonus or special remuneration (whether payable in cash, equity or otherwise) to any Employee, or increase the salaries or wage rates or fringe benefits (whether payable in cash, equity or otherwise) (including rights to severance or indemnification) of its Employees, except pursuant to agreements or plans outstanding on the date hereof that have been previously been disclosed in writing to Parent or as required by law or court order;
(w) enter into any strategic alliance, affiliate agreement or joint marketing arrangement or agreement;
(x) 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 (including without limitation any long term incentive awards), or reprice stock options (through amendment, exchange or otherwise) or authorize cash payments or new equity awards in exchange for any stock options;
(y) hire, offer to hire or terminate without cause any employee, except for replacements in existing employment positions on the date hereof that are below a director level title, or intentionally encourage any Key Employee to resign from the Company;
(z) promote or demote or otherwise change the employment status or titles of any employee;
(maa) Revalue alter, or enter into any of the assets of commitment to alter, its interest in any corporation, association, joint venture, partnership or business entity in which the Company directly or indirectly holds any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable lawinterest;
(nbb) Except as set forth in the Company Disclosure Schedule cancel, amend or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in renew any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remunerationinsurance policy, other than the payment, discharge or satisfaction in the ordinary course renewal of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxesexisting policies on substantially similar terms and conditions; or
(pcc) Except for any change which is required by reason of a concurrent change in GAAPtake, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Takecommit, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(ASections 4.1(a) THROUGH (Rthrough 4.1(bb) abovehereof, or any other action which that would (i) prevent the Company from performing, or cause the Company not to perform, its covenants or agreements hereunder or (ii) cause or would be reasonably likely to cause result in any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedits respective representations and warranties contained herein being untrue or incorrect.
Appears in 1 contract
Conduct of Business of the Company. During Except (a) as expressly permitted or required by this Agreement, (b) as may be agreed in writing by Parent (which consent shall not be unreasonably withheld), or (c) as set forth in Section 5.01 of the Disclosure Letter, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company (which for the purposes of this SECTION 6.1 shall include the Company will conduct and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to will cause each of its Subsidiaries to carry on conduct its business in and operations according to its ordinary and usual course of business consistent with past practice and the usual, regular and ordinary course, and to Company will use and will cause each of its Subsidiaries to use all commercially its reasonable best efforts consistent with past practices and policies to preserve intact its present business organizationsorganization, to keep available the services of its present current officers or employees who are integral to the operation of their businesses as presently conducted and employees to preserve the goodwill of and preserve its maintain satisfactory relationships with customers, suppliers, distributors, licensors, licensees, and others those Persons having significant business dealings relationships with the Company or any such of its Subsidiaries; provided, to the end however, that the goodwill and ongoing businesses of Company and each is not required to pay additional amounts to keep available the services of its Subsidiaries be unimpaired at the Effective Timeofficers and employees. Except (i) as expressly provided for permitted or required by this Agreement, (ii) as set forth in the Credit Agreement, corresponding Section of the Security AgreementDisclosure Letter, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of (iii) as may be agreed in writing by Parent (which consent shall not be unreasonably withheld or delayed):withheld), during the period specified in the preceding sentence, the Company will not and will not permit any of its Subsidiaries to:
(a) Except as provided issue, deliver, sell, grant options or rights to purchase, pledge, or subject to any Lien (other than Permitted Liens) any Company Securities or Subsidiary Securities, other than (i) Shares issuable upon exercise of the Existing Stock Options, upon the vesting or settlement of Existing Restricted Stock Awards, Existing RSU Awards and Existing DSU Awards outstanding on the date hereof or granted in accordance with the terms of this Agreement or as described in and (ii) any such transaction by a wholly owned Subsidiary of the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any which remains a wholly owned Subsidiary after consummation of such planstransaction;
(b) Enter into purchase, redeem or otherwise acquire, directly or indirectly, or amend the terms of any material partnership arrangements, joint development agreements Company Securities or strategic alliancesSubsidiary Securities, except for the delivery of Shares by holders of Existing Stock Options, Existing Restricted Stock Awards, Existing RSU Awards or Existing DSU Awards to pay any applicable exercise or purchase price and/or Taxes related to the exercise or vesting of such awards;
(c) split, combine, subdivide or reclassify its capital stock or declare, set aside, make or pay any dividend or distribution (whether in cash, stock or property) on any shares of its capital stock, other than cash dividends paid to the Company or one of its Subsidiaries by a Subsidiary of the Company with regard to its capital stock or other equity interests and other than any such transaction by a wholly owned Subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction;
(d) (i) subject to Section 5.01(v) and Section 5.01(w), except in each case for (A) acquisitions of assets, properties or rights not exceeding $150 million individually, (B) sales, leases, licenses or dispositions of assets, properties or rights with a fair market value not exceeding $100 million individually, (C) any transactions between the Company and a wholly owned Subsidiary of the Company or between wholly owned Subsidiaries of the Company, (D) transactions otherwise permitted under other clauses of this Section 5.01 and (E) sales, leases, licenses or dispositions of inventory and collection of accounts receivable in the ordinary course, make any acquisition or disposition or cause any acquisition or disposition to be made, by means of a merger, consolidation, recapitalization or otherwise, of any business, assets or securities or sell, lease, license or otherwise dispose of assets or securities of the Company or any of its Subsidiaries other than sales of inventory in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or provided, that clauses (B) pursuant to written agreements outstanding), or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements and (E) of the Company or any of its Subsidiaries under similar circumstances;
(dthis Section 5.01(d)(i) Transfer, license or sell shall not apply to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Intellectual Property Rights (including rights to resell or relicense which are the Company Proprietary Rightssubject of, and governed by, Section 5.01(j), Section 5.01(v) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of billsand Section 5.01(w)), (ii) for software piracyadopt a plan of complete or partial liquidation, dissolution, recapitalization or restructuring, or (iii) enter into a Material Contract or amend or terminate any Material Contract in such cases where the Company in good faith determines that failure to commence suit would result in the any material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parentrespect, or grant any release or relinquishment of their affiliates, nor shall the Company be required to consult with Parent with respect thereto)any material rights under any Material Contract;
(fe) Declare or pay any dividends on or make any other distributions (whether in cashincur, stock or property) in respect of any of its capital stockcreate, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase assume or otherwise acquirebecome liable or responsible for any long-term debt or short-term debt, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
for debt (i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or not to exceed $250 million in connection with existing agreements entered into between the Company aggregate and Silicon Valley Bank;
(kii) Incur any material indebtedness for borrowed money among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries;
(f) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except wholly owned Subsidiaries of the Company;
(g) make any loans, advances or capital contributions to, or investments in, any other Person (other than ordinary course trade payables wholly owned Subsidiaries of the Company), except in each case for (i) investments or capital contributions not exceeding $15 million individually or $150 million in the aggregate and (ii) pursuant to existing credit facilities contracts in existence on the date hereof, in accordance with their terms as in effect on the date hereof;
(h) change in any material respect, any financial accounting methods, principles or practices used by it, except as required by GAAP, any applicable generally accepted accounting principles, SEC rule or policy or applicable Law;
(i) subject to Section 5.01(v) and Section 5.01(w), mortgage, pledge, encumber or otherwise subject to any Lien (other than Permitted Liens) or license any material assets (other than Intellectual Property Rights (which are the subject of, and governed by, Section 5.01(j), Section 5.01(v) and Section 5.01(w))), tangible or intangible, except in each case for mortgages, pledges or Liens (i) that are in the ordinary course of businessbusiness consistent with past practice, (ii) not exceeding $50 million individually or guarantee $200 million in the aggregate, (iii) between the Company and a wholly owned Subsidiary of the Company or between wholly owned Subsidiaries of the Company and (iv) pursuant to existing contracts in existence on the date hereof, in accordance with their terms as in effect on the date hereof;
(j) subject to Sections 5.01(v) and Section 5.01(w), license, assign, mortgage, pledge, subject to any such prohibited indebtedness Lien, grant a covenant not to xxx, or issue otherwise encumber any Intellectual Property Right, assert any Intellectual Property Right in any new Action or sell in any debt securities counter claim, or warrants amend, renew, terminate, sublicense, assign, or rights to acquire debt securities of otherwise modify any license or other agreement by the Company or any of its Subsidiaries with respect to any Intellectual Property Right, other than: (i) non-transferable, non-sublicensable, non-exclusive standard licenses entered into in the ordinary course of business, consistent with past practices, to any person for sale or guarantee distribution of, or use, solely for a Company Product (including to customers, contract manufacturers, developers and resellers) and (ii) declarations of patents to standard setting bodies under pre-existing commitments to declare such patents;
(k) except in the ordinary course of business, make or change any debt securities material Tax election or settle or compromise any material federal, foreign, state or local income Tax liability for an amount materially in excess of othersamounts reserved (it being agreed and understood that the Company does not make any covenants pursuant to this Section 5.01 relating to Tax matters, except as provided in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereofthis Section 5.01(k));
(l) Except adopt any amendments to its Certificate of Incorporation or Bylaws (or other similar governing documents);
(m) except as required by law or permitted by SECTION 6.1(C), adopt or amend pursuant to the terms and conditions of any Company Scheduled Employee Plan or increase International Employee Plan, in each case, as in effect on the salaries date of this Agreement, enter into any new, or wage rates amend, terminate or renew any existing, employment, severance, consulting or salary continuation agreements with or for the benefit of any employees with a title of its corporate vice president or above, or directors of the Company, or grant any increases in the compensation or benefits to officers, directors or employees (except for wage other than normal increases in the ordinary course of business and consistent with past practices)practices and that, including but in the aggregate, do not limited to result in an increase in cash compensation (but without limiting the generality i.e. base salary and annual target bonus opportunity) expense of the foregoingCompany in excess of five percent (5%) during any twelve (12) month period), ;
(n) except as required pursuant to the adoption or amendment terms and conditions of any stock purchase Company Employee Plan or option planInternational Employee Plan, in each case, as in effect on the entering into date of this Agreement, grant any employment contract stock-related, performance or similar awards or bonuses;
(o) forgive any loans to employees, officers or directors or any of their respective Affiliates or Associates;
(p) [Intentionally omitted.]
(q) other than in the ordinary course of business consistent with past practice, make any deposits or contributions of cash or other property to, or take any other action to, fund or in any other way secure the payment of compensation or benefits under the Company Employee Plans, International Employee Plans or agreements subject to the Company Employee Plans or International Employee Plans, or any special bonus other plan, agreement, contract or special remuneration to any director or employeearrangement of the Company;
(mr) Revalue (i) terminate the employment of any officer or employee with the title of corporate vice president or above without prior consultation with Parent, except as a direct result of such officer’s or employee’s (A) willful failure to perform the assets duties or responsibilities of his employment, (B) engaging in serious misconduct, or (C) being convicted of or entering a plea of guilty to any crime, or (ii) undertake (A) any material reduction in force, (B) any reduction in force that would result in any liability for noncompliance with the notice provisions of WARN Act to the Company or any of its Subsidiaries under WARN Act, or (C) without prior consultant with Parent, any reduction in force that is subject to WARN Act, in each case, in respect of the employees of the Company or its Subsidiaries;
(s) except as required pursuant to the terms and conditions of any Company Employee Plan or International Employee Plan, including in each case, as in effect on the date of this Agreement, (i) enter into any material collective bargaining agreement or other material works council or labor union agreement, or (ii) without limitation writing down first using commercially reasonable efforts to disclose to Parent, in reasonable detail, the value bargaining strategy of inventorythe Company or any Subsidiary of the Company, writing off notes as applicable, amend or accounts receivablerenew any collective bargaining agreement or other works council or labor union agreement in effect as of the date of this Agreement or entered into pursuant to the foregoing clause (i);
(t) except as required pursuant to the terms and conditions of any Company Employee Plan or International Employee Plan, in each case, as in effect on the date of this Agreement, adopt, amend or terminate any Company Employee Plan or International Employee Plan or any other bonus, severance, insurance pension or other employee benefit plan or arrangement, other than in the ordinary course of business consistent with past practice with respect to broad-based plans (other than severance plans) and as would not result in a material increase in benefits or as required by GAAP or applicable lawcompensation expense to the Company;
(nu) Except as incur any material capital expenditure or any obligations, liabilities or indebtedness in respect thereof, except for any capital expenditures not exceeding (i) $50 million individually, (ii) $225 million in the aggregate in 2011 (taking into account any expenditures incurred prior to the date hereof in 2011) and (iii) $250 million per year for 2012 and after;
(v) settle any Action (including any Action relating to this Agreement or the transactions contemplated hereby, and including the Actions set forth in Section 3.10 of the Disclosure Letter), provided that the Company and its Subsidiaries, in any fiscal quarter, may enter into settlements that would not involve any of the following: (i) the sale, mortgage, pledge or other disposition or encumbrance of any Intellectual Property Right or the grant of any license (or similar commitment, such as a covenant not to xxx) from the Company or its Subsidiaries (nor any potential obligation to grant the foregoing in the future), (ii) the amendment, renewal, termination, sublicense, assignment, or modification of a license or similar agreement with the Company, or (iii) a commitment to make any payment or provide other consideration where the aggregate value of all consideration in respect of all such settlements entered into in any calendar quarter (or, if there are royalties or other consideration other than fixed cash payments, the reasonable expected value) exceeds the dollar amount set forth on Section 5.01(v) of the Disclosure Schedule or as otherwise permitted by this SECTION 6.1, Letter on a cumulative basis;
(w) pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, absolute or accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction of liabilities (i) to the extent of the amounts disclosed, reflected or reserved against in the most recent audited financial statements (or the notes thereto) of the Company included in the Company SEC Reports filed prior to the date hereof, or (ii) in the ordinary course of business consistent with past practice and not in violation of liabilities this Section 5.01;
(x) take or omit to take any action that would cause any Company Intellectual Property, including with respect to any registrations or applications for registration, to lapse, be abandoned or canceled, or fall into the public domain, other than actions or omissions in the ordinary course of business consistent with past practice and not otherwise in violation of this Section 5.01;
(y) convene any regular or special meeting (or any adjournment thereof) of the type reflected or reserved against in stockholders of the Company Financial Statements (or in other than the notes thereto); 41
(o) Except Special Meeting, except as required by applicable Tax law, make Law (including the New York Stock Exchange) or change any material election in respect as required by the Certificate of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver Incorporation and Bylaws of the limitation period applicable to any claim or assessment in respect of TaxesCompany; or
(pz) Except for any change which is required by reason of a concurrent change in GAAPagree, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting authorize or accounting practice used by it;
(q) Except as otherwise permitted pursuant commit to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company foregoing actions or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiariesproposal thereof.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Conduct of Business of the Company. During the period from the date of ---------------------------------- this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, the Company agrees (except to the extent that Parent shall otherwise consent in writing or as contemplated by this Agreement) to carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to pay its debts and Taxes when due, to pay or perform other obligations when due, and, to the extent consistent with such business, to use all reasonable efforts consistent with past practice and policies to preserve intact its present business organization, keep available the services of its present officers and key employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees and others having business dealings with it, all with the goal of preserving unimpaired its goodwill and ongoing businesses at the Effective Time. The Company shall promptly notify Parent of any materially negative event involving or adversely affecting the Company or its business. In addition, except as permitted by the terms of this Agreement, without the prior written consent of Parent, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective Time, the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizations, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit do any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):following:
(a) Except as provided in this Agreement or as described in the Company Disclosure SchedulesWaive any stock repurchase rights, accelerate, amend amend, or change the period of exercisability of options any outstanding Company Options or restricted stockCompany Common Stock subject to vesting, or reprice options Company Options granted under the Company Option Plans Plan or authorize cash payments in exchange for any options granted under any of such plansoptions;
(b) Enter Make any payments or enter into any material partnership arrangements, joint development agreements commitment or strategic alliances, except transaction outside of the ordinary course of business in excess of $100,000 or in the ordinary course of business consistent with past practicein excess of $200,000;
(c) Except as required by law Make any capital expenditure or capital commitment of $25,000 in any existing benefit plans and agreements of individual case or $50,000 in the Company or any of its Subsidiaries, grant any severance or termination aggregate (other than commitments to pay (i) to any executive officer or (ii) to any other employee except payments made (A) expenses incurred in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstancestransactions contemplated by this Agreement);
(d) TransferPermit the destruction of, license damage to or sell to loss of any person material asset, business or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms customer of the Company (whether or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.not covered by insurance);
(e) Commence Change accounting methods, principles or practices (including any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, change in depreciation or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company amortization policies or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect theretorates);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this AgreementGAAP;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Cobalt Networks Inc)
Conduct of Business of the Company. Concurrently with the execution of this Agreement, the Company shall have submitted a Working Operating Plan in a form previously approved by Acquirer. The Working Operating Plan shall, among other matters, contain a detailed spending budget and set forth a maximum dollar amount to be spent by the Company (the “Spending Limit”) between the date of this Agreement and the Closing Date. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective TimeClosing, the Company agrees (which for the purposes of this SECTION 6.1 shall include unless the Company and each of is required to take such action pursuant to this Agreement or by applicable Law or Acquirer shall give its Subsidiaries) agrees, except to the extent that Parent shall otherwise prior consent in writing (writing, which consent shall not be unreasonably withheld withheld, conditioned or delayed)) to, to carry on its business and to cause each of its Subsidiaries to to, carry on its business the Business in the usual, regular and ordinary coursecourse consistent with past practice and in any event in accordance with the Working Operating Plan, to pay its Liabilities and Taxes consistent with the Company’s and its Subsidiaries’ past practices (and in any event when due), to use pay or perform other obligations when due consistent with the Company’s and cause each of its Subsidiaries Subsidiaries’ past practices (other than Liabilities, Taxes and other obligations, if any, contested in good faith through appropriate proceedings), and, to the extent consistent with such business, to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizationsorganization, keep available the services of its present officers and key employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, independent contractors and others other Persons having business dealings with the Company or any and its Subsidiaries. In addition, prior to Closing, the Company shall, and shall cause its Subsidiaries to, cooperate in good faith with Acquirer to facilitate the transition of the Company’s and its Subsidiaries’ customers and vendors, including, but not limited to, obtaining assignments, consents, and assurances from such Subsidiaries, customers and vendors with respect to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective TimeMerger if reasonably requested by Acquirer. Except as expressly provided for contemplated by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of cause its Subsidiaries not to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld Acquirer, take or delayed):
(a) Except as provided agree in writing to take, any action that would make any of their representations or warranties contained in this Agreement untrue or as described incorrect in any material respect or prevent the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stockfrom performing, or reprice options granted under knowingly cause the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development not to perform its agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstandingcovenants hereunder, or policies existing, on the date hereof and as previously disclosed knowingly cause any condition to Acquirer’s closing obligations in writing Section 7.1 or Section 7.3 not to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without satisfied. Without limiting the generality of the foregoing), during the adoption or amendment period from the date of any stock purchase or option plan, this Agreement and continuing until the entering into earlier of any employment contract the termination of this Agreement or the payment of any special bonus or special remuneration Closing, (i) the Company shall cause its officers to any director or employee;
report regularly (mbut in no event less frequently than every week) Revalue any to Acquirer concerning the status of the assets of the Company or any of its SubsidiariesBusiness if requested by Acquirer, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
and (nii) Except except as set forth in Section 4.1 of the Company Disclosure Schedule or as otherwise required or permitted by this SECTION 6.1, pay, discharge Agreement or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAPPlan, the Company will notshall not do, and will not permit any of its Subsidiaries to, change any method of accounting knowingly cause or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which authorize any of the Company or following, including by any of its Subsidiaries is a party or under which Subsidiary (unless the Company or any such Subsidiary is required to take such action pursuant to this Agreement or by applicable Law), without the prior written consent of its Subsidiaries has any rightsAcquirer, and will use its best efforts to enforce which shall not be unreasonably withheld, conditioned or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.delayed:
Appears in 1 contract
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the date of acceptance for payment and payment of shares of Company Common Stock by Merger Sub in the Effective TimeOffer (on the expiration date of the Offer (as determined in accordance with Section 1.01(b)) (the "Offer Closing Date"), the Company (which for the purposes of this SECTION 6.1 shall include the Company covenants and each of its Subsidiaries) agreesagrees that, except to the extent that Parent shall otherwise consent in writing (which consent writing, the Company shall conduct its business only in, and the Company shall not be unreasonably withheld or delayed)take any action except in, to carry on its the ordinary course of business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts a manner consistent with past practices practice; and policies the Company shall use reasonable commercial efforts to preserve substantially intact its present the business organizationsorganization of the Company, to keep available the services of its the present officers and officers, employees and consultants of the Company, to prevent the loss, cancellation, abandonment, forfeiture or expiration of any intellectual property rights of the Company, to preserve its in full force and effect all material licenses and approvals held by the Company and to preserve the present relationships of the Company with customers, suppliers, distributors, licensors, licensees, suppliers and others having business dealings other persons with which the Company or any such Subsidiarieshas significant business relations. By way of amplification and not limitation, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except except as expressly provided for contemplated or permitted by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, during the period from the date of this Agreement and shall not permit any continuing until the earlier of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant or the Offer Closing Date, directly or indirectly do, or propose to its termsdo, any of the following without the prior written consent of Parent (Parent, which consent shall not be unreasonably withheld or delayed):withheld:
(a) Except as provided in this Agreement amend or as described in otherwise change the Company's Certificate of Incorporation or By-Laws;
(b) issue or sell, or authorize the issuance or sale of, any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including, without limitation, any phantom interest) of the Company Disclosure Schedules(except for the issuance of shares of Company Common Stock issuable pursuant to Options under the Company Stock Option Plans which Options are outstanding on the date of this Agreement);
(c) waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans; provided, however, the foregoing shall not apply to the terms and conditions of any Options issued pursuant to the Company Stock Option Plans;
(bd) Enter into adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than the Merger);
(e) sell, pledge, dispose of or encumber any material partnership arrangementsassets of the Company;
(f) transfer or license to any person or entity or otherwise extend, joint development agreements amend or strategic alliancesmodify in any material respect any rights to the Company Intellectual Property, except other than nonexclusive licenses in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstandingdeclare, or policies existingset aside, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare 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 any of its capital stock, or (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 of stock; or (iii) amend the Company;
(g) Repurchase terms of, repurchase, redeem or otherwise acquire, directly or indirectly, acquire any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Causeacquire (by merger, permit consolidation, or propose acquisition of stock or assets) any amendments to corporation, partnership or other business organization or division thereof; (ii) incur any indebtedness for borrowed money, or issue any debt securities, or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the Company's certificate of incorporation or by-laws, except as required by the terms obligations of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claimsperson, or rights, in each casemake any loans or advances, except in the ordinary course of business consistent with past practice practice; (iii) authorize any capital expenditures or in connection with existing agreements entered purchase of fixed assets; or (iv) enter into between or amend any contract, agreement, commitment or arrangement to effect any of the Company and Silicon Valley Bankmatters prohibited by this Section 6.01(h);
(ki) Incur amend any material employment agreement, increase the compensation payable or to become payable to its officers or employees, except for commissions payable pursuant to the Company's Sales Incentive Plans for fiscal year March 31, 2003 (copies of which have been made available or otherwise provided to Parent and listed on Section 4.12(a) of the Company Disclosure Schedule); or grant any severance or termination pay to (other than pursuant to pre-existing arrangements under written documents listed on Section 4.12(a) of the Company Disclosure Schedule), or enter into any employment or severance agreement with any director, officer or other employee of the Company; or establish, adopt, enter into or amend any Company Employee Plan except as may be required by law;
(j) incur any indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or of another person, issue or sell any debt securities or warrants options, warrants, calls or other rights to acquire any debt securities of the Company Company, enter into any "keep well" or other agreement to maintain any financial statement condition, incur or modify any other material liability or enter into any arrangement having the economic effect of any of its Subsidiaries the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice or guarantee any debt securities of others, except in each case (ii) pursuant to existing agreements entered into between credit facilities as in effect on the date hereof in the ordinary course of business;
(k) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or affiliate or pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or affiliates of the Company of any amount relating to unused vacation days , except (i) for payments required by law, (ii) for payments and Silicon Valley Bank up accruals made in the ordinary course of business consistent with past practice and (iii) as otherwise permitted by (m) below; adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any Company director, officer, employee, agent or consultant, whether past or present provided, however, the foregoing shall not apply to the aggregate amount that is borrowed thereunder as terms and conditions of any Options outstanding under the Company Stock Option Plans and the terms and conditions of those certain agreements set forth on Section 4.12(a) of the date hereofCompany Disclosure Schedule; or amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(l) Except as required by law modify, amend or permitted by SECTION 6.1(Cterminate any Material Contract, or waive, release or assign any material rights or claims thereunder or enter into any agreement or arrangement that would be considered a Material Contract hereunder, except, in each such case, any such action that is made in the ordinary course of business, consistent with past practice, except for the Company's Key Man life insurance policy (which is identified in Section 4.06(a) of the Company Disclosure Schedule), adopt which such policy shall be cancelled by the Company effective as of the Offer Closing Date;
(m) pay, discharge or amend satisfy any Company Scheduled Plan claims, liabilities or increase obligations (whether absolute, accrued, contingent or otherwise), other than the salaries payment, discharge or wage rates satisfaction of any such claims, liabilities or obligations, in the ordinary course of its employees business consistent with past practice (except including, without limitation, the payments under those severance agreements referenced on Section 4.12(a) of the Company Disclosure Schedule), or of claims, liabilities or obligations reflected or reserved against in the financial statements of the Company or incurred in connection with the transactions contemplated by this Agreement (including, without limitation: (i) payment to Covington Associates on the Offer Closing Date of the net amount due for wage increases xxx "Xxximum Transaction Success Fee" (as defined in the Financial Advisor Agreement listed on Section 4.06(a) of the Company Disclosure Schedule); (ii) payment on the Offer Closing Date of
(1) Patrick H. Kareiva's accrued but unused vacation time as of the Offer Clxxxxx Xxxx, xxxx (0) Mr. Kareiva's accrued but unpaid salary as of the Offer Closing Date, plxx (0) Xx. Xxreiva's out of pocket expenses incurred but unpaid as of the Offer Xxxxxxx Xxxx provided such out-of pocket expenses were incurred in the ordinary course of business and consistent with past practicespractice, plus (4) Mr. Kareiva's lump sum severance amount due under Mr. Kareiva's Employmexx Xxxxxxxxx (as described in Section 4.05(a) of txx Xxxxxxx Xxsclosure Schedule), including but not limited to ; (but without limiting iii) payment on the generality Offer Closing Date of the foregoingpremium for the "run off" period of the Company's Directors and Officers liability insurance (as further described in Section 7.05(c) hereof), ; and (iv) payment on the adoption or amendment Offer Closing Date of any stock purchase or option plan, all legal fees and expenses of the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employeeCompany's legal counsel);
(mn) Revalue take any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivableaction, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
the SEC, to change accounting policies or procedures (n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or procedures with respect to any bonus or special remunerationrevenue recognition, other than the payment, discharge or satisfaction in the ordinary course payments of business accounts payable and collection of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes theretoaccounts receivable); 41;
(o) Except as required by applicable make any Tax law, make election inconsistent with past practices or change settle or compromise any material election in respect Federal, state, local or foreign tax liability or agree to an extension of Taxes, adopt or change in a statute of limitations for any material respect assessment of any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of TaxesTax; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Taketake, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(ASections 6.01(a) THROUGH through (Ro) above, or any action which would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect in any material respect or prevent the Company from performing in any material respect or cause the Company not to perform in any material respect its covenants hereunder or would be reasonably likely to cause result in any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, herein not to be being satisfied.
Appears in 1 contract
Samples: Merger Agreement (Softech Inc)
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective TimeClosing, the Company agrees (which for the purposes of this SECTION 6.1 shall include unless the Company and each of is required to take such action pursuant to this Agreement or Acquirer shall give its Subsidiaries) agrees, except to the extent that Parent shall otherwise prior consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries withheld) to carry on its business in the usual, regular and ordinary coursecourse consistent with past practice to pay its Liabilities and Taxes consistent with the Company’s past practices (and in any event when due), to pay or perform other obligations when due consistent with the Company’s past practices (other than Liabilities, Taxes and other obligations, if any, contested in good faith through appropriate proceedings), and, to use and cause each of its Subsidiaries the extent consistent with such business, to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizationsorganization, keep available the services of its present officers and key employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, independent contractors and others other Persons having business dealings with it, all with the Company or any such Subsidiaries, to the end that the express purpose and intent of preserving its goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective TimeClosing Date. In addition, the Company shall, prior to the Closing, cooperate in good faith with Acquirer to facilitate the transition of the Company’s customers and vendors, including, but not limited to, obtaining assignments, consents, and assurances from such customers and vendors with respect to the Acquisition. Except as expressly provided for contemplated by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3Acquirer, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any action that would make any of its representations or warranties contained in this Agreement untrue or incorrect in any material respect or prevent the actions described in SECTION 6.1(A) THROUGH (R) above, Company from performing or any action which would cause the Company not to perform its agreements and covenants hereunder or would be reasonably likely to knowingly cause any of the conditions condition to the Merger set forth Acquirer’s closing obligations in SECTIONS Section 7.1 OR 7.3, or Section 7.3 not to be satisfied.. Without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Closing, (i) the Company shall cause its officers to report regularly (but in no event less frequently than weekly) to Acquirer concerning the status of the Company’s business, and (ii) except as set forth in the Disclosure Schedule or as required or expressly permitted by this Agreement, the Company shall not do, cause or permit any of the following, without the prior written consent of Acquirer:
Appears in 1 contract
Conduct of Business of the Company. (a) Nothing in this Agreement shall result in the Purchaser exercising material influence over the business or operations of the Company or its Subsidiaries prior to the Effective Date. For greater certainty, prior to the Effective Date, the Company will exercise, consistent with the terms of this Agreement, complete control and supervision over its and its Subsidiaries' business and operations.
(b) During the period from the date of this Agreement and continuing until the earlier of the termination of Effective Time and the time that this Agreement pursuant to its terms and is terminated, except:
(i) with the Effective Time, express written consent of the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing Purchaser (which consent shall not be unreasonably withheld withheld, conditioned or delayed);
(ii) as required or permitted by this Agreement;
(iii) as may be required by Law or a Governmental Authority; or
(iv) as set out in the Company Disclosure Letter; the Company shall, to carry on its business and to shall cause each of its Subsidiaries to carry on to, conduct its business in the usual, regular Ordinary Course and ordinary course, the Company shall use commercially reasonable efforts to (A) maintain and to use preserve its and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices Subsidiaries' business organization, assets, properties, employees, goodwill and policies to preserve intact its present business organizations, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, partners and others having business dealings other Persons with which the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at has business relations, and (B) execute and adhere to its Capital Program, except to the extent that any failure to execute and adhere to its Capital Program is de minimis in nature.
(c) Without limiting the generality of Section 4.1(b), during the period from the date of this Agreement until the earlier of the Effective Time. Except Time and the time that this Agreement is terminated, except:
(i) with the express written consent of the Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed);
(ii) as expressly provided for required or permitted by this Agreement, the Credit Agreement, the Security Agreement, ; or
(iii) as may be required by Law or the Software Distribution Agreement, a Governmental Authority; the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time directly or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):indirectly:
(aA) Except as provided in this Agreement or as described in amend: (I) the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stockConstating Documents, or reprice options granted under (II) the Company Option Plans articles of incorporation, articles of amalgamation, by-laws or authorize cash payments in exchange for any options granted under other constating documents of any of such plansits Subsidiaries that is a corporation;
(bB) Enter into split, combine, reclassify or amend the terms of any material partnership arrangements, joint development agreements securities of the Company or strategic alliances, except in the ordinary course of business consistent with past practiceany of its Subsidiaries;
(cC) Except as required by law make, declare, set aside or pay any dividend or other distribution or payment in cash, shares or property (or any existing benefit plans combination of the foregoing) on any class of securities of the Company or of any of its Subsidiaries (other than dividends or distributions solely among or between the Company and agreements its Subsidiaries);
(D) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any securities of the Company or any of its Subsidiaries;
(E) enter into any Contract with respect to the voting rights of any Company Shares;
(F) issue, grant, deliver, sell, pledge or otherwise encumber, or authorize the issuance, grant, delivery, sale, pledge or other encumbrance of any, securities, or any options, warrants or similar rights exercisable or exchangeable for or convertible into securities of the Company or any of its Subsidiaries, grant other than pursuant to the exercise of Equity Incentive Awards that are outstanding as of the date of this Agreement in accordance with their terms;
(G) acquire any severance Person, business, line of business (by merger, consolidation, acquisition of stock or termination pay (i) to assets or otherwise), directly or indirectly, in one transaction or in a series of related transactions, or make any executive officer investment in a Person, directly or (ii) to indirectly, in one transaction or a series of related transactions, either by purchase of shares or securities, contributions of capital, loan or advance, property transfer or purchase of any other employee property or assets of any Person, except payments made (A) in connection accordance with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices Capital Program;
(H) grant or (B) pursuant commit to written agreements outstanding, grant an exclusive license or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements otherwise transfer any IP Rights of the Company or any of its Subsidiaries under similar circumstancesSubsidiaries;
(dI) Transfersell, license assign, transfer, lease, exclusively license, abandon or sell permit to any person or entity lapse, transfer or otherwise extend, amend or modify dispose of any rights to the Company Proprietary IP Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that other than the Company consults with expiration of any IP Right at the Parent prior to the filing end of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto)its statutory term;
(fJ) Declare reorganize, restructure, recapitalize, amalgamate or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of merge the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley BankSubsidiaries;
(kK) Incur reduce the stated capital of any material indebtedness for borrowed money (other than ordinary course trade payables class or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities series of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets shares of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(nL) Except as set forth in adopt a plan of liquidation or pass resolutions providing for the Company Disclosure Schedule liquidation or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf dissolution of the Company or any of its Subsidiaries.;
(sM) Takeenter into, or agree in writing resolve to enter into, any agreement that has the effect of creating a joint venture or partnership;
(N) enter into any agreement or arrangement that limits or otherwise to takerestricts in any respect the Company or any successor thereto, or that would, after the Effective Time, limit or restrict in any respect the Company or any of its Subsidiaries from competing in any manner; (O) enter into any "related party transaction" within the actions described in SECTION 6.1(A) THROUGH (R) abovemeaning of MI 61-101, or any action which would cause or would be reasonably likely to cause any of including those exempted from the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.formal valuation and/or minority approval requirements thereunder;
Appears in 1 contract
Conduct of Business of the Company. During the period from the date ---------------------------------- of this Agreement and continuing until the earlier of (i) the termination of this Agreement and (ii) the Effective Time, the Company agrees (except to the extent that Parent shall otherwise consent in writing, which consent shall not be unreasonably withheld or delayed, except as contemplated by this Agreement) to carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to use all reasonable efforts consistent with past practice to pay its debts and Taxes when due and to pay or perform other obligations when due, and, to the extent consistent with such business, to use all reasonable efforts consistent with past practice and policies to preserve intact its present business organization, keep available the services of its present officers and key employees and preserve their relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, all with the goal of preserving unimpaired its goodwill and ongoing businesses at the Effective Time. The Company shall use all reasonable efforts to promptly notify Parent of any event or occurrence or emergency not in the ordinary course of its business, and any material event involving the Company or its business. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizations, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for contemplated by this AgreementAgreement or disclosed in Schedule 4.1, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the -29- Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement and the Effective Time (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement Transfer to any person or as described in entity any rights to the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options Intellectual Property (other than pursuant to end-user licenses granted under by the Company Option Plans pursuant to its standard form of end-user license or authorize cash payments in exchange for any options end-user licenses granted under any of such plansby the Company consistent with past practice);
(b) Enter into or amend any material partnership arrangementsagreements pursuant to which any other party is granted marketing, joint development agreements distribution or strategic alliancessimilar rights of any type or scope with respect to any products of the Company;
(c) Amend or otherwise modify (or agree to do so), except in the ordinary course of business consistent with past practice;
(c) Except as required by law business, or violate the terms of, in a manner that would result in material liability to the Company, any existing benefit plans and agreements of the Company agreements set forth or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) described in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstancesSchedules;
(d) Transfer, license or sell to Commence any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.litigation;
(e) Commence any material litigation other than (i) for the routine collection of billsDeclare, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) 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, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase , or repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by(or options, and warrants or other rights exercisable therefor) other than repurchases made in accordance with, any with agreements existing as of the date hereof and as set forth referred to on SECTION 6.1(G) of the Company Disclosure Schedules;
(hf) Except as required by the terms of any agreement between Other than (1) repurchases made in accordance with agreements referred to on the Company and any holder Schedules, (2) the granting of stock options in the ordinary course of business, consistent with past practice, or (3) the issuance of shares of Company Series E Capital Stock upon exercise or conversion of presently outstanding Company Options, Company Options granted in the future in accordance with this Section 4.1, or currently outstanding shares of Company Preferred Stock entered into on or prior to the date of this AgreementStock, issue, delivergrant, deliver or sell or authorize or propose the issuance, deliverygrant, grant delivery or sale of, or purchase or propose the purchase of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities;
(g) Cause or permit any amendments to its Articles of Incorporation or Bylaws;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or equity securities of, or by any other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights manner, any business or Company Series E Preferred Stockany corporation, stock options partnership, association or warrants outstanding as of the date of this Agreementother business organization or division thereof;
(i) Cause, permit Acquire or propose agree to acquire any amendments to assets in an amount in excess of $25,000 in the Company's certificate case of incorporation a single transaction or byin excess of $125,000 in the aggregate in any 30-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreementday period;
(j) Sell, lease, license, encumber license or otherwise dispose of any of the its properties or assets assets, except in the ordinary course of business;
(k) Except pursuant to its existing credit agreements with Silicon Valley Bank, incur any indebtedness for borrowed money or guarantee any such indebtedness outside the ordinary course of business or issue or sell any debt securities of the Company or guarantee any debt securities of others;
(l) Grant any severance or termination pay (i) to any director or officer or (ii) to any other employee, except payments made pursuant to standard written agreements previously disclosed to Parent on the Company Disclosure Schedules;
(m) Adopt or amend any employee benefit plan, or enter into any employment contract, pay or agree to pay any special bonus or special remuneration to any director or employee, or increase the salaries or wage rates of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each caseemployees or, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bankpractices, extend employment offers;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(mn) Revalue any of the assets of the Company or any of its Subsidiariesassets, including without limitation writing down the value of inventory, inventory or writing off notes or accounts receivable, receivable other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable lawbusiness;
(no) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, payPay, discharge or satisfy satisfy, in an amount in excess of $100,000 25,000 (in any one case) or $500,000 125,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001aggregate), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of of: (A) liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41, (B) liabilities that arose or arise in the ordinary course of business consistent with past practice since March 31, 1999, (C) expenses consistent with the provisions of this Agreement incurred in connection with any transaction contemplated and permitted hereby, or (D) liabilities or obligations that are identified in the agreements referred to in the Company Schedules, provided that the Company give prior notice to Parent of any payment under this Section 4.1(o)(D);
(op) Except as required by applicable Tax law, make Make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money)Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3Enter into any strategic alliance, take any action to exempt development or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;joint marketing agreement; or
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(ASections 4.1(a) THROUGH through (Rq) above, or any other action which that would prevent the Company from performing or cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, Company not to be satisfiedperform its covenants hereunder.
Appears in 1 contract
Samples: Merger Agreement (Critical Path Inc)
Conduct of Business of the Company. (a) During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective TimeClosing, the Company Seller shall (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent Buyer shall otherwise consent in writing (writing, which consent shall will not be unreasonably withheld withheld, conditioned or delayed), ) cause the Company and the Company shall agree to carry on its business diligently in the ordinary course consistent with past practice, pay its debts when due and to cause each of pay its Subsidiaries to carry on Taxes when due, pay or perform its business in the usual, regular other obligations when due and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizationsmaintain in full effect the Company Permits, keep available and maintain the services assets used in the Business in good operating condition and repair, maintain the business organization of its present officers and employees the Company intact and preserve its relationships with customers, the goodwill of the suppliers, distributorscontractors, licensors, licenseesEmployees, customers, distributors and others having business dealings relations with the Company Company, make available to Buyer and Parent Nxxxxxxx Xxxxxxx (or any such Subsidiariesan executive knowledgeable about the Business designated by ROC's President and Chief Executive Officer should Mx. Xxxxxxx become unavailable for reasons beyond the control of Mx. Xxxxxxx or the Company), upon reasonable prior notice to ROC's President and Chief Executive Officer, Axxx Xxxx, and in a manner that reasonably minimizes the interference with Mx. Xxxxxxx'x performance of his duties to the end that the goodwill and ongoing businesses of Company and each the disruption to the Company's business activities, and not terminate the services of its Subsidiaries be unimpaired at Mx. Xxxxxxx. During the Effective Time. Except as expressly provided for by period from the date of this Agreement, Agreement and continuing until the Credit Agreement, earlier of the Security Agreement, termination of this Agreement or the Software Distribution AgreementClosing, the Company Seller shall not, and shall cause the Company and its respective Affiliates not permit any of its Subsidiaries to, prior and the Company agrees not to, attempt to persuade or solicit any Employee, or any individual who devotes a majority of his or her time to the Effective Time Business, not to continue his or her employment or engagement, as the case may be, with the Company after the Closing.
(b) Without limiting the generality of Section 6.1(a), except as required by applicable Law, required by this Agreement or as set forth in Exhibit E, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant or the Closing, without the written consent of Buyer (which will not be unreasonably withheld, conditioned or delayed and which may only be withheld with respect to acts that would be reasonably expected to have a Company Material Adverse Effect), Seller agrees that it will cause the Company, and the Company agrees, not to:
(i) make any fundamental change in the Business or operations of the Company with respect to the Business;
(ii) adopt any amendment to its Articles of Incorporation, Bylaws or other applicable governing documents;
(iii) sell, pledge, lease, dispose of, grant or encumber any of its property, including the Real Property, or any of its assets or equity interests in any other Person, except for (A) sales of current assets in the ordinary course of business consistent with past practice, (B) Permitted Encumbrances and (C) other sales that do not exceed, individually or in the aggregate, Fifty Thousand Dollars ($50,000);
(iv) exercise any option to purchase, sell or lease (whether as lessor or lessee) real property or any option to extend a lease of real property (except for any extension of a lease of real property, which, by its terms, without the prior written consent of Parent (occurs automatically and which consent shall does not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any terms of such planslease);
(bv) Enter into incur, assume, or modify any material partnership arrangementsIndebtedness;
(vi) cancel any debts owed to or claims held by the Company with respect to the Business (including the settlement of any claims or litigation) other than debts owed or claims held which do not exceed individually or in the aggregate Fifty Thousand Dollars ($50,000), joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(cvii) Except other than as required by law applicable Law or the terms of a Material Contract, materially modify or amend, or terminate any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, Material Contracts other than on standard forms supplier or vendor contracts for the purchase or lease of the Company goods or any of its Subsidiaries (services modified, amended or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into terminated in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.;
(eviii) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or subject any of its Subsidiariesproperties, provided that assets or equity interests to a Lien, other than Permitted Encumbrances and Liens in existence on the Company consults with date of this Agreement;
(ix) fail to maintain the Parent prior insurance coverage relating to the filing of such a suit and keeps Parent advised Real Property existing as of the status and details date of execution of this Agreement (however, in the event that any such litigation (provided that, notwithstanding the foregoingcoverage shall be terminated or shall lapse, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding procure substantially similar substitute insurance policies in at least such amounts and against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect theretosuch risks as are currently covered by such policies);
(fx) Declare authorize for issuance, issue, sell or pay deliver (A) any dividends on equity or make voting interest in the Company or (B) any other distributions (whether in cashsecurities convertible into, stock or property) in respect of any of its capital stockexchangeable for, or splitevidencing the right to subscribe for or acquire either (1) any equity or voting interest in the Company, combine or reclassify (2) any of its capital stock securities convertible into, exchangeable for, or issue evidencing the right to subscribe for or authorize the issuance of acquire any other securities equity or voting interest in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(gxi) Repurchase split, combine, redeem, reclassify, purchase or otherwise acquire, directly or indirectly, any shares equity or voting interest in the Company, or make any other change in the capital structure of its the Company;
(xii) acquire any business or Person, by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions;
(xiii) make any capital stock expenditure or commitment therefor, enter into any capital leases or otherwise acquire any assets or properties, except in accordance with the capital expenditure budget included in Exhibit E;
(xiv) modify or rescind any of the Company Permits, or fail to use good faith efforts to obtain any renewal or extension, as may be required by Law, of any Company Permits;
(xv) subject the Company to any bankruptcy, receivership, insolvency or similar proceedings other than the Bankruptcy Case and related payments and transactions;
(xvi) make any change in any method of accounting or auditing practice other than those required by GAAP;
(xvii) prepare, amend or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods (including positions, elections or methods which would have the effect of deferring income to periods, or otherwise increase Tax liability of a period, for which Buyer is liable pursuant to Section 6.12 or accelerating deductions to periods, or decreasing any tax, attributable to periods, for which the Company is liable pursuant to Section 6.12);
(xviii) make any loans, advances or capital contributions to, or investments in, any other Person other than advances to Employees for incidental expense reimbursements in the ordinary course of business;
(xix) enter into any transaction with any Affiliate or Affiliated Person;
(xx) adopt or, except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by applicable Law or the terms of any agreement between Company Benefit Plan or with respect to amendments that do not materially increase the Company's expense, or materially decrease the coverage or available benefits under, the applicable Company and Benefit Plan, amend any holder of Company Series E Preferred Stock entered into Benefit Plan;
(xxi) except (A) as required by any Contract or any Company Benefit Plan, in each case, as in effect on or prior to the date of this Agreement, issueor (B) as required by applicable Law, deliveraward or increase any bonuses (other than the Stay Bonuses), sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible intosalaries, or other compensation to any subscriptionsEmployee, rights, warrants other than any increases in compensation or options benefits to acquirenon-officer Employees in an aggregate amount not in excess of One Hundred Thousand Dollars ($100,000) (exclusive of applicable payroll taxes and other withholding charges), or enter into other agreements or commitments of amend or modify any character obligating it to issue employment, severance or similar Contract with any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this AgreementEmployee;
(iA) Causeterminate the employment of or hire any individual whose annual compensation exceeds or is reasonably expected to exceed Seventy-Five Thousand Dollars ($75,000), permit or propose any amendments to (B) within ninety (90) days before the Company's certificate expected Closing Date, terminate the employment of incorporation or by-laws, except as required by more than 10% of the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this AgreementEmployees;
(jxxiii) Sell, lease, license, encumber or otherwise dispose of enter into any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (Contract that would constitute a Material Contract other than ordinary course trade payables supplier or pursuant to existing credit facilities vendor contracts for the purchase or lease of goods or services in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(lxxiv) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable Company's current policies or practices relating to the extension of credit to customers;
(xxv) remove any claim artwork, collectibles or assessment other memorabilia;
(xxvi) fail to maintain at least 750 slot machines in respect operation, of Taxeswhich at least 90 are available for purchase and at least 582 are owned by the Company; provided, however, that the number of slot machines set forth in this Section 6.1(b)(xxvi) shall be reduced to reflect any disposition of slot machines as a result of the Company's termination of Indebtedness or release of Liens related to slot machines, gaming devices or slot systems requested by Buyer or Parent or required by the terms of this Agreement, but in no event shall the number of slot machines in operation owned by the Company be reduced below 582; or
(pxxvii) Except for any change which is required by reason of a concurrent change in GAAPauthorize, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting commit or accounting practice used by it;
(q) Except as otherwise permitted pursuant agree to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any foregoing actions in respect of its Subsidiaries which it is a party or under which restricted by the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date provisions of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its SubsidiariesSection 6.1.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of (a) the Effective Time and (b) the termination of this Agreement pursuant to its terms and the Effective Timeprovisions of Section 8.1, the Company agrees (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiariesexcept (i) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), or (ii) as disclosed in Section 4.1 of the Disclosure Schedule, or (iii) for specific actions or specific other matters expressly contemplated by this Agreement) to carry on its the business of the Company and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, to pay the debts and Taxes of the Company and its Subsidiaries when due, to pay or perform other obligations when due, to comply in all material respects with applicable laws, rules and regulations, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts in the ordinary course of business consistent with past practices practice and policies to preserve intact its the present business organizationsorganization of the Company and its Subsidiaries, keep available the services of the Company’s and its Subsidiaries’ present officers officers, Key Executives and employees Key Employees and preserve the Company’s and its Subsidiaries’ relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company and its Subsidiaries. Except for specific actions or any such Subsidiariesspecific other matters expressly contemplated by this Agreement or as disclosed in Section 4.1 of the Disclosure Schedule, during the period from the date of this Agreement and continuing until the earlier of the Effective Time and the termination of this Agreement pursuant to the end that the goodwill and ongoing businesses provisions of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution AgreementSection 8.1, the Company shall not, and shall not permit any of its Subsidiaries to, prior to directly or indirectly, do any of the Effective Time or earlier termination of this Agreement pursuant to its terms, following without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter enter into any material partnership arrangements, joint development agreements commitment or strategic alliances, except transaction (other than pursuant to existing obligations) not in the ordinary course of business consistent or contemplating or involving the expenditure by the Company or any of its Subsidiaries of an amount in excess of $25,000 (in any one case) or, with past practicerespect to the Company and its Subsidiaries as a whole, $50,000 (in the aggregate);
(b) transfer to any Person any rights to any Company Intellectual Property or enter into any agreement with respect to Company Intellectual Property (including the license thereof) with any Person (in either case other than pursuant to Standard End-User Licenses or otherwise in the ordinary course of business);
(c) Except as required by law hire or terminate any employees or consultants (other than terminations for cause and other than hiring consultants who are paid reasonable compensation, provided the aggregate compensation paid to all such consultants hired without the consent of Parent does not exceed $100,000 in the aggregate) or encourage any employees to resign from the Company or any existing benefit plans and of its Subsidiaries;
(d) enter into, or amend in any material respects adverse to the Company or any of its Subsidiaries, any agreements pursuant to which any other party is granted marketing, distribution or similar rights of any type or scope with respect to any products of the Company or any of its Subsidiaries or any agreements that restrict the ability of the Company or any of its Subsidiaries to engage in any line of business or to compete with any Person;
(e) amend or otherwise modify (or agree to do so) or violate the terms of, any of the agreements set forth in the Disclosure Schedule;
(f) commence any litigation (except actions commenced in the ordinary course of business against third parties that are not customers of the Company or any of its Subsidiaries, grant ) or settle any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstanceslitigation;
(dg) Transferdeclare, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) 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 stockCompany Capital Stock or Subsidiary Ownership Interests, or split, combine or reclassify any of its capital stock Company Capital Stock or Subsidiary Ownership Interests or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase Company Capital Stock or Subsidiary Ownership Interests, or repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock except as required byCompany Capital Stock or Subsidiary Ownership Interests (or options, and warrants or other rights exercisable therefor) other than in accordance withwith agreements relating to Company Options or restricted stock agreements; provided, any agreements existing as however, that this Section 4.1(g) shall not apply to the conversion of Company Preferred Stock or the date hereof and as set forth on SECTION 6.1(G) exercise of the Company Disclosure SchedulesOptions;
(h) Except as required by except for the terms issuance of any agreement between the Company and any holder shares of Company Series E Capital Stock upon exercise or conversion of currently outstanding Company Options or Company Preferred Stock entered into on or prior to the date of this AgreementStock, issue, delivergrant, deliver or sell or authorize or propose the issuance, deliverygrant, grant delivery or sale of, or purchase or propose the purchase of, any shares of its capital stock of any class Company Capital Stock or Subsidiary Ownership Interests or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, cause or permit or propose any amendments to the Company's certificate articles of incorporation or by-lawsbylaws or other organizational documents, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sellcase may be, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries except solely to the extent necessary to enable the Company to consummate the Merger;
(j) cause or terminate permit any changes to the Company’s or waive any contracts, claimsof its Subsidiaries’ capital structure;
(k) acquire or agree to acquire by merging or consolidating with, or rightsby purchasing any assets or equity securities of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in each casethe aggregate, to the business of the Company or any of its Subsidiaries;
(l) except as permitted pursuant to Section 4.1(b), sell, lease, license or otherwise dispose of any of the Company’s or its Subsidiaries properties or assets, except for immaterial sales, leases, licenses or other dispositions in the ordinary course of business consistent with past practice practices or as required by agreements and arrangements listed on the Disclosure Schedule existing as of the date of this Agreement, or grant any security interest in connection with existing agreements entered into between the Company and Silicon Valley Banksuch assets or properties;
(km) Incur grant any material loan to any Person, incur any indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries Subsidiaries, or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as purchase any debt securities of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt others or amend any Company Scheduled Plan or increase the salaries or wage rates terms of any of its employees (outstanding agreements related to borrowed money, except for wage increases advances to employees for travel and business expenses in the ordinary course of business and consistent with past practices);
(n) grant any severance or termination pay to any director, including but not limited officer or employee, except payments made pursuant to (but without limiting the generality written agreements or plans listed on Section 2.14(a)(v) of the foregoing), the adoption Disclosure Schedule;
(o) adopt or amendment of amend any stock purchase or option employee benefit plan, the entering or enter into of any employment contract contract, extend employment offers, pay or the payment of agree to pay any special bonus or special remuneration to any director or employee, or increase the salaries or wage rates of its employees;
(mp) Revalue any of the assets of the Company or revalue any of its Subsidiariesassets, including without limitation writing down the value of inventory, inventory or writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(nq) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy satisfy, in an amount in excess of $100,000 25,000 (in any one case) or or, with respect to the Company and its Subsidiaries as a whole, $500,000 50,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001aggregate), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type (i) reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41) or (ii) in the ordinary course of business;
(or) Except as required by applicable Tax law, make or change any material election in with respect of to Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, agreement to settle or settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money)Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(qs) Except as otherwise permitted pursuant to SECTION 6.3enter into any strategic alliance, take any action to exempt joint development or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulationjoint marketing agreement;
(rt) Release fail to pay or permit the release of any Person fromotherwise satisfy its monetary obligations as they become due, or except such as are being contested in good faith;
(u) Knowingly waive or permit enter into a binding commitment to waive any rights with a value in excess of $15,000 (in any one case) or, with respect to the waiver of Company and its Subsidiaries as a whole, $25,000 (in the aggregate);
(v) enter into any provision of, any confidentiality, "standstill" contract or similar agreement to transaction in which any director or officer of the Company or any of its Subsidiaries is a party or under which the Company (or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf member of the Company immediate family or any of its Subsidiaries.such director or officer) has an interest; or
(sw) Taketake, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(ASections 4.1(a) THROUGH through (Rv) above, or any other action which that would prevent the Company from performing or cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, Company not to be satisfiedperform its covenants hereunder.
Appears in 1 contract
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company (which for the purposes of this SECTION Section 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary coursecourse in substantially the same manner as heretofore conducted, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizations, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure SchedulesAgreement, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing provided in the benefit plans and agreements of the Company or any of its SubsidiariesSubsidiaries listed in Section 5.2(n)(i) of the Company Disclosure Letter, or as required by law, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the CompanyParent's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, Transfer or license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Intellectual Property Rights (including rights to resell or relicense the Company Proprietary Intellectual Property Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of businessbusiness consistent with past practices; PROVIDED, including HOWEVER, that such standard forms shall provide for a non-exclusive, enterprise-wide or site licensesexclusive license of Company Intellectual Property Rights terminable at will by the Company on no more than thirty days' notice.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, except that the Company shall not require the approval of, and shall not be required to obtain Parent's consent consult with, Parent with respect to any claim, suit or proceeding by the Company against Parent, Merger Sub, any other Subsidiary of Parent, Parent or any of their its affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required byfrom former employees, directors and consultants in accordance with, any with agreements existing as of the date hereof and as set forth on SECTION 6.1(Glisted in Section 5.2(n)(i) of the Company Disclosure SchedulesLetter requiring the repurchase of shares in connection with any termination of service to the Company or any of its Subsidiaries;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issueIssue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than (i) the issuance of shares of Company Stock (with Company Rights attached thereto) Shares pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants therefor outstanding as of the date of this Agreement, and (ii) Company Shares issuable to participants in the ESPP consistent with the terms of that Plan;
(i) Cause, permit or propose any amendments to the Company's certificate Certificate of incorporation Incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this AgreementBylaws;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each caseSubsidiaries, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bankpractice;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C)law, adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable lawpractice;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1Schedule, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 250,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001aggregate), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or reflected in the notes thereto); 41;
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; oror 37
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(ASection 6.1(a) THROUGH through (Ro) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS Sections 7.1 OR or 7.3, not to be satisfied.
Appears in 1 contract
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until through the earlier of the termination of this Agreement pursuant to its terms and the Effective TimeClosing, the Company (which for shall and shall cause its Subsidiaries to, and the purposes of this SECTION 6.1 Seller shall, and shall include cause the Company and each of such Subsidiary to, (1) conduct the Company’s operations and the Business only in the Ordinary Course, in substantially the same manner as heretofore conducted, including its Subsidiaries) agrees, except practices relating to the extent offering of sales promotions with respect to any of the Company’s games, (2) use reasonable efforts to keep in full force and effect all Policies on their respective coverages and terms as in effect on the date of this Agreement, other than such policies that Parent expire by their terms (in which event the Seller, the Company or their respective Subsidiaries, as applicable, shall otherwise consent in writing (which consent shall not be unreasonably withheld use reasonable efforts to renew or delayedreplace such Policies with policies that have coverages and terms materially consistent with those of the related Policy as of the date of this Agreement), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to (3) use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact the Company’s current business organization, and maintain its present relations and goodwill with all suppliers, customers, landlords, creditors, merchants and other Persons having material business organizations, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (other than terminations of employees following reasonable consultation with the Purchaser) and (4) spend on user acquisition costs an amount per month (without pro-ration for partial months) per category of game (social casino or pursuant casual or mid-core free-to-play) within the percentage range set forth on Schedule 6.3(A) for such category, other than in circumstances where the Seller believes this amount would not optimize the financial performance of the Business, in which case the Seller shall seek the Purchaser’s consent to written agreements negotiated at arm's length) providing spend a lower amount for a nonsuch month. Without limiting the generality of the foregoing, during the Pre-exclusive license entered into in Closing Period, with respect to the ordinary course Company, its Subsidiaries or the Business, none of businessthe Seller, including non-exclusive, enterprise-wide the Company or site licenses.any of their respective Subsidiaries shall:
(ea) Commence any material litigation other than sell, issue or authorize the issuance of: (i) for the routine collection of bills, any capital stock or other security; (ii) for software piracy, any option or right to acquire any capital stock (or cash based on the value of capital stock) or other security; or (iii) any instrument convertible into or exchangeable for any capital stock (or cash based on the value of capital stock) or other security; or declare, accrue, set aside or pay any non-cash dividend or make any other non-cash distribution in such cases where respect of any shares of capital stock or other securities (other than the Company in good faith determines that failure Restructuring Transactions), or repurchase, redeem or otherwise reacquire any shares of capital stock or other securities (other than repurchases, redemptions or other reacquisitions for cash consideration);
(b) amend or permit the adoption of any amendment to commence suit would result in the material impairment Company’s or any of a valuable aspect of the business of its Subsidiaries’ Organizational Documents; effect or permit the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior Subsidiaries to the filing of such become a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent party to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
Acquisition Transaction (f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance transactions contemplated by this Agreement), reclassification of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stockshares, stock options split, reverse stock split or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-lawssimilar transaction; or, except as required by with respect to Big Fish Games Ireland, Limited, take or authorize any action to wind up the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets affairs of the Company or any of its Subsidiaries or terminate liquidate or dissolve;
(c) form any Subsidiary or acquire any equity interest or other interest in any other Person;
(d) make any capital expenditure, except for capital expenditures that, when added to all other capital expenditures made on behalf of the Company and its Subsidiaries during the Pre-Closing Period, do not exceed $200,000;
(e) (i) enter into any Contract that would constitute a Material Contract if in effect on the date of this Agreement; or (ii) amend, extend (other than amendments or extensions in the Ordinary Course) or prematurely terminate, or waive any contractsmaterial right or remedy under, claimsany Material Contract or any Contract that would constitute a Material Contract if in effect on the date of this Agreement;
(f) (i) acquire, lease or license any right or other asset from any other Person for an aggregate value in excess of $150,000; or (ii) sell or otherwise dispose of, or rightslease or, in each casesubject to Section 6.3(m), license (or grant any other right with respect to), any right or other asset to any other Person, except in the ordinary course case of business consistent with past practice or each of clauses (i) and (ii), in connection with existing agreements entered into between the Ordinary Course;
(g) (i) lend money to any Person (except that each of the Company and Silicon Valley Bankits Subsidiaries may make routine travel and business expense advances to their respective current employees in the Ordinary Course), which excludes any accounts receivable of the Company or any of its Subsidiaries; or (ii) incur or guarantee any Indebtedness;
(kh) Incur except to the extent required by Law or the terms of any material indebtedness for borrowed money Company Plan or as set forth on Schedule 6.3(h): (i) enter into any collective bargaining agreement; (ii) establish, adopt, amend or terminate any collective bargaining agreement or benefit plan, program, or arrangement that would be a Company Plan if it were in existence on the date of this Agreement; (iii) pay any bonus or profit-sharing payment, cash incentive payment or similar payment not required under a Company Plan; (iv) increase in any manner the amount of the wages, salary, commissions, fringe benefits or other employee benefits or compensation (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to any of its directors, officers or employees, other than ordinary course trade payables year-end increases set forth on Schedule 6.3(h); (v) promote or pursuant change the title of any of its employees (retroactively or otherwise); (vi) take any action to existing credit facilities fund any compensation obligation (whether by grantor trust or otherwise); (vii) hire or make an offer to hire any new employee or independent contractor (that is a natural person) on a full-time, part-time, consulting or other basis with annual compensation in excess of $100,000; (viii) grant or pay any change-of-control, severance, retention or termination compensation or similar benefits to, or increase in any manner the ordinary course change-of-control, severance or termination compensation or similar benefits of, any employee or Contractor of businessthe Company or any of its Subsidiaries; (ix) grant any awards under any Company Plan; (x) except as provided in Section 6.7(j), take any action to accelerate the vesting or guarantee payment of any compensation or benefit; (xi) materially change any actuarial or other assumption used to calculate funding obligations with respect to any Company Plan or materially change the manner in which contributions to any Company Plan are made or the basis on which such prohibited indebtedness contributions are determined; (xii) induce, or issue attempt to induce, any employee or sell any debt securities or warrants or rights to acquire debt securities Contractor of the Company or any of its Subsidiaries to terminate his or guarantee her employment or engagement; (xiii) amend any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount Plan that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any not a Company Scheduled Plan or increase the salaries or wage rates of any of its in a manner that disproportionately affects employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down ; (xiv) terminate the value employment of inventory, writing off notes any key employees; or accounts receivable, other than (xv) commit to take any action described in the ordinary course (i) through (xiv) of business consistent with past practice or as required by GAAP or applicable lawthis Section 6.3(h);
(ni) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt its methods of accounting or change accounting practices in any material respect any accounting method in respect of Taxes, (other than as required by GAAP);
(j) prepare or file any material Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any amendment method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods (including positions, elections or methods that would have the effect of deferring income to a material Returnperiods ending after the Closing Date or accelerating deductions to periods beginning before the Closing Date), settle or otherwise compromise any claim relating to Taxes, enter into any closing agreementagreement or similar written agreement relating to Taxes, otherwise settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money)dispute relating to Taxes, or consent request in writing any ruling or similar guidance with respect to any extension or waiver of the limitation period applicable to any claim or assessment Taxes, in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject each case to the provision of Section 203 of extent doing so would have an adverse effect on the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any Tax liability of the Company or any of its Subsidiaries is a party after the Closing Date;
(k) commence any Legal Proceeding, other than for routine collection of receivables, or, subject to Section 6.14, settle any Legal Proceeding (i) outside the Ordinary Course, (ii) that would result in any Liability in excess of (A) the amount reserved therefor or under which reflected on the Financial Statement, (B) the amount of coverage provided by any applicable insurance policy or (C) in excess of $200,000 in the aggregate with all other Legal Proceedings settled, compromised or resolved by the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to after the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction hereof or equity or debt investment in (iii) that would restrict the Company or any of its Subsidiaries’ ability to return all confidential information heretofore furnished to such Person by operate the Business in any respect or include an admission of wrongdoing on behalf the part of the Company or any of its Subsidiaries.;
(sl) Takemake any pledge of any of its assets or otherwise permit any of its assets to become subject to any Lien, except for (i) pledges of immaterial assets made in the Ordinary Course and (ii) Permitted Liens;
(i) take any action that would reasonably be expected to result in the loss, modification or alteration of any rights of the Company or any of its Subsidiaries in or to any Intellectual Property or Intellectual Property Rights or (ii) grant any exclusive license to any rights of the Company or any of its Subsidiaries in any Intellectual Property or Intellectual Property Rights;
(n) take any action that, by the terms of any Material Contract, would reasonably be expected to result in a reduction of royalties, revenue sharing, or other payments to which the Company or its Subsidiary otherwise would be entitled;
(o) close or cease or materially curtail the operations of any of the Company’s or its Subsidiaries’ game development or commercialization studios;
(p) take any action, other than in the Ordinary Course or in connection with the Restructuring Transactions, that would have materially reduced the Purchase Price if deferred revenue, deferred platform fees or deferred developer fees were included in Closing Working Capital and Working Capital Target; and
(q) agree in writing or otherwise commit to take, take any of the actions described in SECTION 6.1(A) THROUGH clauses “(R) a)” through “(p)” above. Notwithstanding the foregoing, or the Company and each of its Subsidiaries may take any action which would cause or would be reasonably likely to cause any of the conditions described in clauses “(a)” through “(q)” above to the Merger extent (i) the Purchaser gives its prior written consent to the taking of such action by the Company or its applicable Subsidiary (which consent shall not be unreasonably withheld, conditioned or delayed); (ii) such action is expressly required to be taken by this Agreement (including actions taken to effect the Restructuring Transactions); or (iii) set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedon Schedule 6.3(B).
Appears in 1 contract
Conduct of Business of the Company. During Except as contemplated or permitted by this Agreement or with the prior written consent of Parent (which consent Parent shall use its reasonable best efforts to provide or withhold within three business days of the Company’s request therefor, and which consent otherwise shall not be unreasonably withheld, delayed or conditioned) during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, or the date (if any) on which this Agreement is terminated pursuant to Section 8.01, the Company (which for the purposes of this SECTION 6.1 shall, and shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on to, (x) conduct its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use course in all commercially reasonable efforts material respects consistent with past practices practice, (y) use reasonable best efforts to maintain and policies to preserve intact its present business organizations, keep available organization and advantageous business relationships and retain the services of its present key officers and key employees and preserve (z) take no action that is intended to or would reasonably be expected to adversely affect or materially delay the ability of any party to obtain any necessary approvals of any Governmental Authority required for the transactions contemplated hereby or to perform its relationships with customerscovenants and agreements under this Agreement or to consummate the transactions contemplated hereby. Without limiting the generality of the foregoing, suppliers, distributors, licensors, licensees, and others having business dealings with during the Company or any such Subsidiaries, period from the date of this Agreement to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution date (if any) on which this Agreement is terminated pursuant to Section 8.01, except as set forth in Section 5.01 of the Company Disclosure Schedule and except as contemplated or permitted by this Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent Parent shall use its reasonable best efforts to provide or withhold within three days of the Company’s request therefor, and which consent otherwise shall not be unreasonably withheld withheld, delayed or delayedconditioned):
(a) Except as provided incur or assume any Indebtedness or assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the Indebtedness or other obligations of any other person (other than a wholly owned Subsidiary of the Company), or make or forgive any loan or advance to, any person (other than a wholly owned Subsidiary of the Company), except for (i) Indebtedness in this Agreement or as described an amount that does not exceed $10,000,000 in the Company Disclosure Schedulesaggregate, accelerate(ii) the issuance of letters of credit or surety bonds (including, amend without limitation, the issuance, increase or change the period other modification of exercisability any letters of options or restricted stock, or reprice options granted under credit issued in connection with credit enhancement for any fleet financing) required to be obtained by the Company Option Plans or authorize cash payments in exchange for any options granted under any of its Subsidiaries in the ordinary course of business consistent with past practice and (iii) fleet financing (in a principal amount not to exceed the then- outstanding principal amount of any fleet financing being replaced, modified or extended) incurred by any of Rental Car Finance Corp., Dollar Thrifty Automotive Group Canada Inc., DTGC Car Rental Limited Partnership, Dollar Thrifty Funding Corp. or TCL Funding Limited Partnership to replace, modify or extend (x) any fleet financing in place at such planstime, if such then-outstanding fleet financing would require regularly scheduled amortization payments within 180 days of the date on which such replacement, modification or extension occurs or (y) any fleet financing under which a mandatory prepayment or rapid amortization event has occurred;
(b) Enter except with respect to the Company Credit Agreement or the replacement of any fleet financing pursuant to Section 5.01(a), redeem, repurchase, defease, cancel or otherwise acquire any Indebtedness of the Company or any of its Subsidiaries (other than at stated maturity and other than the making of any required amortization payments and mandatory prepayments, in each case in accordance with the terms of the instrument or agreements, as the case may be, governing such Indebtedness as in effect on the date hereof);
(c) amend or modify the Medium Term Notes so as to delete or adversely affect any Favorable Terms therein;
(d) adjust, split, combine or reclassify any of its capital stock, voting securities or other equity interests;
(e) make, declare or pay any dividend, or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire (except for the acceptance or withholding of shares of Company Common Stock in payment of the exercise price or withholding Taxes incurred by any employee or director in connection with the exercise of options to acquire Company Common Stock or stock appreciation rights or the vesting of restricted shares or settlement of other equity-based awards in respect of Company Common Stock granted under a Company Benefit Plan), any shares of its capital stock, voting securities or other equity interests or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock, voting securities or other equity interests (in each case, except dividends paid by any wholly owned subsidiary to its parent);
(f) issue, sell, pledge, dispose of, grant or subject to any Encumbrance (other than any Permitted Encumbrance) any shares of capital stock or other securities of the Company or any of its Subsidiaries or any subscriptions, options, warrants, calls, rights, “phantom” stock rights, stock appreciation rights, stock-based performance units or other rights of any kind to acquire shares of capital stock or other securities of the Company or any of its Subsidiaries, other than (i) issuances of capital stock or other securities issuable pursuant to Company Incentive Awards granted prior to the date hereof in accordance with the terms thereof which are outstanding on the date hereof and (ii) pledges or Encumbrances of the capital stock of the Company’s Subsidiaries as required by the Company Credit Agreement;
(g) (i) except (u) for actions taken in respect of annual bonuses for the Company’s 2012 fiscal year as set forth in Section 5.01(g) of the Company Disclosure Schedule, (v) in connection with the adoption of a retention plan for employees of the Company (the “2012 DTG Retention Plan”) as set forth in Section 5.01(g) of the Company Disclosure Schedule (w) as required by applicable Law, (x) for promotions or normal performance-related merit increases in base salaries or base wages and benefit levels made in the ordinary course of business consistent with past practice (including with respect to percentage levels and frequency of increases) with respect to employees (other than those set forth in Section 5.01(g) of the Company Disclosure Schedule) or directors of any of the Company or its Subsidiaries, in an aggregate amount that does not exceed, $6,000,000 or (y) as required by the terms of any Company Benefit Plan, increase the wages or salaries of any past, present or future employee of any of the Company or its Subsidiaries, or (ii) except as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement or as modified after the date hereof to the extent permitted by Section 5.01(h), pay or provide, or increase or accelerate the accrual rate, vesting or timing of payment or funding of, any other compensation, benefits or other rights of any employee of any of the Company or its Subsidiaries (including, without limitation, any new or increased incentive compensation (cash or equity) or severance entitlement);
(h) except to the extent permitted by Section 5.01(g) in connection with the adoption of the 2012 DTG Retention Plan (i) establish, adopt or become a party to any new employee benefit or compensation plan, program, commitment or agreement or amend or terminate any Company Benefit Plan, except (A) as required by applicable Law (including any amendments to existing arrangements required to make such arrangements comply with the requirements of Section 409A of the Code so long as such amendments do not materially increase the cost to the Company) or the terms of any Company Benefit Plan as in effect on the date of this Agreement or (B) with respect to employees who are not senior executives or directors, in the ordinary course of business consistent with past practice (other than any change-in-control agreements or arrangements), (ii) establish, adopt or become a party to any new, or amend or terminate any existing, change-in-control agreement or arrangement with any employee of the Company or its Subsidiaries or (iii) enter into any material partnership arrangementscollective bargaining agreement without providing Parent prior written notice and the opportunity to review and comment on the terms of such agreement;
(i) (i) sell, joint development agreements transfer, license, lease, mortgage, encumber or strategic alliancesotherwise dispose of any properties or assets to any person, except other than (v) sales, transfers, licenses, leases, mortgages, Encumbrances or other disposals to the Company or any of its Subsidiaries, (w) sales, transfers, licenses, leases, mortgages, encumbrances or disposals of vehicles in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (iix) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
to mortgages and encumbrances, Permitted Encumbrances, (fy) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect leases of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except real property in the ordinary course of business consistent with past practice and (z) sales of properties or assets with a sale price that does not exceed $1,000,000 individually or $5,000,000 in connection with existing agreements entered the aggregate, or (ii) cancel, release or assign any claims against any person that exceed $1,000,000 individually or $5,000,000 in the aggregate;
(j) enter into between the Company and Silicon Valley Bankany new line of business or, except as required by changes in applicable Law, regulation or policies imposed by any Governmental Authority or changes made in response to market conditions, change in any material respect its current operating policies;
(k) Incur make any material indebtedness for borrowed money investment (whether by merger, consolidation, acquisition of stock or assets, joint venture or otherwise) either by purchase of stock or securities, contributions to capital or purchase of any division or business or all or any significant portion of the property or assets of any person (other than ordinary course trade payables acquisitions of the stock, securities, properties or pursuant to existing credit facilities assets not in excess of $4,000,000 individually or $6,000,000 in the ordinary course aggregate or of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities a wholly owned Subsidiary of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable lawpractice);
(nl) Except as set forth in the Company Disclosure Schedule commence or as otherwise permitted by this SECTION 6.1settle any action, pay, discharge lawsuit or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remunerationproceeding, other than (i) the paymentcommencement of any such proceedings in the ordinary course of business, discharge or satisfaction (ii) the settlement of automobile accident liability claims incurred in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (and that have not had and are not reasonably expected to have, individually or in the notes theretoaggregate, a Material Adverse Effect on the Company, and (iii) the settlement of any such proceedings or claims (x) for monetary payment of less than $5,000,000 individually and $10,000,000 in the aggregate and (y) which settlement does not impose any material restriction or obligation on the Company or any of its Affiliates (including, after the Closing, Parent and its Affiliates); 41;
(m) amend its certificate of incorporation, bylaws or other similar governing documents;
(n) except for (i) the Company Credit Agreement and (ii) with respect to any agreement, contract, lease, license, arrangement or commitment that (A) is entered into on an arm’s length basis with an unaffiliated third party, (B) is entered into in the ordinary course of business consistent with past practice, (C) would not purport on its face to bind Parent and its Subsidiaries (other than the Company and its Subsidiaries) following the Closing Date and (D) with respect to any new vehicle purchase Contract, does not have a term exceeding one year, unless such Contract may be terminated at any time after one year without payment of penalty or premium, enter into, assume or amend in any material respect, or grant any release or relinquish any material rights under, any Company Material Contract, or any other agreement, contract, lease, license, arrangement or commitment that, if entered into prior to the date hereof would constitute a Company Material Contract;
(o) Except as required by applicable Tax lawmake any capital expenditures other than (i) capital expenditures that are not purchases of vehicles and are not in excess of $3,000,000 individually or $30,000,000 in the aggregate and (ii) purchases of vehicles; provided, make or change any material election in respect that the provisions of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes clause (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; orn)(ii)(D) and clause (p) are complied with;
(p) Except place firm commitments for physical delivery of any change which vehicle from any manufacturer under any annual purchase program, unless the projected date of physical delivery of such vehicle is required by reason scheduled to occur within 120 days from the date of a concurrent change in GAAPsuch firm commitment; provided, that to the extent any manufacturer requires more than 120 days notice for the delivery of certain specialty vehicles, the Company will not, and will not permit any or its Affiliate may place firm commitments for physical delivery of its Subsidiaries to, change any method of accounting or accounting practice used by itsuch specialty vehicles without regard to such 120 day limitation;
(q) Except as otherwise permitted pursuant to SECTION 6.3adopt a plan of complete or partial liquidation, take any action to exempt dissolution, restructuring, recapitalization or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any reorganization of the Company or any of its Subsidiaries is (other than the Merger);
(r) implement or adopt any change in its Tax accounting or financial accounting principles, practices or methods, other than as may be required by applicable Law, GAAP or regulatory guidelines;
(i) make any Tax election or take any position on a party Tax Return filed on or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to after the date of this AgreementAgreement or adopt any method therein that is inconsistent with elections made, positions taken or methods used in preparing or filing similar returns in prior periods unless such position or election is pursuant to applicable Law or the Code, (ii) enter into any settlement or compromise of any Tax liability, (iii) file any amended Tax Return that would result in a confidentiality change in Tax liability, taxable income or loss, (iv) change any annual Tax accounting period, (v) enter into any closing agreement in connection with such Person's consideration relating to any Tax liability, or (vi) give or request any waiver of a possible Acquisition Transaction statute of limitation with respect to any Tax Return, provided, that such election, settlement, amended Tax Return or equity or debt investment any other action described in the foregoing portion of this Section 5.01(s) will not require prior written consent of Parent if all such actions, in the aggregate, would not reasonably be expected to result in a cost to the Company and its Subsidiaries in excess of $1,000,000;
(t) suspend or reduce the scope of their “like kind exchange”, other than to return all confidential information heretofore furnished to such Person by or on behalf of the extent necessary in the event the Company or its Subsidiaries are required to make any amortization payments or mandatory prepayments under any fleet financing, whether due to monoline insurer insolvency or otherwise;
(u) agree to take, make any commitment to take, authorize or adopt any resolutions of its Subsidiaries.
(s) Take, or agree board of directors in writing or otherwise to takesupport of, any of the actions described in SECTION 6.1(Aprohibited by this Section 5.01; or
(v) THROUGH (R) aboveexcept as contemplated by this Agreement, amend the Company Rights Agreement, redeem the Company Rights or take any action with respect to, or make any action which would cause or would be reasonably likely to cause any of determination under, the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedCompany Rights Agreement.
Appears in 1 contract
Samples: Merger Agreement (Dollar Thrifty Automotive Group Inc)
Conduct of Business of the Company. During Except as expressly contemplated by this Agreement, set forth on Schedule 4.1 or as otherwise consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), unless Parent fails to respond within five (5) calendar days of Parent’s receipt of the Company’s written request for consent, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company agrees (which for 1) to conduct its business in the purposes ordinary course in substantially the same manner as heretofore conducted, (2) to pay the debts and Taxes of this SECTION 6.1 shall include the Company and each of Company Subsidiary when due (subject to Section 4.1(h) below), (3) to use its Subsidiariescommercially reasonable efforts to pay or perform other obligations when due, (4) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)consistent with such business, to carry on use its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its the present business organizationsorganizations of the Company, (5) to use commercially reasonable efforts to keep available the services of its the present officers and key employees of the Company and each Company Subsidiary and (6) to use commercially reasonable efforts to preserve its the relationships of the Company and each Company Subsidiary with customers, customers and suppliers, distributors, licensors, licensees, and others having business dealings all with the Company or any such Subsidiaries, to the end that goal of preserving unimpaired the goodwill and ongoing businesses of the Company and each of its Subsidiaries be unimpaired at the Effective Time. Except The Company shall promptly notify Parent of any event or occurrence or emergency not in the ordinary course of business of the Company and any material event involving the Company or any Company Subsidiary that arises during the period from the date of this Agreement and continuing until the earlier of the termination date of this Agreement or the Effective Time. In addition to the foregoing, except as expressly provided for contemplated by this AgreementAgreement or required by applicable Law, and except as expressly set forth in Section 4.1 of the Credit Agreement, the Security Agreement, or the Software Distribution AgreementDisclosure Schedule, the Company shall not, and shall cause each Company Subsidiary not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld withheld, conditioned or delayed):), unless Parent fails to respond within five (5) calendar days of Parent’s receipt of the Company’s written request for consent, from and after the date of this Agreement:
(a) Except as provided in this Agreement cause or as described in permit any amendments to the articles of incorporation, bylaws or other organizational documents of the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the any Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansSubsidiary;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquireincur, or enter into other agreements any commitment to incur, expenditures exceeding $100,000 individually or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except $250,000 in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
aggregate (k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable lawpractice);
(nc) Except pay, discharge, waive or satisfy, any Indebtedness, other than required principal and interest payments as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one caseSection 4.1(c) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by itDisclosure Schedule;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Nuance Communications, Inc.)
Conduct of Business of the Company. During Except as contemplated by this Agreement or as expressly agreed to in writing by MergeCo, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company (which for the purposes of this SECTION 6.1 shall, and shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to, conduct its operations according to carry on its ordinary and usual course of business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices practice and policies use its and their respective reasonable best efforts to preserve intact its present their current business organizations, keep available the services of its present their current officers and employees and preserve its their relationships with customers, suppliers, distributors, licensors, licensees, advertisers, distributors and others having business dealings with them and to preserve goodwill. Without limiting the Company or any such Subsidiariesgenerality of the foregoing, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except except as (x) otherwise expressly provided for by in this Agreement, the Credit Agreement, the Security Agreement(y) required by Law, or (z) as set forth on Section 5.01 of the Software Distribution AgreementCompany Disclosure Schedule, prior to the Effective 41 Time, the Company shall not, and shall not permit any of cause its Subsidiaries not to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent MergeCo (which consent shall not be unreasonably withheld or delayedwithheld):
(a) Except as provided in this Agreement or as described except with respect to annual bonuses made in the Company Disclosure Schedulesordinary course of business consistent with past practice, accelerateand except as required by Law, adopt or amend in any material respect any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, pension, retirement, employment or change other employee benefit agreement, trust, plan or other arrangement for the period benefit or welfare of exercisability any director, officer or employee of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansits Subsidiaries or increase in any manner the compensation or fringe benefits of any director, officer or employee of the Company or any of its Subsidiaries or pay any benefit not required by any existing agreement or place any assets in any trust for the benefit of any director, officer or employee of the Company or any of its Subsidiaries not required by any existing agreement (in each case, except with respect to employees and directors in the ordinary course of business consistent with past practice);
(b) Enter into incur any material partnership arrangementsindebtedness for borrowed money in excess of $1,000,000 on an aggregate basis, joint development agreements other than indebtedness under existing lines of credit drawn to fund working capital (defined as current assets (excluding cash and cash equivalents) minus current liabilities, each as determined in accordance with generally acceptable accounting principles applied on a consistent basis) in the ordinary course of business and consistent with past practice;
(c) expend funds for capital expenditures (including capitalized software and lease-buybacks but other than expenditures permitted pursuant to Section 5.01(i)) that in the aggregate would cause total capital expenditure (including capitalized software and lease-buybacks but other than expenditures permitted pursuant to Section 5.01(i)) for the period from January 1, 1999 to the Effective Time to exceed an amount equal to $102,500,000;
(d) sell, lease, license, mortgage or strategic alliancesotherwise encumber or subject to any lien or otherwise dispose of any of its properties or assets other than immaterial properties or assets (or immaterial portions of properties or assets), except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstandingdeclare, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare set aside or pay any dividends on on, or make any other distributions (whether in cash, stock or property) in respect of of, any of its capital stock (except (A) as contemplated by the Rights Agreement and (B) for dividends paid by Subsidiaries to the Company with respect to capital stock), or (ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock of the Company;
or (giii) Repurchase purchase, redeem or otherwise acquire, directly or indirectly, acquire any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate any other securities thereof or waive any contractsrights, claimswarrants or options to acquire any such shares or other securities;
(f) except for issuances (i) upon exercise of presently outstanding awards under the Company Stock Plan and (ii) upon conversion of the QUIPS, (iii) of up to 50,000 Common Shares pursuant to the 401(k) Plans, or (iv) as previously disclosed in writing to MergeCo or its affiliates, authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, 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 other securities or equity equivalents (including without limitation stock appreciation rights);
(g) amend its certificate of incorporation, by-laws or equivalent organizational documents or alter through merger, liquidation, reorganization, restructuring or in each caseany other fashion the corporate structure or ownership of any material subsidiary of the Company;
(h) except as provided in Section 5.01(c), make or agree to make any acquisition of assets which is material to the Company and its Subsidiaries, taken as a whole, except for (i) purchases of inventory and supplies in the ordinary course of business consistent with past practice or in connection with existing agreements (ii) pursuant to purchase orders entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but which do not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount call for payments in excess of $100,000 5,000,000 per annum;
(i) except as previously disclosed to MergeCo in writing, acquire any business (whether by merger, consolidation, purchase of assets or otherwise) or acquire any equity interest in any one case) or $500,000 person not an affiliate (in the aggregate prior to October 1whether through a purchase of stock, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent establishment of a joint venture or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41;
(oj) Except change its principles of accounting in effect at December 31, 1998, except as required by applicable Tax lawchanges in generally accepted accounting principles or Law or regulation or as discussed in the SEC Reports, make or change any material election of its methods of reporting income and deductions for federal income tax purposes from those employed in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver the preparation of the limitation period applicable to any claim or assessment in respect federal income tax returns of Taxes; or
(p) Except the Company for any change which is the taxable year ending December 31, 1998, except as required by reason of a concurrent change changes in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(rk) Release settle or permit the release of compromise any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any shareholder derivative suits arising out of the Company transactions contemplated hereby or any of its Subsidiaries is a party other material litigation (whether or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months not commenced prior to the date of this Agreement) or settle, a confidentiality agreement pay or compromise any claims not required to be paid, other than in connection consultation and cooperation with MergeCo, and, with respect to any such Person's consideration settlement, with the prior written consent of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.MergeCo (which consent will not be unreasonably withheld);
(sl) Takeenter into or amend in a manner adverse to MergeCo any new agreement which has a non-competition, geographical restriction or similar covenant that would be material to the Company;
(m) make or rescind any material election relating to Taxes, or settle any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes; or
(n) authorize, or commit or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedforegoing actions.
Appears in 1 contract
Conduct of Business of the Company. During the period The Company hereby covenants and agrees that, from the date of this Merger Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company (which for the purposes of Company, unless otherwise expressly contemplated by this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except Merger Agreement or consented to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)by XxXxxx, to will, and will cause the Subsidiaries to, carry on its business and to cause each of its Subsidiaries to carry on its business their respective businesses only in the usualOrdinary Course of Business, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially their respective reasonable best efforts consistent with past practices and policies to preserve intact its present their business organizationsorganizations and Assets, keep available maintain their rights and franchises, retain the services of its present their officers and key employees and preserve its maintain their relationships with customers, suppliers, distributors, licensors, licensees, licensees and others having business dealings with them, and use their respective reasonable best efforts to keep in full force and effect liability insurance and bonds comparable in amount and scope of coverage to that currently maintained. Without limiting the Company or any such Subsidiariesgenerality of the foregoing, to except as otherwise expressly contemplated by this Merger Agreement, from the end that the goodwill and ongoing businesses date of Company and each of its Subsidiaries be unimpaired at this Merger Agreement until the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, Time the Company shall not, and shall not permit any of its the Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed)::
(a) Except as provided (i) increase in this Agreement any manner the compensation or as described fringe benefits of, or pay any bonus to, any director, officer or employee, except for increases or bonuses in the Company Disclosure Schedules, accelerate, amend Ordinary Course of Business to employees who are not directors or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
officers; (bii) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) other than pursuant to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past normal severance practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements existing Agreements of the Company or any Subsidiary in effect on the date of its Subsidiaries this Merger Agreement as described in Schedule 5.01(a)(ii)) to, or enter into any severance Agreement with, any director, officer or employee, or enter into any employment Agreement with any director, officer or employee; (iii) establish, adopt, enter into or amend any Plan or Other Arrangement, except as may be required to comply with applicable Law; (iv) pay any benefit not provided for under similar circumstancesany Plan or Other Arrangement; (v) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Plan or Other Arrangement (including the grant of stock options, stock appreciation rights, stock-based or stock-related awards, performance units or restricted stock, or the removal of existing restrictions in any Plan or Other Arrangement or Agreement or awards made thereunder), except for grants in the Ordinary Course of Business or as required under the Agreements set forth in Schedule 5.01(a)(v), or (vi) take any action to fund or in any other way secure the payment of compensation or benefits under any Agreement, except as required under the Agreements set forth in Schedule 5.01(a)(vi);
(db) Transferdeclare, license set aside or sell to pay any person dividend on, or entity make any other distribution in respect of, outstanding shares of capital stock;
(i) redeem, purchase or otherwise extend, amend or modify acquire any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms shares of capital stock of the Company or any Subsidiary or any securities or obligations convertible into or exchangeable for any shares of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business capital stock of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of ParentSubsidiary, or any options, warrants or conversion or other rights to acquire any shares of their affiliates, nor shall capital stock of the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on Subsidiary or make any such securities or obligations, or any other distributions securities thereof; (whether in cash, stock ii) effect any reorganization or propertyrecapitalization; or (iii) in respect of any of its capital stock, or 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 capital stock of the Company;
(g) Repurchase or otherwise acquirefor, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedulesstock;
(hd) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell award, grant or sell, or authorize or propose the issuance, delivery, award, grant or sale (including the grant of any limitations in voting rights or other Encumbrances) of, any shares of any class of its capital stock of (including shares held in treasury), any class or securities convertible intointo or exercisable or exchangeable for any such shares, or any subscriptions, rights, warrants or options to acquire, any such shares, or enter into other agreements amend or commitments otherwise modify the terms of any character obligating it such rights, warrants or options the effect of which shall be to issue make such terms more favorable to the holders thereof;
(e) except as contemplated by Agreements that have been identified in Section 3.14(a) of the Company Disclosure Schedule, acquire or agree to acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the Assets of, or by any such shares other manner, any business or any corporation, partnership, association or other convertible securitiesbusiness organization or division thereof, or otherwise acquire or agree to acquire any Assets of any other Person (other than the issuance purchase of shares assets from suppliers or vendors in the Ordinary Course of Company Stock Business);
(with Company Rights attached theretof) pursuant sell, lease, exchange, mortgage, pledge, transfer or otherwise subject to any Encumbrance or dispose of, or agree to sell, lease, exchange, mortgage, pledge, transfer or otherwise subject to any Encumbrance or dispose of, any of its Assets;
(g) adopt any amendments to its articles or certificate of incorporation, bylaws or other comparable charter or organizational documents;
(h) make or rescind any express or deemed election relating to Taxes, settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, or change any of its methods of reporting income or deductions for federal income tax purposes from those employed in the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as preparation of the date of this Agreementfederal income tax returns for the taxable year ended December 31, 1997, except in either case as may be required by Law, the IRS or GAAP;
(i) Cause, permit make or propose agree to make any amendments to new capital expenditure or expenditures which are not included in the Company's certificate 1999 capital budget, a copy of incorporation or by-lawswhich was furnished to XxXxxx, except as required by and which are, individually, in excess of $25,000 or, in the terms aggregate, in excess of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement$50,000;
(ji) Sell, lease, license, encumber or otherwise dispose of incur any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or of another Person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries or Subsidiary, guarantee any debt securities of othersanother Person, enter into any "keep well" or other Agreement to maintain any financial statement condition of another Person or enter into any Agreement having the economic effect of any of the foregoing, except for short-term borrowings incurred in each case pursuant to existing agreements entered into the Ordinary Course of Business, or (ii) make any loans, advances or capital contributions to, or investments in, any other Person other than intra-group loans, advances, capital contributions or investments between or among the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as any of the date hereofits wholly owned Subsidiaries;
(lk) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge discharge, settle or satisfy in an amount in excess of $100,000 any claims, liabilities or obligations (in any one case) whether absolute or $500,000 (in the aggregate prior to October 1contingent, 2001) matured or $200,000 (in the aggregate in any given calendar month beginning October 1unmatured, 2001known or unknown), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction satisfaction, in the ordinary course Ordinary Course of business Business or in accordance with their terms, of liabilities of the type reflected or reserved against in, or contemplated by, the most recent Financial Statement or incurred in the Company Financial Statements (Ordinary Course of Business, or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change waive any material election in respect of Taxesbenefits of, adopt or change agree to modify in any material respect respect, any accounting method in respect of Taxesconfidentiality, file any material Return standstill or similar Agreements to which the Company or any amendment to Subsidiary is a material Returnparty;
(l) except in the Ordinary Course of Business, enter into waive, release or assign any closing agreement, settle any claim rights or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money)claims, or consent modify, amend or terminate any Agreement to which the Company or any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; orSubsidiary is a party;
(pm) Except for make any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used or policy other than those required by itGAAP or a Governmental Entity;
(qn) Except as otherwise permitted pursuant to SECTION 6.3, take any action or fail to exempt take any action which could reasonably be expected to have a Company Material Adverse Effect prior to or make any person, entity after the Effective Time or action (other than Parent) not subject to an XxXxxx Material Adverse Effect after the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person fromEffective Time, or waive or permit that could reasonably be expected to adversely affect the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any ability of the Company or any of its Subsidiaries is a party Subsidiary prior to the Effective Time, or under which the Company XxXxxx or any of its Subsidiaries has any rightssubsidiaries after the Effective Time, and will use its best efforts to enforce obtain consents of third parties or cause approvals of Governmental Entities required to be enforced each such agreement at consummate the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of transactions contemplated in this Merger Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.; or
(so) Takeauthorize, or commit or agree in writing or otherwise to take, do any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedforegoing.
Appears in 1 contract
Conduct of Business of the Company. (a) During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to or the Closing, and provided that Parent complies with its terms and the Effective Timeobligations under Section 6.19, the Company (which for agrees to operate the purposes business of this SECTION 6.1 shall include the Company and each of to cause its Subsidiaries) agreessubsidiaries to conduct their respective businesses, except (i) as specifically disclosed in Section 5.1 of the Company Disclosure Schedule, (ii) with the prior written consent of Parent (which will not be unreasonably withheld, conditioned or delayed) or (iii) as specifically contemplated by this Agreement, in the ordinary course of business consistent with past practices. Without limiting the generality of the foregoing, and provided Parent complies with its obligations under Section 6.18, the Company agrees to pay and to cause its subsidiaries to pay indebtedness for borrowed money and Taxes of the Company and its subsidiaries in the ordinary course of business when due, to use reasonable efforts to pay or perform other obligations when due, and, to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)consistent therewith, to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to (x) preserve intact its the present business organizationsorganizations of the Company and its subsidiaries, (y) keep available the services of its the present officers and employees Employees of the Company and its subsidiaries and (z) preserve the Company’s and its subsidiaries’ assets and technology and to preserve the relationships of the Company and its subsidiaries with customers, suppliers, distributors, licensors, licensees, and others having business dealings with them, all with the Company or any such Subsidiaries, to the end that goal of preserving unimpaired the goodwill and ongoing businesses of the Company and each its subsidiaries.
(b) During the period from the date of its Subsidiaries be unimpaired at this Agreement and continuing until the Effective Time. Except as expressly provided for by earlier of the termination of this Agreement, the Credit Agreement, the Security Agreement, Agreement or the Software Distribution AgreementClosing, except as set forth in clauses (i) through (iii) of Section 5.1(a) or with the prior written consent of Parent (which will not be unreasonably withheld, conditioned or delayed), the Company shall not, and shall cause its subsidiaries not permit to:
(i) amend its Charter Documents or organizational documents;
(ii) issue, sell or grant any capital stock or other equity or equity‑related interest (except for issuances of its Subsidiaries toCompany Common Stock pursuant to the conversion of Company Preferred Stock in accordance with the Charter Documents or issuances of Company Capital Stock pursuant to the exercise of any Company Option or Company Warrant);
(iii) issue, sell or grant, or authorize or propose the issuance, sale or grant of any options, warrants, call rights, convertible securities, commitments or agreements of any character, written or oral, to issue, deliver, sell, or cause to be issued, delivered or sold, any capital stock or other equity interest or right to acquire any capital stock or other equity or equity‑related interest other than issuances of Company Capital Stock pursuant to the exercise of any Company Option or Company Warrant;
(iv) declare, set aside or pay any dividend or any other distribution payable in cash, stock or property or redeem, purchase or otherwise acquire directly or indirectly any shares of Company Capital Stock or split, combine or reclassify any shares of Company Capital Stock;
(v) make any capital expenditure or enter into any Contract or transaction with respect to any capital expenditure exceeding $25,000 individually or $100,000 in the aggregate;
(vi) enter into any Material Contract, amend in any material respect any such Material Contract or terminate or fail to renew (provided the Company has the sole ability to renew) any such Material Contract (or any Contract which would have been a Material Contract had such Contract been entered into prior to the Effective Time or earlier termination of this Agreement pursuant to its termsdate hereof), without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided other than, in this Agreement or as described in the Company Disclosure Scheduleseach case, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(cvii) Except terminate, fail to renew, abandon, cancel, let lapse, fail to continue to prosecute or defend, sell, transfer, exclusively license, as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstandingmay be applicable, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements otherwise dispose of the any material Company or any of its Subsidiaries under similar circumstancesIntellectual Property;
(dviii) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rightsany new, or amend, terminate or renew any existing, employment, severance, compensation, consulting or salary continuation agreements, Company Employee Plan or any other than on standard forms plan, agreement or arrangement that would be a Company Employee Plan if in effect as of the Company date hereof, with or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection benefit of bills, (ii) for software piracyany Employee, or (iii) in such cases where the Company in good faith determines that failure hire or offer to commence suit hire any employee whole annual cash compensation would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto)exceed $150,000;
(fix) Declare or pay terminate any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stockEmployees except for cause, or split, combine or reclassify encourage any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of Employees to resign from the Company;
(gx) Repurchase enter into or otherwise acquirenegotiate to enter into any collective bargaining, directly works council or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedulesother labor agreement or arrangement;
(hxi) Except as required by take any action that would result in the terms acceleration or vesting or adjustment of exercisability of any agreement between outstanding equity‑based award, including Company Options;
(xii) grant any increases in the Company and any holder of Company Series E Preferred Stock entered into on compensation, perquisites or prior to benefits (whether through the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale payment of, or agreement to pay, bonus amounts or otherwise) to any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, Employee (other than the issuance ordinary course salary increases of shares employees of Company Stock director level or below not to exceed ten percent (with Company Rights attached thereto10%) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding such employee’s salary as of the date of this AgreementAgreement and consistent with past practices);
(ixiii) Causeacquire or agree to acquire by merging or consolidating with, permit or propose by purchasing any amendments assets or equity securities of, or by any other manner, any Person or otherwise acquire or agree to the Company's certificate of incorporation or by-laws, except as required by the terms of acquire any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreementmaterial assets;
(jxiv) Sell, lease, license, encumber enter into any Contract to purchase or otherwise dispose of sell any of the properties interest in real property or assets of the Company or grant any of its Subsidiaries or terminate or waive any contracts, claims, or rights, security interest in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bankreal property;
(kxv) Incur knowingly waive or release any material indebtedness right or claim;
(xvi) except as provided in Section 6.18, incur or guarantee any Indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants guarantee any Indebtedness or rights to acquire debt securities other obligations of the Company or others;
(xvii) revalue any of its Subsidiaries assets (whether tangible or guarantee intangible), including writing off notes or accounts receivable, settle, discount or compromise any debt securities of othersaccounts receivable, except or reverse any reserves, in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases other than in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employeepractice;
(mxviii) Revalue grant any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, loans to others (other than advances to Employees for business expenses incurred in the ordinary course of business consistent with past practice business) or as required by GAAP purchase any debt securities of others or applicable lawamend the terms of any outstanding loan or agreement;
(nxix) Except as set forth in the Company Disclosure Schedule initiate or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in settle any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41litigation;
(oxx) Except as required by applicable Tax law, make or change any material election in respect of TaxesTax election, adopt or change in any material respect any Tax accounting method in respect of Taxes, file any material Return or any amendment to a material Returnmethod, enter into any closing agreementagreement or Tax ruling, settle or compromise any Tax claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment assessment, or file any material Return except as provided in respect Article VIII (including any material amended Return) unless such Return has been provided to Parent for review within a reasonable period prior to the due date for filing and Parent has consented to such filing (which consent will not be unreasonably withheld, conditioned or delayed);
(xxi) change the Company’s accounting policies or procedures except as otherwise required by GAAP;
(xxii) change or alter its treatment of Taxesdeferred revenues;
(xxiii) change or alter its cash management procedures or management of working capital outside of the ordinary course of business; or
(pxxiv) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting agree or accounting practice used by it;
(q) Except as otherwise permitted pursuant commit to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which do any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiariesforegoing.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Millennial Media Inc.)
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company agrees (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each delayed if Parent reasonably believes that any such action will not impair the value of its Subsidiaries the transactions contemplated hereby) to carry on its business in the usualordinary course in substantially the same manner as heretofore conducted, regular to pay its debts and ordinary courseTaxes when due, and to use and cause each of its Subsidiaries pay or perform other obligations when due, and, to the extent consistent with such business, to use all commercially reasonable efforts consistent with past practices practice and policies to preserve intact its present business organizationsorganization, keep available the services of its present officers and key employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, all with the Company or any such Subsidiaries, to the end that the goal of preserving unimpaired its goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. The parties hereto acknowledge that certain of such relationships may be impaired simply due to the announcement of the Merger, but the Company shall use reasonable efforts to maintain such relationships in circumstances where the Company reasonably believes the continuation of such relationship would be beneficial to the mutual business interests of Parent and the Company. The Company shall promptly notify Parent of any event or occurrence or emergency not in the ordinary course of its business (excluding activities taken in furtherance of this Agreement and the transactions contemplated hereto), and any material event involving or adversely affecting the Company or its business. Except as expressly provided for contemplated by this Agreement, Agreement or as set forth on the Credit Agreement, the Security Agreement, or the Software Distribution AgreementCompany Disclosure Schedules, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Parent:
(a) Except as provided in this Agreement Enter into any commitment, activity or as described transaction not in the Company Disclosure Schedules, accelerate, amend or change the period ordinary course of exercisability business and not specifically allowed by any other subsection of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;this Section 4.1.
(b) Enter into Transfer to any material partnership arrangements, joint development agreements person or strategic alliances, except entity any rights to any Company Intellectual Property other than nonexclusive licenses in the ordinary course of business consistent with past practicepractices;
(c) Except as required by law Enter into or amend any existing benefit plans and agreements pursuant to which any other party is granted manufacturing, marketing, distribution or similar rights of any type or scope with respect to any products of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written manufacturing agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business);
(d) Amend or otherwise modify (or agree to do so), including non-exclusiveexcept in the ordinary course of business, enterprise-wide or site licenses.violate the terms of, any of the agreements set forth or described in the Company Schedules;
(e) Commence any material litigation or any dispute resolution process other than (i) for the routine collection a breach of billsthis Agreement, (ii) for software piracya breach of the Joint Development Agreement between the Company and Parent dated as of September 26, 1996 or (iii) with respect to routine xxxx collection activities;
(f) Except as set forth in the Company Schedule 4.1(f) and for (i) the issuance of shares of Company Capital Stock upon exercise or conversion of presently outstanding Company Options or Preferred Warrants, (ii) the issuance of options granted consistent with past practice to employees hired after the date hereof, or (iii) in such cases where the repurchase of shares of Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior Capital Stock at cost pursuant to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided thatagreements listed on Company Schedule 4.1(f) declare, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) 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 stockCompany Capital Stock, or 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 capital stock of the Company;
(g) Repurchase Company Capital Stock, or repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock except as required byCompany Capital Stock (or options, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Scheduleswarrants or other rights exercisable therefor);
(hg) Except as required by for the terms issuance of any agreement between the Company and any holder shares of Company Series E Capital Stock upon exercise or conversion of presently outstanding Company Options, Preferred Stock entered into on or prior Warrants, and the issuance of options granted consistent with past practice to employees hired after the date of this Agreementhereof, issue, delivergrant, deliver or sell or authorize or propose the issuance, deliverygrant, grant delivery or sale of, or purchase or propose the purchase of, any shares of its capital stock of any class Company Capital Stock or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance ;
(h) Cause or permit any amendments to its Certificate of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights Incorporation or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this AgreementBylaws;
(i) CauseAcquire or agree to acquire by merging or consolidating with, permit or propose by purchasing any amendments to the Company's certificate of incorporation assets or by-lawsequity securities of, except as required or by the terms of any agreement between the Company and other manner, any holder of Company Series E Preferred Stock entered into on business or prior to the date of this Agreement;
(j) Sellany corporation, leasepartnership, licenseassociation or other business organization or division thereof, encumber or otherwise dispose of any of the properties acquire or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights agree to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of othersassets which are material, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (individually or in the notes thereto); 41
(o) Except as required by applicable Tax lawaggregate, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver the business of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by itCompany;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Netscape Communications Corp)
Conduct of Business of the Company. During Except as contemplated or permitted by this Agreement or with the prior written consent of Parent (which consent Parent shall use its reasonable best efforts to provide or withhold within three business days of the Company’s request therefor, and which consent otherwise shall not be unreasonably withheld, delayed or conditioned) during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, or the date (if any) on which this Agreement is terminated pursuant to Section 8.01, the Company (which for the purposes of this SECTION 6.1 shall, and shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on to, (x) conduct its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use course in all commercially reasonable efforts material respects consistent with past practices practice, (y) use reasonable best efforts to maintain and policies to preserve intact its present business organizations, keep available organization and advantageous business relationships and retain the services of its present key officers and key employees and preserve (z) take no action that is intended to or would reasonably be expected to adversely affect or materially delay the ability of any party to obtain any necessary approvals of any Governmental Authority required for the transactions contemplated hereby or to perform its relationships with customerscovenants and agreements under this Agreement or to consummate the transactions contemplated hereby. Without limiting the generality of the foregoing, suppliers, distributors, licensors, licensees, and others having business dealings with during the Company or any such Subsidiaries, period from the date of this Agreement to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution date (if any) on which this Agreement is terminated pursuant to Section 8.01, except as set forth in Section 5.01 of the Company Disclosure Schedule and except as contemplated or permitted by this Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent Parent shall use its reasonable best efforts to provide or withhold within three days of the Company’s request therefor, and which consent otherwise shall not be unreasonably withheld withheld, delayed or delayedconditioned):
(a) Except as provided in this Agreement incur or as described in assume any Indebtedness or assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the Company Disclosure Schedules, accelerate, amend Indebtedness or change other obligations of any other person (other than a wholly owned Subsidiary of the period of exercisability of options or restricted stockCompany), or reprice options granted under make or forgive any loan or advance to, any person (other than a wholly owned Subsidiary of the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliancesCompany), except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay for (i) to any executive officer or Indebtedness in an amount that does not exceed $10,000,000 in the aggregate, (ii) to the issuance of letters of credit or surety bonds (including, without limitation, the issuance, increase or other modification of any other employee except payments made (A) letters of credit issued in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (Bcredit enhancement for any fleet financing) pursuant required to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of be obtained by the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice and (iii) fleet financing (in a principal amount not to exceed the then-outstanding principal amount of any fleet financing being replaced, modified or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(kextended) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or incurred by any of its Subsidiaries Rental Car Finance Corp., Dollar Thrifty Automotive Group Canada Inc., DTGC Car Rental Limited Partnership, Dollar Thrifty Funding Corp. or guarantee TCL Funding Limited Partnership to replace, modify or extend (x) any debt securities of othersfleet financing in place at such time, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as if such then-outstanding fleet financing would require regularly scheduled amortization payments within 180 days of the date hereof;
on which such replacement, modification or extension occurs or (ly) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or fleet financing under which the Company a mandatory prepayment or any of its Subsidiaries rapid amortization event has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.occurred;
Appears in 1 contract
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company agrees (which for the purposes of this SECTION 6.1 shall include unless the Company and each of is required to take such action pursuant to this Agreement or Acquirer shall give its Subsidiaries) agrees, except to the extent that Parent shall otherwise prior consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries writing) to carry on its business in the usual, regular and ordinary coursecourse consistent with past practice, to pay its Liabilities and Taxes consistent with the Company’s past practices (and in any event when due), to use pay or perform other obligations when due consistent with the Company’s past practices (other than Liabilities, Taxes and cause each of its Subsidiaries other obligations, if any, contested in good faith through appropriate proceedings), and, to the extent consistent with such business, to use all commercially reasonable efforts consistent with past practices and institute all policies reasonably required to preserve intact its present business organizationsorganization, preserve and maintain the value of its assets, keep available the services of its present officers and key employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, independent contractors and others other Persons having business dealings with it, all with the Company or any such Subsidiaries, to the end that the express purpose and intent of preserving unimpaired its goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for contemplated by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3Acquirer, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any action that would make any of its representations or warranties contained in this Agreement untrue or incorrect in any material respect or prevent the actions described in SECTION 6.1(A) THROUGH (R) above, Company from performing or any action which would cause the Company not to perform its agreements and covenants hereunder or would be reasonably likely to knowingly cause any of the conditions condition to the Merger set forth Acquirer’s closing obligations in SECTIONS 7.1 OR 7.3, Section 8.1 or Section 8.3 not to be satisfied.. Without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, (i) the Company shall cause its officers to report regularly to Acquirer concerning the status of the Company’s business and notify Acquirer of any materially negative event known to the Company involving or adversely affecting the Company or its businesses, and (ii) except as set forth in the Disclosure Schedule or as required or expressly permitted by this Agreement, the Company shall not do, cause or permit any of the following, without the prior written consent of Acquirer, which consent will not be unreasonably withheld or delayed:
Appears in 1 contract
Samples: Merger Agreement (Sigma Designs Inc)
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective Time, the Company (which for agrees to operate the purposes business of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agreessubsidiaries, except to the extent that Parent shall otherwise consent in writing (which writing, such consent shall or refusal to consent not to be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary coursecourse in substantially the same manner as heretofore conducted, to pay the debts and to use Taxes of the Company and cause each of its Subsidiaries subsidiaries when due, to pay or perform other obligations when due, and, to the extent not inconsistent with such business, to use all commercially reasonable efforts consistent with past practices and policies to preserve intact the Company’s and its subsidiaries’ present business organizations, keep available the services of the Company’s and its subsidiaries’ present officers and employees key employees, and preserve the Company’s and its subsidiaries’ relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it. In furtherance of the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreementforegoing, the Company shall notagrees that it will book invoices and make accruals promptly upon receipt, that it will pay its accounts payable on a timely basis in accordance with past practices, and shall not permit any of its Subsidiaries to, prior that it will continue to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except purchase and replenish inventory and maintain inventory levels in the ordinary course of business consistent with past practicepractices. Except as expressly contemplated by this Agreement or as set forth in Section 4.1 of the Disclosure Schedule or to comply with applicable laws and regulations or pre-existing contractual obligations contained in contracts disclosed on the Disclosure Schedule as in effect on the date hereof, neither the Company nor any of its subsidiaries shall, without the prior written consent of Parent, such consent or refusal to consent not to be unreasonably delayed:
(a) enter into any material transaction except in the ordinary course of business as conducted on that date and consistent with past practices;
(cb) Except as required by law cause or permit any existing benefit plans and agreements amendments or changes to the certificate of incorporation, bylaws or other organizational documents of the Company or any of its Subsidiaries, grant any severance or termination pay subsidiaries;
(c) make (i) to any executive officer capital expenditures or enter into any commitment therefor exceeding $25,000 individually or $50,000 in the aggregate, or (ii) to any other employee except payments made expenditure, commitment or transaction exceeding $25,000 individually or $50,000 in the aggregate other than, in the case of this clause (A) ii), in connection with the termination ordinary course of employees who are not executive officers in amounts business consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstancespractices;
(d) Transferchange the Company’s accounting policies or procedures (including any change in reserves for excess or obsolete inventory, license doubtful accounts or sell other reserves, or depreciation or amortization policies or rates or payment or collection policies or practices);
(e) make or change any material election in respect of Taxes, adopt or change any accounting method in respect of Taxes, enter into any closing agreement, settle any claim or assessment in respect of Taxes, or consent to any person extension or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms waiver of the Company limitation period applicable to any claim or assessment in respect of Taxes;
(f) revalue any of its assets or any of its Subsidiaries subsidiaries’ assets (whether tangible or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into intangible), including without limitation writing down or up the value of inventory or writing off notes or accounts receivable, settling, discounting or compromising any accounts receivable, or reversing any reserves other than in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults and consistent with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto)past practice;
(fg) Declare 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 stockCompany Capital Stock, or 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 capital stock of the Company;
(g) Repurchase Company Capital Stock, or repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock Company Capital Stock (or options, warrants or other rights exercisable therefor) except as required by, and in accordance with, any with the agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the evidencing Company Disclosure SchedulesOptions;
(h) Except as required increase the salary or other compensation payable or to become payable by the Company to any of its officers, directors, employees or advisors, or declare, pay or commit or obligate the Company in any way to the payment of a severance payment, termination payment, bonus or other additional salary or compensation to any such person;
(i) enter into any Contract or terminate, extend, amend, waive or modify the terms of any agreement between Contract;
(j) amend or otherwise modify (or agree to do so), or violate the Company and terms of, any holder of Company Series E Preferred Stock entered into on the agreements set forth or prior described in the Disclosure Schedule;
(k) commence or settle any lawsuit, proceeding or other investigation, other than to enforce its rights under this Agreement or for the date routine collection of bills;
(l) except as otherwise expressly contemplated by this Agreement, issue, delivergrant, deliver or sell or authorize or propose the issuance, deliverygrant, grant delivery or sale of, or purchase or propose the purchase of, any shares of its capital stock of the Company or its subsidiaries or any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue or purchase any such shares or other convertible securities, securities (other than the issuance of shares any issuances of Company Common Stock (with Company Rights attached thereto) pursuant to the exercise exercises of Company Rights Options or Company Series E Preferred Stock, stock options Warrants in accordance with their terms) or warrants outstanding as amend the terms of the date of this AgreementOption Exchange Program;
(im) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sellsell, lease, license, encumber license or otherwise dispose of any of the its properties or assets assets, including without limitation the sale of any accounts receivable of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each casesubsidiaries, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices); create any security interest in such assets; modify, amend or terminate any existing lease, license or contract affecting the use, possession or operation of any such properties or assets or waive term or condition thereof or grant any consents thereunder; grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge affecting any owned property or leased property or any part thereof; convey, assign, sublease, license or otherwise transfer all or any portion of any owned property or leased property or any interest or rights therein; commit any waste or nuisance on any such property; or make any material changes in the construction or condition of any such property;
(n) grant any loan to any person or entity, incur any indebtedness, guarantee any indebtedness, issue or sell any debt securities or guarantee any debt securities of others, except for trade payables and advances to employees for travel and business expenses, in each case in the ordinary course of business consistent with past practices;
(o) waive or release any material right or claim, including but not limited to (but without limiting the generality of the foregoing)write-off, the adoption discount or amendment other compromise of any stock account receivable;
(p) enter into or amend any marketing, distribution, joint venture, strategic alliance development or any similar arrangement or agreement;
(q) request that any vendor or service provider hold or delay any invoices or billing statements or fail to purchase or option planreplenish inventory in the ordinary course of business;
(r) (i) sell, the entering license or transfer to any person or entity any rights to any Company Intellectual Property or enter into any agreement with respect to any Company Intellectual Property with any person or entity or with respect to any Intellectual Property Rights of any employment contract person or entity other than in the ordinary course of business, (ii) buy or in-license any Intellectual Property Rights or enter into any agreement with respect to the Intellectual Property Rights of any person or entity other than ordinary course shrink wrap software agreements for internal operations, (iii) enter into any agreement with respect to the development of any Intellectual Property Rights with a third party, (iv) or change pricing or royalties charged by the Company to its customers or licensees, or the payment pricing or royalties set or charged by persons who have licensed Intellectual Property Rights to the Company or any of its subsidiaries;
(s) acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or equity securities of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the Company’s or any of its subsidiaries’ businesses;
(t) grant any severance or termination pay (in cash or otherwise) to any Employee, including any officer, except payments made pursuant to written agreements outstanding on the date hereof and disclosed in the Disclosure Schedule;
(u) except as otherwise expressly contemplated by this Agreement, adopt or amend any Company Employee Plan, enter into any employment contract, pay or agree to pay any special bonus or special remuneration to any director or employeeEmployee, or increase the salaries, wage rates, or other compensation of its Employees except payments made pursuant to standard written agreements outstanding on the date hereof and disclosed in the Disclosure Schedule;
(mv) Revalue take any action to accelerate the vesting schedule of the assets of any Assumed Options;
(w) unless otherwise instructed by Parent, hire or terminate any salaried employees, or knowingly encourage any salaried employees to resign from the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable lawsubsidiaries;
(nx) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Taketake, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(ASections 4.1(a) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedthrough 4.1(w).
Appears in 1 contract
Samples: Merger Agreement (Polycom Inc)
Conduct of Business of the Company. During Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Disclosure Schedule, unless Parent shall otherwise consent in writing (such consent not to be unreasonably withheld or delayed), during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company (which for and each Subsidiary will conduct its respective operations, to the purposes extent commercially reasonable, according to its ordinary and usual course of this SECTION 6.1 shall include business and consistent with past practice, and the Company and each of Subsidiary will use its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve substantially intact its present respective business organizations, to keep available the services of its present respective officers and employees and preserve its to maintain satisfactory relationships with customers, suppliers, distributors, licensors, licensees, suppliers, contractors, distributors, physicians, consultants, customers, and others having material business dealings relationships with it. The Company will promptly advise Parent of any material change in the management, present or planned business, properties, liabilities, results of operations, or financial condition of the Company or any such Subsidiariesmaterial Subsidiary. The Company will, prior to distributing or otherwise circulating any notices, directives, or other communications directed to all or groups of customers, vendors, employees, distributors, or others associated with its business relating to the end that transactions contemplated hereby or to the goodwill operation of business after consummation of such transactions, consult with Parent and ongoing businesses give Parent reasonable opportunity to comment thereon. Without limiting the generality of the foregoing, and except as otherwise expressly provided in or contemplated by this Agreement or as set forth in Section 5.1 of the Company and each Disclosure Schedule, from the date of its Subsidiaries be unimpaired at the Agreement until the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, neither the Company shall not, and shall not permit nor any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its termsSubsidiary will, without the prior written consent of Parent (which such consent shall not to be unreasonably withheld or delayed):
(a) Except as provided in this Agreement amend its Certificate of Incorporation or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansBylaws;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing authorize for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreementissuance, issue, deliversell, sell pledge, or authorize deliver (whether through the issuance or propose the issuancegranting of additional options, deliverywarrants, grant commitments, subscriptions, rights to purchase, or sale of, otherwise) any shares of its capital stock of any class or any securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments shares of stock of any character obligating it to issue any such shares or other convertible securities, class (other than the issuance of shares of Company Common Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of on the date of this Agreement);
(ic) Causesplit, permit combine, or propose reclassify any amendments to the Company's certificate shares of incorporation its capital stock, declare, set aside, or by-lawspay any dividend or other distribution (whether in cash, except as required by the terms stock, or property or any combination thereof) in respect of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on its capital stock; or prior to the date of this Agreement;
(j) Sell, lease, license, encumber redeem or otherwise dispose of acquire any of the properties or assets of the Company or any shares of its Subsidiaries capital stock or terminate its other securities; or waive any contracts, claims, amend or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur alter any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates term of any of its employees outstanding securities;
(except for wage increases d) other than indebtedness incurred in the ordinary course of business and consistent with past practices)practice and other than intercompany indebtedness, including but not limited create, incur or assume any indebtedness for borrowed money, or assume, guarantee, endorse, or otherwise agree to (but without limiting become liable or responsible for the generality of the foregoing), the adoption or amendment obligations of any stock purchase other person, or option planmake any loans, advances or capital contributions to, or investments in, any other person; or create, incur or assume any material Lien on any material asset;
(i) increase in any manner the entering into compensation of any employment contract of its directors, officers, employees, or consultants, or accelerate the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiariessuch compensation, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than except in each case in the ordinary course of business and consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract annual year end increases and accelerated payments customarily made upon termination of employment) or consistent with respect to any bonus existing contractual commitments or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make ; (ii) pay or change any material election in respect of Taxes, adopt accelerate or change otherwise modify in any material respect the payment, vesting, exercisability, or other feature or requirement of any accounting method in respect pension, retirement allowance, severance, change of Taxescontrol, file stock option, or other employee benefit not required by any material Return or any amendment to a material Returnexisting plan, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent arrangement to any extension such director, officer, employee or waiver of the limitation period applicable to any claim or assessment in respect of Taxesconsultant; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Samples: Merger Agreement (Medtronic Inc)
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective Time, the Company (which for agrees, unless otherwise required pursuant to the purposes express terms of this SECTION 6.1 shall include the Company and each of Agreement or if Parent has given its Subsidiaries) agrees, except to the extent that Parent shall otherwise prior consent in writing (which consent shall not be unreasonably withheld or delayedwithheld), to carry on its business on, and to cause each of its Subsidiaries Company Subsidiary to carry on on, its business in the usual, regular and ordinary coursecourse of business, to pay, and to use and cause each Company Subsidiary to pay, its Liabilities and Taxes when due in the usual, regular and ordinary course of business, to pay or perform and to cause each Company Subsidiary to pay or perform its Subsidiaries other obligations when due in the usual, regular and ordinary course of business (other than Liabilities, Taxes and other obligations, if any, contested in good faith through appropriate proceedings), and to use all commercially use, and to cause each Company Subsidiary to use, reasonable efforts consistent with past practices and policies to preserve intact its present business organizationsorganization, keep available the services of its present officers and key employees and preserve its relationships with customerskey providers, subscribers, suppliers, distributors, licensors, licensees, independent contractors and others other Persons having business dealings with the Company or any such and/or the Company Subsidiaries, to and maintain the end that Company's and the Company Subsidiaries' respective Permits and Approvals, all with the express purpose and intent of preserving unimpaired the Company's and each Company Subsidiary's goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at business through the Effective Time. Except as otherwise expressly provided for permitted by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, neither the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its termsnor either Company Subsidiary shall, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(Cwithheld), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, take any action that would make any of the actions described Company's representations or warranties contained in SECTION 6.1(A) THROUGH (R) abovethis Agreement to be untrue or incorrect or prevent the Company from performing, or any action which would cause the Company not to perform, its agreements and covenants hereunder or would be reasonably likely to knowingly cause any of the conditions condition to the Merger set forth Parent's closing obligations in SECTIONS Section 7.1 OR 7.3, or Section 7.3 not to be satisfied.. Without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, except as required or expressly permitted by this Agreement, neither the Company nor any Company Subsidiary shall cause or permit any of the following with respect to the Company or any Company Subsidiary, without the prior written consent of Parent (which consent shall (i) not be unreasonably withheld, except in the case of those matters set forth in subsections (e) and (v) below, with respect to which Parent may grant or deny consent in its sole and absolute discretion, and (ii) be granted as promptly as reasonably practicable, and in any event within two Business Days, or such shorter period as may be warranted due to exigent circumstances):
(a) cause or permit any amendments to its certificate of incorporation or by-laws (or comparable organizational documents);
Appears in 1 contract
Conduct of Business of the Company. During the period from (a) From the date of this Agreement and continuing until hereof through the earlier of the termination of this Agreement pursuant to its terms and the Effective TimeClosing Date, the Company (which for the purposes of this SECTION 6.1 shall include agrees, and agrees to cause each Subsidiary, and Sellers agree to cause the Company and each of its SubsidiariesSubsidiary:
(i) agrees, except To conduct their operations according to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business ordinary and to cause each usual course of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts Business consistent with past practices and policies practice, to preserve intact its their present business organizationsorganization and structure, to use reasonable efforts to keep available the services of its their present officers officers, agents and employees full-time employees, to use reasonable efforts to preserve and maintain their Assets and the good will of the Business and to use reasonable efforts to preserve its their relationships with customers, customers and suppliers, distributors, licensors, licensees, and others having business dealings with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):them.
(aii) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except To maintain in the ordinary course of business the Business, consistent with past practice;practice and in accordance with all Contracts, the Real Property, all their material structures, equipment, rides and other tangible property in their present repair, order and condition, subject to ordinary wear and tear.
(ciii) Except as required by law or Not to incur any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay Liability (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into Liabilities incurred in the ordinary course of businessthe Business, including non-exclusiveconsistent with past practice, enterprise-wide or site licenseswhich are not in the aggregate material thereto), nor enter into any Contract of a type required to be included in any Schedule hereto.
(eiv) Commence Not to incur any material litigation Company Debt, other than pursuant to the Revolving Credit Facility.
(iv) for Not to redeem or purchase from the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect holders of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, Preferred Stock any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;Preferred Stock.
(hvi) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior Not to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options undertake (nor permit to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached theretobe undertaken) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, actions specified in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;Section 2.11.
(kvii) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant Not to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 any material Claim or Liability (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, including without limitation, under any employment contract or with respect Liabilities referred to any bonus or special remunerationin Section 1.2(d)(ii)-(iv), inclusive), other than the payment, discharge or satisfaction in the ordinary course of business the Business of liabilities of the type reflected Claims or reserved against Liabilities incurred in the Company Financial Statements (or in the notes thereto); 41ordinary course of Business, consistent with past practice.
(ob) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely From the date hereof through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAPClosing Date, the Company and Sellers agree that the affairs of the Company and each Subsidiary will notbe conducted in such a manner so that the representations and warranties of the Company and Sellers contained herein shall continue to be true and correct on and as of the Closing Date as if made on and as of the Closing Date.
(c) From the date hereof through the Closing Date, the Company and Sellers agree that the Company and its Subsidiaries will consult with Buyer prior to any renewal, amendment, extension or termination of, waiver of any material right under, or any failure to renew, any Contract and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any such action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement if Buyer objects thereto in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiarieswriting.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective Time, except for those matters set forth in Schedule 4.1 of the Company (which for the purposes Stockholder Disclosure Letter, each of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, WW agrees and the Stockholder agrees to cause the Company and WW (except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), writing) to carry on its business and to cause each of its Subsidiaries to carry on its business the Business in the usual, regular and ordinary coursecourse in substantially the same manner as heretofore conducted, to pay the debts and Taxes of the Company, WW and the Subsidiaries when due, to use and cause each of its Subsidiaries pay or perform other obligations when due, and, to the extent consistent with the Business, to use all commercially reasonable efforts consistent with past practices practice and policies to preserve intact its present business organizationsorganization, keep available the services of its present officers and key employees and preserve its their relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, all with the Company or any such Subsidiaries, to the end that the goal of preserving unimpaired its goodwill and ongoing businesses as of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for contemplated by this Agreement, neither the Credit AgreementCompany, WW nor any Subsidiary will, nor will the Security AgreementStockholder permit the Company, WW or the Software Distribution Agreement, the Company shall not, and shall not permit any of its the Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Parent:
(a) Except Enter into any commitment, activity or transaction that would have been an exception to the representations or warranties set forth in Section 2.7, had such commitment, activity or transaction occurred on or after March 31, 2000, June 30, 2000 or August 31, 2000, as provided in the case may be, and prior to the date of this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansAgreement;
(b) Transfer or license to the Stockholder or any of its subsidiaries (other than the Company, WW or any of the Subsidiaries) any rights to any Company Intellectual Property or any other asset (other than cash (except for the Liberty Digital Proceeds) and assets as of the date hereof of National Home Connection, MetroRent or Getko Canada) or enter into any agreement with respect to Company Intellectual Property or any other asset (other than assets relating to National Home Connection) with Stockholder or its subsidiaries (other than the Company, WW and the Subsidiaries);
(c) Transfer to the Stockholder or any of its subsidiaries (other than the Company, WW or any of the Subsidiaries) any employee engaged in the Business;
(d) Hire or terminate any employees other than for cause or encourage any employees to resign from the Company, WW or any Subsidiary;
(e) Enter into or amend any material partnership arrangementsagreement pursuant to which any party is granted marketing, joint distribution, development or similar rights of any type or scope which includes any provision granting any person a right of first refusal, right of first negotiation or exclusive, "most favored nation" or preferential placement or other preferential rights, except for agreements regarding sponsorship or strategic alliancesthe sale of advertising to third parties for placement on the Company's website with no payment or other obligations on the part of the Company or any Subsidiary outside the ordinary course of business and that are terminable within sixty (60) days without penalty;
(f) Adversely amend or otherwise modify (or agree to do so), except in the ordinary course of business consistent with past practicebusiness, or violate the material terms of, any agreement set forth or described in the Stockholder Disclosure Letter;
(cg) Except as required by law Commence or settle any existing benefit plans and agreements litigation involving claims or payments in excess of $100,000 or which seeks equitable relief; provided, however, that this restriction shall not apply to the Company or any commencement of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into litigation regarding accounts receivable in the ordinary course of business, including non-exclusive, enterprise-wide business or site licenses.
(e) Commence any material other litigation other than (i) for relating to the routine collection ordinary course enforcement of bills, contractual rights generally or (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment any litigation regarding a breach of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto)this Agreement;
(fh) Declare 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, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase , WW or any Subsidiary, or repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by(or options, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Scheduleswarrants or other rights exercisable therefor);
(hi) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior Issue, sell, grant, contract to the date of this Agreement, issue, delivergrant or sell, sell or authorize or propose the issuance, delivery, grant sale or sale of, purchase of any shares of its capital stock of any class Company Capital Stock or securities convertible into, or any subscriptionsexercisable or exchangeable for, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Capital Stock, stock or any securities, warrants, options or warrants outstanding as rights to purchase any of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreementforegoing;
(j) Cause or permit any amendments to its Certificate of Incorporation or Bylaws;
(k) Acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or equity securities of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire or divest any assets which are material, individually or in the aggregate, to the Business;
(l) Sell, lease, license, encumber license or otherwise dispose of any of the assets or properties or assets of the Company Company, WW or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, Subsidiary except in the ordinary course of business consistent with past practice practices or create any security interest in connection with existing agreements entered into between the Company and Silicon Valley Banksuch assets or properties;
(km) Incur Grant any material loan to any person or entity, incur any indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or indebtedness, issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or securities, guarantee any debt securities of others, purchase any debt securities of others or amend the terms of any outstanding agreements related to borrowed money, except for advances to employees for travel and business expenses in each case the ordinary course of business consistent with past practices;
(n) Grant any severance or termination pay (i) to any director or officer or (ii) to any employee or consultant, except payments made pursuant to existing standard written agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder outstanding as of the date hereof;
hereof and disclosed on Schedule 4.1(n) of the Stockholder Disclosure Letter, or increase in the salary or other compensation payable or to become payable by Company or any of their respective Subsidiaries to any of their officers, directors, employees or advisors other than increases made in the ordinary course of business consistent with past practices and in no event in excess of ten percent (l10%) Except as required of such individual's base salary, or declare, pay or make any commitment or obligation of any kind for the payment by law the Company, WW or permitted by SECTION 6.1(C)any of their respective Subsidiaries of a bonus or other additional salary or compensation to any such person other than bonuses or additional salary or compensation paid in the ordinary course of business consistent with past practices, or adopt or amend any Company Scheduled Plan employee benefit plan or increase the salaries or wage rates of enter into any employment contract;
(o) Revalue any of its employees (except for wage increases assets, including writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employeepractice;
(mp) Revalue Other than the acceleration of not more than twenty-five percent (25%) of the shares underlying Company Options (or acceleration of such greater amount as disclosed in the Employment Agreements set forth on Schedule 4.1(p)) outstanding as of the date hereof in connection with the transactions contemplated by this Agreement, take any action to accelerate the vesting schedule of any of the assets of the outstanding Company Options, Company Capital Stock or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable lawWW Capital Stock;
(nq) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, payPay, discharge or satisfy satisfy, in an amount in excess of $100,000 (in any one case) or $500,000 250,000 (in the aggregate prior to October 1, 2001aggregate) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41liabilities;
(or) Except as required by applicable Tax law, make Make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, agreement or settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(qs) Except as otherwise permitted pursuant to SECTION 6.3, take Enter into any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 agreement of the Delaware Law type described in Section 2.12 hereof except, with respect to 2.12(a)(xvii), for agreements regarding sponsorship or any the sale of advertising to third parties for placement on the Company's website with no payment or other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit obligations on the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any part of the Company or any Subsidiary outside the ordinary course of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rightsbusiness and that are terminable within sixty (60) days without penalty and, with respect to 2.12(a)(xix), for agreements that are cancelable without penalty within thirty (30) days and will use its best efforts to enforce or cause to be enforced each for which, if such agreement at is in effect after the request Closing, (i) Stockholder shall be the sole obligor under such agreement after the Closing and (ii) Parent has no liability after the Closing under the agreement, by operation of Parent. The Company will also promptly request each Person that has executedlaw or otherwise;
(t) Fail to pay or otherwise satisfy its monetary obligations as they become due, within 12 months prior to except such as are being contested in good faith;
(u) Cancel, materially amend or renew any insurance policy other than in the date ordinary course of business;
(v) Except as contemplated by this Agreement, a confidentiality agreement alter, or enter into any commitment to alter, its interest in connection with such Person's consideration of a possible Acquisition Transaction any corporation, association, joint venture, partnership or equity or debt investment business entity in which the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company Company, WW or any of its Subsidiaries.Subsidiary directly or indirectly holds any interest on the date hereof; or
(sw) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(ASections 4.1(a) THROUGH through (Rv) above, or any other action which that would prevent the Company, WW or the Subsidiaries from performing or cause the Company, WW or would the Subsidiaries not to perform its covenants hereunder. Notwithstanding the foregoing, Stockholder will cause the transfer prior to the Closing, and shall be reasonably likely permitted without receiving the prior written consent of Parent to cause any transfer, out of the conditions to Company the Merger business of National Home Connections, LLC, Getko Canada and MetroRent and the employees set forth in SECTIONS 7.1 OR 7.3on Schedule 4.1(x), not such that neither the Company, WW nor any Subsidiary has any Liabilities with respect to be satisfiedsuch business or employees following the Closing.
Appears in 1 contract
Samples: Merger Agreement (Cendant Corp)
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company agrees (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), writing) to carry on its business and to cause each of its Subsidiaries to carry on its Subsidiary’s business in the usual, regular and ordinary coursecourse in substantially the same manner as heretofore conducted, to pay its and Subsidiary’s debts and Taxes when due, to use and cause each of its Subsidiaries pay or perform other obligations when due, and, to the extent consistent with such business, to use all commercially reasonable efforts consistent with past practices practice and policies to preserve intact its and Subsidiary’s present business organizationsorganization, keep available the services of its and Subsidiary’s present officers and key employees and preserve its their relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it and Subsidiary, all with the Company or any such Subsidiaries, to the end that the goal of preserving unimpaired its and Subsidiary’s goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except The Company shall promptly notify Parent of any material event involving or adversely affecting the Company, Subsidiary or their business. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement and the Effective Time, except as expressly provided for contemplated by this Agreement, Agreement or as set forth on Section 4.1 of the Credit Agreement, the Security Agreement, or the Software Distribution AgreementCompany Disclosure Schedule, the Company shall not, and nor shall not it permit any of its Subsidiaries Subsidiary to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Parent:
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangementscommitment, joint development agreements activity or strategic alliances, except transaction (including making any capital expenditure or entering in to a commitment to make any capital expenditure) (i) not in the ordinary course of business consistent with past practicebusiness, (ii) which involves more than $250,000 individually or $1,000,000 in the aggregate or (iii) which has a term longer than one year;
(ci) Except as required by law or any existing benefit plans and agreements for the granting of non-exclusive licenses of object code relating to the sale of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, ’s products shipping on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including nonsell, license or transfer to any person or entity any rights to any Company Intellectual Property or enter into any agreement with respect to any Company Intellectual Property with any person or entity or with respect to any Intellectual Property of any person or entity, (ii) buy or license any Intellectual Property or enter into any agreement with respect to the Intellectual Property of any person or entity, (iii) enter into any agreement with respect to the development of any Intellectual Property with a third party, (iv) or change pricing or royalties charged by the Company to its customers or licensees, or the pricing or royalties set or charged by persons who have licensed Intellectual Property to the Company;
(c) Terminate any employees other than for cause or encourage any employees to resign from the Company or hire any employee other than pursuant to (i) the hiring of replacement employees pursuant to Section 6.3(o) hereof or (ii) the plan set forth on Schedule 4.1(c);
(d) Enter into any bandwidth or co-exclusive, enterprise-wide or site licenses.location agreement with a term of longer than six months;
(e) Commence any material litigation other than Amend or otherwise modify (i) for the routine collection of bills, (ii) for software piracyor agree to do so), or (iii) violate the terms of, any of the agreements set forth or described in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto)Schedules;
(f) Declare Commence or settle any litigation;
(g) 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, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase , or repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock (or options, warrants or other rights exercisable therefor) except as required by, and for (i) repurchases of Company Capital Stock upon the termination of service of any service providers of Company in accordance with, any agreements existing as of with the date hereof and as standard terms set forth on SECTION 6.1(Gin the agreements governing such repurchases, all of which agreements have been provided or made available to Parent, (ii) conversion of the Company Disclosure SchedulesPreferred Stock and (iii) exercises or conversion of Company Convertible Securities;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior Issue, sell, grant, contract to the date of this Agreement, issue, delivergrant or sell, sell or authorize or propose the issuance, delivery, grant sale or sale of, purchase of any shares of its capital stock of any class Company Capital Stock or securities convertible into, or any subscriptionsexercisable or exchangeable for, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock Capital Stock, or any securities, warrants, options or rights to purchase any of the foregoing, except for (with Company Rights attached theretoi) pursuant to the exercise issuances of Company Rights Capital Stock upon exercise or conversion of Company Convertible Securities or Company Series E Preferred Stock, stock options or warrants Stock outstanding as of the date of this Agreement;
, (iii) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder issuances of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except Options in the ordinary course of business consistent with past practice practice; provided, however, that in no event shall the Company issue Company Options (A) to purchase more than 50,000 shares (in any one case) or 250,000 shares (in the aggregate), (B) with an exercise price of less than 90% of (x) the average closing price of Parent Common Stock on the NASDAQ stock market for the ten days prior to the grant divided by the (y) Exchange Ratio calculated as of such date or (C) which do not vest on the Company’s standard four-year vesting schedule, with no vesting occurring prior to the first anniversary of the date of grant, and (iii) issuances of up to 250,000 shares of Company Common Stock as contemplated by Section 5.6 below;
(i) Cause or permit any amendments to its Certificate of Incorporation or Bylaws or other organizational documents or change the composition of the Board of Directors of the Company or Subsidiary;
(j) Acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or equity securities of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in connection with existing agreements entered into between the Company and Silicon Valley Bankaggregate, to the business of the Company;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables Sell, lease, license or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates otherwise dispose of any of its employees (except for wage increases the assets or properties of Company which are not Company Intellectual Property other than in the ordinary course of business and consistent with past practices), including but not limited or create any security interest on any property or assets;
(l) Grant any loan to (but without limiting any person or entity, incur any indebtedness or guarantee any indebtedness, issue or sell any debt securities, guarantee any debt securities of others, purchase any debt securities of others or amend the generality of the foregoing), the adoption or amendment terms of any stock purchase or option planoutstanding agreements related to borrowed money, except for advances to employees for travel and business expenses in the entering into ordinary course of any employment contract or the payment of any special bonus or special remuneration to any director or employeebusiness consistent with past practices;
(m) Grant any severance or termination pay (i) to any director or officer or (ii) to any employee or consultant, except in each case for payments made pursuant to written agreements in effect as of the date hereof and disclosed on Schedule 4.1(m), or increase in the salary or other compensation payable or to become payable by Company to any of its officers, directors, or employees or declare, pay or make any commitment or obligation of any kind for the payment by Company of a bonus or other additional salary or compensation to any such person, or adopt or amend any employee benefit plan or enter into any employment contract;
(n) Revalue any of the assets of the Company or any of its Subsidiariesassets, including without limitation writing down the value of inventory, inventory or writing off notes or accounts receivable, receivable other than in the ordinary course of business and consistent with past practice or as required by GAAP or applicable lawpractice;
(no) Except as set forth in Take any action to accelerate the vesting schedule of any of the outstanding Company Options or Company Capital Stock or amend, modify or waive any term or provision of any stock restriction or repurchase agreement to which the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, payis party;
(p) Pay, discharge or satisfy satisfy, in an amount in excess of $100,000 (in any one case) 25,000 individually or $500,000 (100,000 in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41Statements;
(oq) Except as required by applicable Tax law, make Make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money)Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release Enter into any strategic alliance, joint development or permit joint marketing arrangement or agreement;
(s) Fail to pay or otherwise satisfy its monetary obligations as they become due, except such as are being contested in good faith;
(t) Waive or commit to waive any rights with a value in excess of $25,000 individually or $100,000 in the release aggregate;
(u) Cancel, materially amend or renew any insurance policy other than in the ordinary course of any Person frombusiness;
(v) Alter, or waive enter into any commitment to alter, its interest in any corporation, association, joint venture, partnership or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under business entity in which the Company directly or indirectly holds any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to interest on the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.hereof; or
(sw) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(ASections 4.1(a) THROUGH through (Rv) above, or any other action which that would prevent the Company from performing or cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, Company not to be satisfiedperform its covenants hereunder.
Appears in 1 contract
Conduct of Business of the Company. During the period from the date of this Agreement Date and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, :
(a) the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on conduct its business and to cause each of its Subsidiaries to carry on its business solely in the usual, regular and ordinary course, 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 to use and cause each in compliance with all applicable Legal Requirements;
(b) the Company shall (i) pay all of its Subsidiaries debts and all Taxes when due, subject to good faith disputes over such debts or Taxes, (ii) pay or perform its other obligations when due, (iii) use all commercially reasonable efforts consistent with past practice and policies to collect accounts receivable when due and not extend credit outside of the ordinary course of business consistent with past practices, (iv) sell Company Products consistent with past practices as to license, service and maintenance terms, incentive programs, and in accordance with GAAP requirements as to revenue recognition and (v) use its commercially reasonable efforts consistent with past practice and policies to preserve intact its present business organizations, keep available the services of its present officers and key employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company or any such Subsidiariesit, to the end that the its goodwill and ongoing businesses of Company and each of its Subsidiaries shall be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, Closing;
(c) the Company shall notpromptly notify the Acquirer of any change, and shall occurrence or event not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstandingbusiness, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stockchange, occurrence or splitevent which, combine individually or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person fromchanges, or waive or permit the waiver of any provision ofoccurrences and events, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to would reasonably be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely expected to cause any of the conditions to the Merger closing set forth in SECTIONS 7.1 OR 7.3, Article 8 not to be satisfied;
(d) the Company shall assure that each of its Contracts (other than with Acquirer) entered into after the Agreement Date will not require the procurement of any consent, waiver or novation or provide for any change in the obligations of any party in connection with, or terminate as a result of the consummation of, the Merger, and shall give reasonable advance notice to Acquirer prior to allowing any Material Contract to lapse or terminate by its terms.
Appears in 1 contract
Samples: Merger Agreement (Identiv, Inc.)
Conduct of Business of the Company. (a) During the period from the date of this Agreement Date and continuing until the earlier of the termination of this Agreement pursuant to its terms and Section 9.1 or the Effective TimeClosing Date, the Company agrees (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent expressly contemplated by this Agreement or as consented to in writing (by Purchaser, which consent shall will not be unreasonably withheld withheld, conditioned or delayed), ): (i) to carry on its business and to cause each of its Subsidiaries to carry on its business the Company Business in the usual, usual regular and ordinary course, course in substantially the same manner as heretofore conducted; (ii) to pay the debts and Taxes of the Acquired Companies when due subject to use any good faith disputes over such debts or Taxes; (iii) to pay or perform other obligations when due; and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies (iv) to preserve intact its the present business organizationsorganizations of the Acquired Companies, keep available the services of its the present officers and employees of the Acquired Companies and preserve its the rights, franchises, goodwill and relationships of the Acquired Companies with employees, customers, suppliers, distributors, licensors, licensees, regulators and others having business dealings with the Company or any such SubsidiariesAcquired Companies.
(b) Without limiting the foregoing, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except except as expressly provided for contemplated by this Agreement, the Credit Agreement, the Security Agreement, Agreement or the Software Distribution AgreementCompany Disclosure Schedule, during the Company shall not, period from the Agreement Date and shall not permit any continuing until the earlier of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its termsSection 9.1 or the Closing Date none of the Acquired Companies shall, or shall cause or permit any of the following, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.Purchaser:
Appears in 1 contract
Conduct of Business of the Company. During (a) Except as (i) expressly provided by this Agreement, (ii) set forth in Section 7.1(a) of the Company Disclosure Schedules, or (iii) required by any applicable Law, during the period from the date of this Agreement and continuing until to the earlier of the Closing Date and the termination of this Agreement pursuant to its terms and the Effective Timein accordance with Article 10, the Company shall, and shall cause the Company Subsidiaries to, (which for A) conduct their respective business and operations in the purposes ordinary course consistent with past practice in all material respects (including with respect to the issuance of this SECTION 6.1 shall include letters of credit and bonds), (B) use commercially reasonable efforts to preserve substantially intact the business organization and material assets of the Company and each of its the Company Subsidiaries; (C) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizations, keep available the services of its present the Company’s and the Company Subsidiaries’ current officers and employees key employees; (D) use commercially reasonable efforts to preserve the current relationships of the Company and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings the Company Subsidiaries with the Material Customers and Material Suppliers; (E) use commercially reasonable efforts to keep and maintain the Company and the Company Subsidiaries’ assets and properties in good repair and normal operating condition, wear and tear excepted; (F) use commercially reasonable efforts to make capital expenditures in accordance with the Capital Expenditures Budget attached to Section 7.1 of the Company Disclosure Schedules; and (G) not take or omit to take any such Subsidiariesaction which would result in a Material Adverse Effect.
(b) Without limiting the forgoing, during the period from the date of this Agreement to the end that earlier of the goodwill Closing Date and ongoing businesses the termination of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except this Agreement in accordance with Article 10, except as (A) otherwise expressly provided for permitted by this Agreement, (B) set forth on Section 7.1(b) of the Credit Agreement, the Security AgreementCompany Disclosure Schedules, or the Software Distribution Agreement(C) required by any applicable Law, the Company shall not, not (and shall cause the Company Subsidiaries not permit to) undertake any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, following actions without the prior written consent of Parent (the Buyer, which consent in the cases of clauses (xi)(A), (xii), (xiii), (xv), (xvi), (xvii), (xviii) and (xx) shall not be unreasonably withheld withheld, conditioned or delayed)::
(i) fail to maintain books of account and records consistent with past practice;
(ii) issue, sell or pledge, or authorize or propose the issuance, sale or pledge of (A) additional equity interests of any class of the Company (including the Company Common Units) or any Company Subsidiary, or securities convertible into or exchangeable for any such equity interests, or any rights, warrants or options to acquire any such equity interests or other convertible securities of the Company or any Company Subsidiary or (B) any other securities in respect of, in lieu of, or in substitution for the equity interests of the Company (including the Company Common Units) or any Company Subsidiary outstanding on the date hereof;
(iii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation or other reorganization of the Company or any Company Subsidiary, or otherwise alter the Company’s or any Company Subsidiary’s corporate structure;
(iv) redeem, repurchase or otherwise acquire any outstanding equity interests of the Company or any Company Subsidiary; provided, that nothing in this Agreement shall restrict the Company from declaring and paying any cash dividend or making any other cash distribution to the Seller prior to the Adjustment Time to the extent such cash was not generated from a breach of any of the Specified Provisions;
(v) commence, settle or compromise any Action that results, or would reasonably be expected to result, in a liability or loss to the Company or any Company Subsidiary of more than $500,000;
(vi) cancel or waive any claims or rights with a value to the Company or any Company Subsidiary in excess of $250,000;
(vii) permit the lapse, cancellation or termination of any Insurance Policy, unless the Company or such Company Subsidiary has timely obtained a comparable replacement thereof;
(viii) (A) sell, assign or transfer all or any material portion of the Owned Intellectual Property, (B) grant or agree to grant any IP Licenses except for non-exclusive licenses granted in the ordinary course of business, (C) abandon or cease to prosecute or maintain any of the material Owned Intellectual Property, other than in the ordinary course of business or (D) disclose any material trade secrets used in the business to any third party that is not subject to a confidentiality obligation with respect thereto;
(ix) make any capital expenditures or enter into any contract or commitment for capital expenditures in excess of $250,000 in respect of any such individual contract or commitment or $500,000 in the aggregate, in each case other than as contemplated by the Capital Expenditures Budget, or enter into capital leases if it would cause total capitalized lease obligations to exceed $20,000,000;
(x) adopt any amendment to the limited liability company agreement, or equivalent organizational documents, of the Company or any Company Subsidiary;
(xi) (A) incur any Indebtedness of the type described in (a) Except as provided in this Agreement or as described (b) thereof, other than pursuant to the Existing Credit Facility or (B) issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for the obligations of any Person (other than the Company or any Company Subsidiary in the Company Disclosure Schedules, accelerate, amend or change the period ordinary course of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansbusiness);
(bxii) Enter enter into any material partnership arrangementsletter of credit, joint development agreements other than as credit support for (A) insurance, (B) bonding or strategic alliances(C) projects with respect to which such letter of credit is security for performance by the Company or any Company Subsidiary;
(xiii) subject any of the Company’s or any Company Subsidiaries’ properties or assets to any Encumbrance, except for Permitted Encumbrances;
(xiv) accelerate the collection of or discount any accounts receivable, delay the payment of accounts payable or deferred expenses, reduce inventories, increase customer deposits or otherwise reduce other assets or increase liabilities, in each case for the purpose of increasing cash and cash equivalents, except in the ordinary course of business consistent with past practice;
(ci) Except except as consistent with past practices solely with respect to employees that are not directors or officers, increase in any material manner the rate or terms of compensation or benefits of any of its directors, officers, employees, or individual service providers except as may be required under any material Company Plan or collective bargaining agreement, (ii) pay or agree to pay any material pension or retirement allowance or other employee benefit not contemplated by any Company Plan to any current or former director or officer, whether past or present, other than as required by law Law, (iii) enter into, adopt or materially amend any collective bargaining agreement other than as required by Law, (iv) enter into, adopt or materially amend any employment, bonus, severance, retention, or retirement contract with any officer or any existing employee or adopt any employee benefit plans plan, in each case other than (1) as required by Law, (2) as would not materially increase the costs and agreements expenses to the Company of sponsoring, maintaining, administering or contributing to the employee benefit plan, (3) with respect to contracts for positions that are open as of the Company date hereof, (4) to replace individuals who are terminated for cause or who voluntarily retire or resign in the ordinary course of business or (5) as would be included in Transaction Expenses, subject to the limitations set forth in the definition thereof, or (v) fund (or secure the payment of) or take any action to accelerate in any material respect the vesting, funding or payment of any compensation, incentive arrangements, retention, transaction bonus, change in control, or other benefits or severance or any other form of its Subsidiariesseparation payment, grant of any severance current or termination pay (i) to any executive officer former employee, director, or (ii) to any individual service provider other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) than pursuant to written agreements outstanding, or policies existing, contracts in existence on the date hereof and as previously disclosed disclosure in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstancesBuyer;
(dxvi) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice practice, sell, lease, assign, transfer or otherwise dispose of, any of its tangible property or assets in connection with existing agreements entered into between excess of $100,000 in the Company and Silicon Valley Bankaggregate;
(kxvii) Incur make any material indebtedness for borrowed money loans, advances or capital contributions, except (other than ordinary course trade payables i) loans, advances or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of capital contributions from the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant a Company Subsidiary to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any another Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases Subsidiary in the ordinary course of business or (ii) advances for travel and consistent with past practices)other normal business expenses to directors, including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than officers and employees in the ordinary course of business consistent with past practice or as required by GAAP or applicable lawpractice;
(nxviii) Except as set forth materially amend, waive in any material respect, become subject to (except for each Material Contract that is a construction contract with an unaffiliated customer which is proposed to be or is entered into in the ordinary course of business and does not exceed a value of $75,000,000), or terminate (except for any termination upon expiration in accordance with the terms of such Material Contract or Lease) any Material Contract or any Lease or consent to the termination of the Company’s or any of the Company Disclosure Schedule Subsidiaries’ rights thereunder (except for any termination upon expiration in accordance with the terms of such Material Contract or Lease);
(xix) implement any employee layoffs or facility closures that could require notice under the WARN Act;
(xx) except in the ordinary course of business consistent with past practice, acquire any operating business or Person, by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions;
(xxi) change the independent accountants of the Company or any Company Subsidiary or make any change in any method of accounting or auditing practice other than those required by applicable Law or GAAP;
(xxii) enter into any contract, agreement or transaction with an Affiliate that would be binding after Closing, other than (i) with the Company or any Company Subsidiary and (ii) subject to providing written notice to the Buyer promptly after entry thereof, contracts, agreements or transactions with portfolio companies of Oaktree Capital Management, L.P. or its Affiliates (x) that are entered into in the ordinary course of business on arms-length terms, and (y) are for products or services in quantities and at costs that the Company or such Company Subsidiary, as the case may be, would have obtained from a third party on similar terms;
(xxiii) except where otherwise permitted required by this SECTION 6.1applicable Law, paymake or change any Tax election, discharge file any amended Tax Return, adopt or satisfy in change any Tax accounting method or change any Tax accounting period, or settle any Tax claim(s) or assessment(s) relating to the Company or any Company Subsidiary for an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (individually or in the notes thereto); 41
(o) Except as required by applicable Tax lawaggregate, make or change surrender any material election in respect right to claim a refund of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation limitations period applicable to any Tax claim or assessment relating to any Company Subsidiary, fail to pay any Tax that became due and payable (including estimated tax payments), or prepare or file a Tax Return in respect of Taxesa manner inconsistent with past practice; or
(pxxiv) Except for agree in writing to take any change of the foregoing actions. Notwithstanding anything to the contrary contained herein, nothing contained in this Agreement (A) will give Buyer, Merger Sub I or Merger Sub II LLC, directly or indirectly, rights to control or direct the business or operations of the Company and the Company Subsidiaries prior to the Closing or (B) will operate to prevent or restrict any act or omission by the Company or the Company Subsidiaries the taking of which is required by reason of a concurrent change in GAAPapplicable Law. Prior to the Closing, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which will exercise, consistent with the Company or any of its Subsidiaries has any rights, terms and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date conditions of this Agreement, a confidentiality agreement in connection with such Person's consideration control of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiariestheir business and operations.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Samples: Agreement and Plan of Merger (M III Acquisition Corp.)
Conduct of Business of the Company. During The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the Company (which for prior written consent of Parent, conduct its business in the purposes ordinary course of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agreesbusiness consistent with past practice, except and, to the extent that Parent consistent therewith, the Company shall, and shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on to, use its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable best efforts consistent with past practices and policies to preserve substantially intact its present and its Subsidiaries’ business organizationsorganization, to keep available the services of its present and its Subsidiaries’ current officers and employees and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees, licensees and others other Persons having business dealings relationships with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at Subsidiaries. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time. Except , except as expressly provided for required by applicable Law, the transactions contemplated by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreementtransactions contemplated by the Term Loan and Security Agreement dated as of even date herewith between the Company, Parent and certain of the Company’s Subsidiaries, the Company shall not, and nor shall not it permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent; provided that, with respect to actions to be taken pursuant to and in accordance with the terms and conditions of the Company Preferred Stock or the Warrants, the prior written consent of Parent (which consent shall not be unreasonably withheld so that the Company can comply with the terms of the same:
(i) amend or delayed):propose to amend its Charter Documents;
(ii) issue, deliver, sell, pledge or encumber, or authorize, propose or agree to the issuance, delivery, sale, pledge or encumbrance of, any Company Securities (other than shares of Company Stock pursuant to the terms of any outstanding Company Stock Options);
(iii) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to, or enter into any Contract with respect to the voting of, any of its capital stock;
(iv) reclassify, combine, split, subdivide or redeem, repurchase or otherwise acquire, directly or indirectly, any Company Securities;
(v) acquire (including by merger, consolidation, or acquisition of stock or assets) or make any investment in any Equity Interest in any Person or any assets, loans or debt securities thereof, acquire or divest any Real Property Leases or other interest in real estate or enter into or amend or modify any material Contract, partnership, arrangement, joint development agreement or strategic alliance;
(vi) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person (other than any wholly-owned Subsidiary of it) or enter into any arrangement having the economic effect of any of the foregoing;
(vii) grant any Lien on any of its material assets to secure any indebtedness for borrowed money;
(viii) enter into any new line of business outside of its existing business;
(ix) pay, discharge, settle or satisfy any Liabilities, other than (i) performance of contractual obligations in accordance with their terms, or (ii) payment, discharge, settlement or satisfaction in accordance with the terms of Liabilities that have been (a) Except as provided disclosed in this Agreement the most recent Company Financial Statements (or as described the notes thereto) included in the Company Disclosure Schedules, accelerate, amend Securities Filings filed prior to the date hereof or change contemplated by documents made available to Parent prior to the period of exercisability of options date hereof or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except incurred since the date of such financial statements in the ordinary course of business consistent with past practice;
(cx) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) adopt or enter into grants to future patent rightsa plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other than on standard forms reorganization of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect theretoMerger);
(fxi) Declare institute, settle or pay compromise any dividends Legal Actions pending or threatened before any arbitrator, court or other Governmental Entity, other than (A) any Legal Action brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub, and (B) the settlement of claims, Liabilities or obligations reserved against on or make any other distributions (whether the most recent balance sheet of the Company included in cashthe Company Securities Filings, stock or property) in respect of amounts not to exceed those so reserved; provided that neither the Company nor any of its capital stock, Subsidiaries shall settle or split, combine agree to settle any Legal Action which settlement involves a conduct remedy or reclassify any of its capital stock injunctive or issue similar relief or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of has a restrictive impact on the Company’s business;
(gxii) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, leasetransfer, license, encumber sell, lease or otherwise dispose of any material assets (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other Equity Interests in any Subsidiary of the properties Company, provided that the foregoing shall not prohibit the Company and its Subsidiaries from transferring, licensing, selling, leasing or disposing of obsolete equipment or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rightsbeing replaced, in each case, except case in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bankpractice;
(kxiii) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax lawLaw, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Tax Return or any amendment to a material Tax Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or;
(pxiv) Except for make any change which is required by reason of a concurrent material change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of financial accounting principles or accounting practice used practices, in each case except for any such change required by ita change in GAAP or applicable Law;
(qxv) Except except as otherwise permitted pursuant to SECTION 6.3, take required by applicable Law or by any action to exempt Company Employee Plan or make any person, entity or action (other than Parent) not subject to the provision of Section 203 Contract in effect as of the Delaware Law date of this Agreement, (i) increase the compensation payable or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of that could become payable by the Company or any of its Subsidiaries is a party to directors, officers or under which the Company employees, (ii) enter into any new, or amend in any material respect any existing, employment, severance, retention or change in control agreement with any of its Subsidiaries has past or present officers or employees, (iii) promote any rightsofficers or employees, and will use its best efforts except as the result of the termination or resignation of any officer or employee, or (iv) establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to enforce accelerate rights under any Company Employee Plans or cause to any plan, agreement, program, policy, trust, fund or other arrangement that would be enforced each such agreement at the request a Company Employee Plan if it were in existence as of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement or make any contribution to any Company Employee Plan, other than contributions required by Law, the terms of such Company Employee Plans as in effect on the date hereof or that are made in the ordinary course of business consistent with past practice;
(xvi) except in connection with such Person's consideration actions permitted by Section 6.4 hereof, take any action to exempt any Person from, or make any acquisition of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf securities of the Company by any Person not subject to, any state takeover statute or similar statute or regulation that applies to the Company with respect to a Takeover Proposal or otherwise, including the restrictions on “business combinations” set forth in the BCA, except for Parent, Merger Sub or any of its Subsidiaries.their respective Subsidiaries or Affiliates, or the transactions contemplated by this Agreement;
(sxvii) Take, incur any material Liability except in the ordinary course of business consistent with past practice; or
(xviii) commit or agree in writing or otherwise to take, take any of the actions described in SECTION 6.1(ASections 6.1.1(i) THROUGH (Rthrough 6.1.1(xvii) above, above or any action which would cause or would reasonably be reasonably likely expected to cause result in any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, Article 7 not to be being satisfied.
Appears in 1 contract
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant or the Closing, subject to its terms and the Effective Timelimitations set forth below, the Company (which for the purposes of this SECTION 6.1 shall include the Company agrees as to itself and each of its Subsidiaries) agrees, Subsidiaries (except to the extent that Parent shall otherwise consent in writing (writing, which consent shall not be unreasonably withheld or delayed), to carry on its without a business and to cause each of its Subsidiaries justification) to carry on its business in the usual, regular and ordinary coursecourse consistent with past practice, to pay its debts and Taxes when due (including without limitation the making of cash distributions for the payment of Taxes to the Sellers in a manner consistent with past practices), to pay or perform its other material obligations when due, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizationsorganization, keep available the services of its present officers and key employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, distributors and others other Persons having business dealings with it. The Company has delivered concurrently herewith its capital improvement expenditures budget (the “Budget”), including a detailed description of all capital improvement expenditures for the Horseshoe Casino Hammond pavilion renovation, the Horseshoe Casino Hammond parking garage development (together, the “Hammond Expansion Project”) and other planned capital improvement expenditures at Bossier Casino, Xxxxxxx Casino and Tunica Casino (together, the “Casino Properties”). The Company shall use commercially reasonable efforts to make in all material respects the capital expenditures reflected in the Budget, subject to the reasonable judgment of the Company or any such Subsidiaries, to after consultation with Parent. Without limiting the end that generality of the goodwill foregoing and ongoing businesses of Company as an extension thereof and each of its Subsidiaries be unimpaired at the Effective Time. Except except as (i) expressly provided for contemplated by this Agreement, the Credit Agreement, the Security Agreement, Agreement or the Software Distribution Agreement, (ii) disclosed on Section 6.1 of the Company shall notDisclosure Letter, during the period from the date of this Agreement and shall not permit any continuing until the earlier of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its termsor the Closing, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):without a business justification), the Company shall not and shall not permit any of its Subsidiaries to:
(ai) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or otherwise change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansits Organizational Documents;
(bii) Enter into (A) issue, sell, pledge, dispose of, grant, transfer, encumber or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of any material partnership arrangementsshares of its capital stock of, joint development agreements or strategic alliancesother Equity Interests in, except in the ordinary course of business consistent with past practice;
(c) Except as required by law Company or any existing benefit plans and agreements Subsidiary of the Company of any class, or securities convertible or exchangeable or exercisable for any shares of such capital stock or other Equity Interests, or any options, phantom stock, stock appreciation rights, stock based performance units, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities of the Company or any Subsidiary of the Company, other than in connection with the vesting or exercise of Options or SARs issued prior to the date hereof or (B) amend, waive or otherwise modify any of the terms of any employee option, warrant or stock option plan of the Company or any of its Subsidiaries, grant including without limitation, the Options, SARs or the Company Equity Plans, other than any severance such amendments, waivers or termination pay modifications with respect to Options, SARs (ior stock option plans in connection with such Options or SARs) to any executive officer or warrants which shall be cancelled at the Closing;
(iiiii) to any other employee except payments made (A) declare, set aside, make or pay any dividend, distribution, (whether payable in connection with cash, securities or property or any combination thereof), contribution, loan or any other payment out of the termination ordinary course of employees who are not executive officers business in amounts consistent with the Company's policies and past practices respect of any class or series of its capital stock or (B) pursuant enter into any agreement with respect to written agreements outstandingthe voting of its capital stock or any Equity Interests held by the Company or any Subsidiary of the Company; provided, however, that the Company may take the actions prohibited by subclause (A) if such dividend, distribution, contribution, loan or policies existingpayment would not violate the terms of any note, on the date hereof and as previously disclosed in writing bond, mortgage, indenture, lease, contract or other agreement, instrument or obligation to Parent or (C) pursuant to written agreements consistent with the past agreements of which the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license is a party or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or by which any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, them or any of their affiliates, nor shall the Company properties or assets may be required to consult with Parent with respect thereto)bound;
(fiv) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine combine, subdivide or reclassify any of its capital stock reclassify, or issue or authorize the issuance of any other securities Equity Interests in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase its Capital Stock or otherwise acquire, directly or indirectlyother Equity Interests, any shares of its capital stock, or any of its other Equity Interests;
(v) increase the compensation or benefits payable or to become payable to its directors, officers or employees (whether from the Company or any of its Subsidiaries), or pay any benefit not required by any existing plan or arrangement (including, without limitation, the granting of stock except as required byoptions, and in accordance stock appreciation rights, shares of restricted stock or performance units) or grant any rights to severance, retention or termination pay to or enter into any employment or severance agreement with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on director, officer or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets employee of the Company or any of its Subsidiaries or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, savings, welfare, deferred compensation, employment, termination, severance or other employee benefit plan, agreement, trust, fund, policy or arrangement for the benefit or welfare of any directors, officers or current or former employees, including any Benefit Arrangement, Pension Plan or Welfare Plan, except (A) to the extent required by applicable Law, (B) pursuant to any Company Benefit Plans as in effect on the date of this Agreement consistent with past practices, (C) for salary and other benefit increases (other than those set forth in (D) below which are governed by (D)), grants, payments or modifications in the ordinary course of business consistent with past practice to employees other than officers of the Company, (D) bonuses, severance benefits or other similar payments paid in full by the Company prior to the Closing Date, (E) extensions of employment agreements on substantially similar terms for up to six months at a time (with normal increases consistent with past practices) with respect to employees other than officers of the Company, provided that such employment agreements terminate upon the Closing and do not give rise to payment or benefit obligations which are not satisfied in full by the Company prior to the Closing, (F) with respect to any such salary and other benefits increases, grants, payments or modifications which terminate at, and are paid in full by the Company prior to, the Closing or (G) amendments to employment, non-compete, severance and termination or other similar agreements as necessary to clarify that any employee of the Company presently bound by a non-compete covenant that survives post-Closing would continue to be bound only in respect of those casino properties owned by the Company immediately prior to the Closing Date to which such employee’s present non-compete covenant is tied;
(vi) (A) sell, pledge, transfer, lease, dispose of, grant, encumber, or otherwise authorize the sale, pledge, lease, transfer, disposition, grant or Encumbrance of any of the properties or assets (including without limitation Intellectual Property) of the Company or any of its Subsidiaries with a fair market value in excess of $50,000, except for sales of current assets in the ordinary course of business and consistent with past practice, (B) acquire (i) any corporation, partnership, other business organization or any division thereof, or a substantial portion of the assets thereof (including, without limitation, by merger, consolidation, lease or acquisition of stock or assets) or (ii) any other assets outside of the ordinary course of business, or (C) enter into any other commitment, transaction, agreement, contract or instrument outside the ordinary course of business consistent with past practices;
(vii) (A) incur or assume any Indebtedness, except as will be repaid in full prior to or at the Closing by the Company, (B) accelerate or delay collection of notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice, (C) delay or accelerate in any material respect payment of any account payable in advance of its due date or the date such liability would have been paid in the ordinary course of business consistent with past practice, (D) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except in the ordinary course of business consistent with past practice, (E) vary the Company’s inventory practices in any material respect from the Company’s past practices, or (F) except as required to do so pursuant to any written agreements in existence on the date of this Agreement, make or authorize any loans, advances or capital contributions to, or investments in, any other Person (including advances to employees) except in the ordinary course of business consistent with past practice; provided, each of the Company and its Subsidiaries shall be permitted to loan, advance, contribute or invest any of its cash or cash equivalents in any Person in the ordinary course of business consistent with past practice so long as such loan, advance, capital contribution or investment does not directly or indirectly materially interfere with, and is not materially detrimental to, the operation of the business of the Company and its Subsidiaries;
(viii) (A) make or rescind any material election relating to Taxes (other than an election by Bossier Corp. pursuant to Section 1361(b)(3)(B) of the Code), (B) settle or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, or (C) except as may be required by applicable Law, make any change to any of its material methods of reporting income or deductions for Federal Income Tax purposes from those employed in the preparation of its Federal income Tax Return for the taxable years ending December 31, 2001 and 2002;
(ix) pay, discharge or satisfy any material claims or Liabilities (absolute, accrued, asserted, unasserted, contingent or otherwise), other than in the ordinary course of business and consistent with past practice of Liabilities reflected or reserved against in the consolidated financial statements of the Company;
(x) other than in the ordinary course of business and consistent with past practice, waive any rights with respect to, or make any payment of any material Liability (other than Indebtedness permitted by paragraph (vii) above) of the Company or of any of its Subsidiaries before the same comes due in accordance with its terms, other than any Liability which the Sellers would have been required to bear at the Closing;
(xi) fail to maintain its existing insurance coverage in all material respects of all types in effect as of the date hereof; provided, however, in the event any such coverage shall be terminated or lapse, to the extent available at reasonable cost, the Company or any of its Subsidiaries may procure substantially similar substitute insurance policies which in all material respects are in at least such amounts and against such risks as are currently covered by such policies;
(xii) enter into any collective bargaining agreement or any successor collective bargaining agreement;
(xiii) make any change with respect to accounting policies or procedures, other than required by GAAP or any Governmental Entity, or in the ordinary course of business and consistent with past practice;
(xiv) other than as otherwise permitted in this Section 6.1, cancel, terminate or waive adversely modify or amend any contractsof the Company Material Contracts, or waive, release, assign, settle or compromise any material rights or claims, or rightsany material litigation or arbitration;
(xv) take, or agree to commit to take, any action that would make any representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Closing so as to cause the conditions to Parent to consummate the transactions contemplated herein not to be satisfied;
(xvi) write up, write down or write off the book value of any assets of the Company and its Subsidiaries, in each caseexcess of $2,000,000 in the aggregate, except in the ordinary course of business consistent with past practice or and for depreciation and amortization in connection accordance with existing agreements entered into between the Company and Silicon Valley BankGAAP consistently applied;
(kxvii) Incur make or authorize any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities capital expenditure in the ordinary course excess of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases set forth in the ordinary course of business and consistent with past practicesBudget or, without double counting, on Schedule 1.3(a)(iii), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than repairs and maintenance in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as practice; provided, however, that it shall not make any capital expenditure otherwise permitted by this SECTION 6.1Section 6.1(xvii) if such capital expenditure would violate the terms of any note, paybond, discharge mortgage, indenture, lease, contract or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1other agreement, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability instrument or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under by which the Company any of them or any of its Subsidiaries has any rights, and will use its best efforts to enforce their properties or cause to assets may be enforced each such agreement at bound;
(xviii) substantially change the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement manner in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in which it administers the Company to return all confidential information heretofore furnished to such Person by Benefit Plans or on behalf make any changes that would materially impact the cost of administration of the Company or any of its Subsidiaries.Benefit Plans; or
(sxix) Takeenter into an agreement, contract, commitment or agree in writing or otherwise arrangement to take, do any of the actions described in SECTION 6.1(A) THROUGH (R) aboveforegoing, or any action which would cause to authorize or would be reasonably likely announce an intention to cause do any of the conditions foregoing. Notwithstanding anything herein to the Merger set forth contrary in SECTIONS 7.1 OR 7.3this Section 6.1, not the Company shall be permitted to be satisfiedmake cash distributions to the Sellers for Taxes to the fullest extent permitted under the 8.625% Indenture and to establish reserves therefor.
Appears in 1 contract
Samples: Stock Purchase Agreement (Harrahs Entertainment Inc)
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of agrees to conduct its Subsidiaries) agreesbusiness, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld withheld, conditioned or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary coursecourse in substantially the same manner as heretofore conducted, to pay the debts and Taxes of the Company when due (subject to Section 4.1(f) 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, use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizations, keep available the services of its the present officers and key employees of the Company and preserve its the relationships of the Company with customers, suppliers, distributors, licensors, licensees, and others having business dealings with them, all with the Company or any such Subsidiaries, to the end that goal of preserving unimpaired the goodwill and ongoing businesses of the Company and each of its Subsidiaries be unimpaired at the Effective Time. Except The Company shall promptly notify Parent of any event or occurrence or emergency not in the ordinary course of business of the Company and any material event involving the Company that arises during the period from the date of this Agreement and continuing until the earlier of the termination date of this Agreement or the Effective Time. In addition to the foregoing, except as expressly provided for contemplated by this AgreementAgreement or required by applicable law, and except as expressly set forth in Section 4.1 of the Credit Agreement, the Security Agreement, or the Software Distribution AgreementDisclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld withheld, conditioned or delayed):), from and after the date of this Agreement:
(a) Except as provided cause or permit any amendments to the certificate of incorporation, bylaws (or, in this Agreement respect of SNAPin Software UK Limited, memorandum and articles of association) or as described in other organizational documents of the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the any Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansSubsidiary;
(b) Enter incur any expenditures or enter into any commitment or transaction exceeding $50,000 individually or $200,000 in the aggregate or any commitment or transaction of the type described in Section 2.10 hereof (other than in the ordinary course of business consistent with past practice);
(c) pay, discharge, waive or satisfy, any indebtedness for borrowed money;
(d) except in the ordinary course of business consistent with past practice, pay, discharge, waive or satisfy, any third party expense in an amount in excess of $50,000 in any one case, or $200,000 in the aggregate, or any other claim, liability, right or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than with respect to such other claim, liability right or obligation, the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the Current Balance Sheet;
(e) adopt or change accounting methods or practices (including any change in depreciation or amortization policies) other than as required by GAAP;
(f) make or change any material partnership arrangementsTax election, joint development agreements adopt or strategic allianceschange any Tax accounting method, except enter into any closing agreement with respect to Taxes, settle or compromise any Tax claim or assessment, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment or file any material Tax Return or any amended Tax Return unless a copy of such Tax Return has been delivered to Parent for review a reasonable time prior to filing and Parent has approved such Tax Return;
(g) revalue any of its assets (whether tangible or intangible), including without limitation writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
(ch) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiariesdeclare, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstandingset aside, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stockCompany Capital Stock, or 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 capital stock of the Company;
(g) Repurchase Company Capital Stock, or repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock Company Capital Stock (or options, warrants or other rights exercisable therefor);
(i) Except as set forth in Section 4.1(i) of the Disclosure Schedule, increase the salary or other compensation payable or to become payable to any officer, director, employee, consultant or advisor, or make any declaration, payment or commitment or obligation of any kind for the payment (whether in cash or equity) of a severance payment, termination payment, bonus or other additional salary or compensation to any such person, except as required by, and in accordance with, any payments made pursuant to written agreements existing as of outstanding on the date hereof and as set forth on SECTION 6.1(G) of disclosed in the Company Disclosure SchedulesSchedule;
(hj) Except as required by sell, lease, license or otherwise dispose of or grant any security interest in any of its properties or assets (whether tangible or intangible), including without limitation the sale of any accounts receivable of the Company, except in the ordinary course of business and consistent with past practices;
(k) make any loan to any person or entity or purchase debt securities of any person or entity or amend the terms of any agreement between outstanding loan agreement;
(l) incur any indebtedness, guarantee any indebtedness of any person or entity, issue or sell any debt securities, or guarantee any debt securities of any person or entity;
(m) waive or release any material right or claim of the Company, including any write-off or other compromise of any account receivable of the Company;
(n) commence or settle any lawsuit, threat of any lawsuit or proceeding or other investigation against the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, involving an amount in dispute greater than $25,000;
(o) issue, delivergrant, deliver or sell or authorize or propose the issuance, deliverygrant, grant delivery or sale of, or purchase or propose the purchase of, any shares of its capital stock of Company Capital Stock or any class or securities convertible into, exercisable or any exchangeable for, or subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue or purchase any such shares or other convertible securities, other than except for (i) the issuance of shares of Company Capital Stock (with Company Rights attached thereto) pursuant to the exercise of outstanding Company Rights or Options and Company Series E Preferred Stock, stock options or warrants outstanding Warrants and (ii) the issuance of Company Options to new employees as of set forth in Section 4.1(o) to the date of this Agreement;Disclosure Schedule; or
(p) (i) Cause, permit except standard end user licenses or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock other customer agreements entered into on or prior to in the date ordinary course of this Agreement;
(j) Sellbusiness, consistent with past practice, sell, lease, license, encumber license or otherwise dispose transfer to any person or entity any rights to any Company Intellectual Property or enter into any agreement or modify any existing agreement with respect to any Company Intellectual Property with any person or entity or with respect to any Intellectual Property Rights of any of the properties person or assets of the Company or any of its Subsidiaries or terminate or waive any contractsentity, claims, or rights, in each case, (ii) except in the ordinary course of business business, consistent with past practice practice, purchase or in connection license any Intellectual Property Rights or enter into any agreement or modify any existing agreement with respect to the Technology or Intellectual Property Rights of any person or entity, (iii) enter into any agreement or modify any existing agreements entered into between agreement with respect to the development of any Intellectual Property Rights with a third party, or (iv) change pricing or royalties set or charged by the Company and Silicon Valley Bankto its customers or licensees, or the pricing or royalties set or charged by persons who have licensed Intellectual Property Rights to the Company;
(kq) Incur enter into or amend any material indebtedness for borrowed money (other than ordinary course trade payables or agreement pursuant to existing credit facilities in which any other party is granted marketing, distribution, development, manufacturing or similar rights of any type or scope with respect to any product, service or technology of the ordinary course of businessCompany;
(r) or guarantee enter into any such prohibited indebtedness or issue agreement to purchase or sell any debt securities interest in real property, grant any security interest in any real property, enter into any lease, sublease, license or warrants other occupancy agreement with respect to any real property or rights to acquire debt securities alter, amend, modify or terminate any of the Company terms of any Lease Agreements; or
(s) except as set forth in Section 4.1(s) to the Disclosure Schedule, amend or otherwise modify (or agree to do so) any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereofMaterial Contracts;
(lt) Except as required acquire or agree to acquire by law merging or permitted consolidating with, or by SECTION 6.1(C)purchasing any assets or equity securities of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company;
(u) adopt or amend any Company Scheduled Employee Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices)as contemplated by this Agreement, including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering enter into of any employment contract contract, pay or the payment of agree to pay any special bonus or special remuneration to any director or employee;
Employee, or increase or modify the salaries, wage rates, or other compensation (m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract equity-based compensation) of its Employees except for (i) amendments required by law or with respect to conform any bonus such Company Employee Plan or special remunerationEmployee Agreement to the requirements of any applicable law, other than (ii) payments contemplated in this Agreement, and (iii) payments made pursuant to written agreements outstanding on the payment, discharge or satisfaction date hereof and disclosed in the ordinary course of business of liabilities Section 4.1(u) of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41Disclosure Schedule;
(ov) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing strategic alliance, affiliate agreement or joint marketing arrangement or agreement;
(w) except as set forth in Section 4.1(w) of the Disclosure Schedule, settle hire, promote, demote or terminate any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money)Employees, or consent encourage any Employees to resign from the Company; provided, however, that Parent shall be deemed to have consented to any extension or waiver such action if notice of disapproval is not provided to the Company within two (2) Business Days after notice of the limitation period applicable proposed action is provided to Parent;
(x) except in cooperation with Parent or in substantial compliance with guidelines provided by Parent, make any claim representations or assessment issue any communications (including electronic communications) to Employees regarding any benefits of the transactions contemplated by this Agreement, including any representations regarding offers of employment from Parent or the terms thereof;
(y) alter, or enter into any commitment to alter, its interest in respect of Taxesany corporation, association, joint venture, partnership or business entity in which the Company directly or indirectly holds any interest;
(z) cancel, amend or renew any insurance policy; or
(paa) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Taketake, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(ASections 4.1(a) THROUGH (Rthrough 4.1(z) abovehereof, or any other action which that would (i) prevent the Company from performing, or cause the Company not to perform, their respective covenants hereunder or (ii) cause or would be reasonably likely to cause result in any of its respective representations and warranties contained herein being untrue or incorrect. Parent acknowledges that any action taken with the conditions written consent of Parent pursuant to this Section 4.1 and after notification by the Merger Company that such action will constitute a breach of a representation or warranty set forth in SECTIONS 7.1 OR 7.3ARTICLE II, not or that is disclosed in Section 4.1 of the Disclosure Schedule, in each case that causes any representation and warranty set forth in ARTICLE II, as modified by the Disclosure Schedule, to be satisfiedinaccurate as of the Closing Date, shall be deemed to not be a breach of such representation or warranty.
Appears in 1 contract
Conduct of Business of the Company. During the period The Company hereby covenants and agrees that, from the date of this Merger Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company (which for the purposes of Company, unless otherwise expressly contemplated by this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except Merger Agreement or consented to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)by XxXxxx, to will, and will cause the Subsidiaries to, carry on its business and to cause each of its Subsidiaries to carry on its business their respective businesses only in the usualOrdinary Course of Business, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially their respective reasonable best efforts consistent with past practices and policies to preserve intact its present their business organizationsorganizations and Assets, keep available maintain their rights and franchises, retain the services of its present their officers and key employees and preserve its maintain their relationships with customers, suppliers, distributors, licensors, licensees, licensees and others having business dealings with them, and use their respective reasonable best efforts to keep in full force and effect liability insurance and bonds comparable in amount and scope of coverage to that currently maintained. Without limiting the Company or any such Subsidiariesgenerality of the foregoing, to except as otherwise expressly contemplated by this Merger Agreement, from the end that the goodwill and ongoing businesses date of Company and each of its Subsidiaries be unimpaired at this Merger Agreement until the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, Time the Company shall not, and shall not permit any of its the Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed)::
(a) Except as provided (i) increase in this Agreement any manner the compensation or as described fringe benefits of, or pay any bonus to, any director, officer or employee, except for increases or bonuses in the Company Disclosure Schedules, accelerate, amend Ordinary Course of Business to employees who are not directors or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
officers; (bii) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) other than pursuant to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past normal severance practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements existing Agreements of the Company or any Subsidiary in effect on the date of its Subsidiaries this Merger Agreement as described in Schedule 5.01(a)(ii)) to, or enter into any severance Agreement with, any director, officer or employee, or enter into any employment Agreement with any director, officer or employee; (iii) establish, adopt, enter into or amend any Plan or Other Arrangement, except as may be required to comply with applicable Law; (iv) pay any benefit not provided for under similar circumstancesany Plan or Other Arrangement; (v) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Plan or Other Arrangement (including the grant of stock options, stock appreciation rights, stock-based or stock-related awards, performance units or restricted stock, or the removal of existing restrictions in any Plan or Other Arrangement or Agreement or awards made thereunder), except for grants in the Ordinary Course of Business or as required under the Agreements set forth in Schedule 5.01(a)(v), or (vi) take any action to fund or in any other way secure the payment of compensation or benefits under any Agreement, except as required under the Agreements set forth in Schedule 5.01(a)(vi);
(db) Transferdeclare, license set aside or sell to pay any person dividend on, or entity make any other distribution in respect of, outstanding shares of capital stock;
(i) redeem, purchase or otherwise extend, amend or modify acquire any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms shares of capital stock of the Company or any Subsidiary or any securities or obligations convertible into or exchangeable for any shares of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business capital stock of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of ParentSubsidiary, or any options, warrants or conversion or other rights to acquire any shares of their affiliates, nor shall capital stock of the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on Subsidiary or make any such securities or obligations, or any other distributions securities thereof; (whether in cash, stock ii) effect any reorganization or propertyrecapitalization; or (iii) in respect of any of its capital stock, or 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 capital stock of the Company;
(g) Repurchase or otherwise acquirefor, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedulesstock;
(hd) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell award, grant or sell, or authorize or propose the issuance, delivery, award, grant or sale (including the grant of any limitations in voting rights or other Encumbrances) of, any shares of any class of its capital stock of (including shares held in treasury), any class or securities convertible intointo or exercisable or exchangeable for any such shares, or any subscriptions, rights, warrants or options to acquire, any such shares, or enter into other agreements amend or commitments otherwise modify the terms of any character obligating it such rights, warrants or options the effect of which shall be to issue make such terms more favorable to the holders thereof;
(e) except as contemplated by Agreements that have been identified in Section 3.14(a) of the Company Disclosure Schedule, acquire or agree to acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the Assets of, or by any such shares other manner, any business or any corporation, partnership, association or other convertible securitiesbusiness organization or division thereof, or otherwise acquire or agree to acquire any Assets of any other Person (other than the issuance purchase of shares assets from suppliers or vendors in the Ordinary Course of Company Stock Business);
(with Company Rights attached theretof) pursuant sell, lease, exchange, mortgage, pledge, transfer or otherwise subject to any Encumbrance or dispose of, or agree to sell, lease, exchange, mortgage, pledge, transfer or otherwise subject to any Encumbrance or dispose of, any of its Assets;
(g) adopt any amendments to its articles or certificate of incorporation, bylaws or other comparable charter or organizational documents;
(h) make or rescind any express or deemed election relating to Taxes, settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, or change any of its methods of reporting income or deductions for federal income tax purposes from those employed in the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as preparation of the date of this Agreementfederal income tax returns for the taxable year ended December 31, 1997, except in either case as may be required by Law, the IRS or GAAP;
(i) Cause, permit make or propose agree to make any amendments to new capital expenditure or expenditures which are not included in the Company's certificate 1999 capital budget, a copy of incorporation or by-lawswhich was furnished to XxXxxx, except as required by and which are, individually, in excess of $25,000 or, in the terms aggregate, in excess of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement$50,000;
(ji) Sell, lease, license, encumber or otherwise dispose of incur any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or of another Person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries or Subsidiary, guarantee any debt securities of othersanother Person, enter into any "keep well" or other Agreement to maintain any financial statement condition of another Person or enter into any Agreement having the economic effect of any of the foregoing, except for short-term borrowings incurred in each case pursuant to existing agreements entered into the Ordinary Course of Business, or (ii) make any loans, advances or capital contributions to, or investments in, any other Person other than intra-group loans, advances, capital contributions or investments between or among the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as any of the date hereofits wholly owned Subsidiaries;
(lk) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge discharge, settle or satisfy in an amount in excess of $100,000 any claims, liabilities or obligations (in any one case) whether absolute or $500,000 (in the aggregate prior to October 1contingent, 2001) matured or $200,000 (in the aggregate in any given calendar month beginning October 1unmatured, 2001known or unknown), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction satisfaction, in the ordinary course Ordinary Course of business Business or in accordance with their terms, of liabilities of the type reflected or reserved against in, or contemplated by, the most recent Financial Statement or incurred in the Company Financial Statements (Ordinary Course of Business, or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change waive any material election in respect of Taxesbenefits of, adopt or change agree to modify in any material respect respect, any accounting method in respect of Taxesconfidentiality, file any material Return standstill or similar Agreements to which the Company or any amendment to Subsidiary is a material Returnparty;
(l) except in the Ordinary Course of Business, enter into waive, release or assign any closing agreement, settle any claim rights or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money)claims, or consent modify, amend or terminate any Agreement to which the Company or any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; orSubsidiary is a party;
(pm) Except for make any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used or policy other than those required by itGAAP or a Governmental Entity;
(qn) Except as otherwise permitted pursuant to SECTION 6.3, take any action or fail to exempt take any action which could reasonably be expected to have a Company Material Adverse Effect prior to or make any person, entity after the Effective Time or action (other than Parent) not subject to a XxXxxx Material Adverse Effect after the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person fromEffective Time, or waive or permit that could reasonably be expected to adversely affect the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any ability of the Company or any of its Subsidiaries is a party Subsidiary prior to the Effective Time, or under which the Company XxXxxx or any of its Subsidiaries has any rightssubsidiaries after the Effective Time, and will use its best efforts to enforce obtain consents of third parties or cause approvals of Governmental Entities required to be enforced each such agreement at consummate the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of transactions contemplated in this Merger Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.; or
(so) Takeauthorize, or commit or agree in writing or otherwise to take, do any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedforegoing.
Appears in 1 contract
Conduct of Business of the Company. (a) During the period from commencing on the date of this Original Agreement Date and continuing until ending on the earlier of the termination of this Agreement pursuant to in accordance with its terms and the Effective TimeClosing Date (the “Pre-Closing Period”), except as (i) otherwise required by this Agreement, (ii) set forth in Section 5.1(a) or Section 5.1(b) of the Sellers Disclosure Schedules, (iii) required by any Law or Order applicable to Sellers or any Acquired Company or the assets, or operation of the business, of Sellers or any Acquired Company or any Contract (which for was entered into before the purposes Closing) to which an Acquired Company is party or by which any of this SECTION 6.1 shall include the Company and each of its SubsidiariesAcquired Companies’ assets or properties are bound or (iv) agrees, except consented to the extent that Parent shall otherwise consent in writing by Buyer (which consent shall not be unreasonably withheld withheld, conditioned or delayed, and provided that the failure of Buyer to respond to such a request for consent within seven (7) Business Days thereafter shall be deemed to constitute consent), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary courseSellers shall, and to shall cause the Acquired Companies to, use and cause each of its Subsidiaries to use all commercially reasonable efforts to: (1) operate the business of the Acquired Companies in the ordinary course of business consistent with past practices practice (including with respect to the making of Capital Expenditures) and policies to in material compliance with its Permits and Law; and (2) (A) maintain and preserve intact its the Acquired Companies’ present business organizations, keep available assets and technology; (B) maintain in effect all of the services Permits material to the business of its present officers and employees the Acquired Companies; (C) maintain and preserve its the Acquired Companies’ relationships and good will with customers, suppliers, distributors, licensors, licensees, suppliers and others having material business dealings with the Company Acquired Companies; and (D) manage the working capital of the Acquired Companies (including the timing of collection of accounts receivable and payment of accounts payable) in the ordinary course of business consistent with past practice (provided that Sellers shall not take any action (or direct the Acquired Companies to take any action), the primary intent of which is to manipulate the Working Capital Adjustment Amount and/or the Final Working Capital Adjustment Amount); provided, however, that (x) no action or inaction by Sellers or any of the Acquired Companies with respect to any matters specifically addressed by any clause of Section 5.1(b) shall be deemed a breach of this Section 5.1(a) unless such Subsidiariesaction or inaction would constitute a breach of such clause of Section 5.1(b) and (y) Buyer’s consent with respect to any action or matter pursuant to Section 5.1(b) shall be deemed to constitute consent for all purposes under this Agreement, to including for purposes of this Section 5.1(a).
(b) Without limiting the end that generality of the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at foregoing Section 5.1(a), during the Effective Time. Except Pre-Closing Period, except as expressly provided for (x) otherwise required by this Agreement, (y) set forth in Section 5.1(b) of the Credit Agreement, Sellers Disclosure Schedules or (z) as required by any Law or Order applicable to Sellers or any Acquired Company or the Security Agreementassets, or operation of the Software Distribution Agreementbusiness, the Company of Sellers or any Acquired Company, Sellers shall not, and shall cause the Acquired Companies not permit to, take any of its Subsidiaries to, prior the following actions with respect to the Effective Time or earlier termination of this Agreement pursuant to its terms, Acquired Companies without the prior written consent of Parent Buyer (which consent shall not be unreasonably withheld withheld, conditioned or delayed, and provided that the failure of Buyer to respond to such a request for consent within seven (7) Business Days thereafter shall be deemed to constitute consent):
(ai) Except as provided in this Agreement make any amendment to the Organizational Documents of the Acquired Companies;
(ii) issue, sell, grant, pledge or as described in otherwise dispose of, or grant or suffer to exist any Encumbrance with respect to, any of the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted Acquired Companies’ capital stock, or reprice options granted under the Company Option Plans grant any options, warrants or authorize cash payments in exchange other rights to acquire any such capital stock or other interest or any instrument convertible into or exchangeable or exercisable for any options granted under any of such planscapital stock or other interest;
(biii) Enter (A) split, combine or reclassify any shares of its capital stock, equity securities or other ownership interests, (B) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, equity securities or other ownership interests, (C) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Shares, Management Shares or Subsidiary Shares or (D) enter into any agreement with respect to the voting of its capital stock, equity securities or other ownership interests;
(iv) adopt any plan of merger, consolidation, reorganization, recapitalization, liquidation or dissolution of any Acquired Company, file a petition in bankruptcy under any provisions of federal or state bankruptcy Law on behalf of any Acquired Company or consent to the filing of any bankruptcy petition against any Acquired Companies under any similar Law;
(v) create any Subsidiary of an Acquired Company;
(vi) make any material partnership arrangementschanges in any accounting methods, joint development agreements principles or strategic alliancespractices except as required by IFRS or as disclosed in the notes to any of the Financial Statements;
(vii) make any material changes in its cash management practices or its policies, practices and procedures with respect to collection of accounts receivable, establishment of reserves for uncollectible accounts, accrual of accounts receivable, prepayment of expenses, payment of trade accounts payable, accrual of other expenses, deferral of revenue and acceptance of customer deposits;
(viii) except in the ordinary course of business consistent with past practice (A) accelerate, terminate, cancel, renew, amend, grant a waiver under or otherwise modify any Material Contract in any material respect; provided that the Acquired Companies shall not fail to exercise a right to extend or renew a Material Contract or any rights thereunder without prior consultation with Buyer, (B) enter into any Contract that would constitute a Material Contract if in effect as of the Original Agreement Date or (C) waive, release or assign any material rights, claims or benefits of any Acquired Company;
(ix) make any capital expenditures in excess of $30,000,000, individually or in the aggregate, per fiscal quarter;
(x) incur, assume or guarantee any indebtedness for borrowed money other than (A) in an amount not exceeding $25,000,000 individually or in the aggregate, (B) indebtedness incurred in order to fund the payment of amounts paid in accordance with the Phantom and Common Stock Compensation Plan or the one-time employee transaction completion bonus, in each case on or prior to the Closing Date or (C) in the ordinary course of business consistent with past practice (and, for the avoidance of doubt, any amounts not repaid prior to the Closing will constitute Indebtedness);
(xi) grant or suffer to exist any material Encumbrance, other than any Permitted Encumbrances, on any properties or assets (other than Intellectual Property), tangible or intangible, of the Acquired Companies;
(xii) sell, lease, pledge, abandon, assign or otherwise dispose of any of the material assets, securities, properties (including Real Property) or rights (other than Intellectual Property) of any Acquired Company except (A) pursuant to existing Contracts or (B) in the ordinary course of business consistent with past practice;
(cxiii) Except as required by law sell, assign, lease, sublease, license, sublicense or otherwise transfer or dispose of, abandon or permit to lapse, fail to take any existing benefit plans and agreements of the Company action necessary to maintain, enforce or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstandingprotect, or policies existing, create or incur any Encumbrance on the date hereof and as previously disclosed in writing to Parent any material Owned Intellectual Property or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstancesmaterial Licensed Intellectual Property;
(dxiv) Transfer, license purchase or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectlyindirectly (including by merger, consolidation, or acquisition of stock or assets or any other business combination), any shares of its capital stock except as required bycorporation, and in accordance withpartnership, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedulesother business organization or division thereof;
(hxv) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on institute, terminate or prior to the date of this Agreement, issue, deliver, sell settle or authorize offer or propose the issuance, delivery, grant or sale of, to settle any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this AgreementLegal Proceeding;
(ixvi) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of an Employee Plan as in effect on the Original Agreement Date, (A) grant any agreement between the Company and any holder of Company Series E Preferred Stock entered into on severance, retention or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claimstermination pay to, or rightsenter into or amend any severance, retention, termination, employment, consulting, bonus, change in each casecontrol or severance agreement with, except any current or former Service Provider, (B) increase the compensation or benefits provided to any current or former Service Provider other than increases in base compensation of not more than three percent (3%) to employees with annual base compensation of less than $100,000 in the ordinary course of business consistent with past practice practice; (C) grant any equity or in connection with existing agreements entered equity-based awards to, or discretionarily accelerate the vesting or payment of any such awards held by, any current or former Service Provider; or (D) establish, adopt, enter into between the Company and Silicon Valley Bankor amend any Employee Plan, collective bargaining agreement or other labor agreement;
(kxvii) Incur (A) hire any material indebtedness for borrowed money employees of the Acquired Companies (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course fill vacancies arising due to terminations (for just cause) of businessemployment of employees with annual base compensation of less than $100,000) or guarantee (B) terminate (for just cause) the employment of any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities employees of the Company Acquired Companies with annual base compensation of $100,000 or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereofmore;
(lxviii) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of TaxesTax election, change any annual Tax accounting period, adopt or change in any material respect any accounting method in respect of TaxesTax accounting, file any material Return amended Tax return, obtain any Tax ruling or any amendment to a material Return, enter into any closing or similar agreement, settle any material Tax claim, assessment, audit, contest or other similar proceeding, surrender any right to claim a material Tax refund, offset or assessment other reduction in respect of Taxes (except settlements effected solely through payment of immaterial sums of money)Tax liability, or consent to any extension or waiver of the limitation limitations period applicable to any material Tax claim or assessment in respect of Taxesassessment; or
(pxix) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit agree or commit to take any of its Subsidiaries to, change any method of accounting or accounting practice used by it;the actions in the foregoing clauses (i) through (xviii).
(qc) Except as otherwise permitted pursuant specifically set forth herein, nothing contained in this Agreement shall give Buyer, directly or indirectly, the right to SECTION 6.3, take any action to exempt control or make any person, entity or action (other than Parent) not subject to direct the provision of Section 203 business and operations of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months Acquired Companies prior to the date Closing. Prior to the Closing, Sellers and the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in complete control and supervision over the Company to return all confidential information heretofore furnished to such Person by or on behalf business and operations of the Company or any of its SubsidiariesAcquired Companies.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Samples: Stock Purchase Agreement (Millicom International Cellular Sa)
Conduct of Business of the Company. During Except (a) as described in Section 6.1 of the Company Disclosure Letter, (b) as required by applicable Law (including any COVID-19 Measures), (c) as consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed) or (d) as required or expressly provided for by this Agreement, during the period from the date of this Agreement and continuing until the earlier of the valid termination of this Agreement pursuant to its terms and or the Effective Time, (x) the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of use its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices to conduct its operations in all material respects in the ordinary course of business, and policies the Company shall use its commercially reasonable efforts to preserve intact its present business organizationsorganization, keep including keeping available the services of its current executive officers, and to preserve the present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others those Persons having significant business dealings relationships with the Company or any such Subsidiaries, to and (y) without limiting the end that generality of the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreementforegoing, the Company shall not:
(i) adopt any amendments to its certificate of incorporation or bylaws;
(ii) issue, and shall not permit sell, grant options or rights to purchase, pledge, or authorize or propose the issuance, sale, grant of options or rights to purchase or pledge, any of its Subsidiaries toCompany Securities, prior other than (A) Company Shares issuable (x) with respect to the Effective Time exercise, vesting or earlier termination settlement of this Agreement pursuant to its terms, without Company Stock Awards outstanding as of the prior written consent of Parent (which consent shall not be unreasonably withheld date hereof or delayed):
(a) Except as provided granted in compliance with this Agreement or as described in (y) pursuant to the Company Disclosure SchedulesESPP, accelerate, amend in each case in accordance with the terms of such Company Stock Awards or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans ESPP, as applicable, as in effect on the date hereof (or authorize cash payments any subsequent date of grant in exchange for any options respect of Company Stock Awards granted under any of such plansin compliance with this Agreement);
(biii) Enter into acquire or redeem or offer to acquire or redeem, directly or indirectly, or amend any material partnership arrangementsCompany Securities, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made than (A) in connection with the termination satisfaction of employees who are not executive officers exercise price or Tax withholding obligations in amounts consistent connection with the Company's policies and past practices vesting, exercise or settlement of any Company Stock Award outstanding as of the date hereof or granted in compliance with this Agreement or (B) pursuant to written agreements outstandingthe acquisition by the Company of Company Stock Awards in connection with the forfeiture of such Company Stock Awards, or policies existingin each case, in accordance with the terms of such Company Stock Awards, as in effect on the date hereof (or any subsequent date of grant in respect of Company Stock Awards granted in compliance with this Agreement);
(iv) split, combine or reclassify its capital stock or declare, set aside, make or pay any dividend or distribution (whether in cash, stock or property) on any shares of its capital stock;
(A) acquire, by means of a merger, consolidation, recapitalization or otherwise, any business, assets or securities (other than, in each case, capital expenditures in accordance with subclause (xiii) below and as previously disclosed any acquisition of assets, including active pharmaceutical ingredients and other supplies, in writing to Parent the ordinary course of business) for consideration in excess of $500,000, (B) sell, lease, or otherwise dispose of any assets of the Company with a fair market value in excess of $500,000, except (C1) pursuant to written agreements consistent with the past agreements Contracts or commitments existing as of the Company date of this Agreement and made available to Parent, (2) sales of products or any services in the ordinary course of its Subsidiaries under similar circumstances;
business, (d3) TransferIncidental Contracts, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights4) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license licenses entered into in the ordinary course of business, including non-exclusiveand (5) dispositions or abandonments of immaterial tangible assets in the ordinary course of business, enterprise-wide (C) adopt a plan of complete or site licenses.partial liquidation, dissolution, recapitalization or restructuring, or (D) form any Subsidiary;
(evi) Commence incur, assume or otherwise become liable or responsible for any material litigation other than indebtedness for borrowed money, except for borrowings in an amount in excess of $500,000 in the aggregate;
(ivii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the routine collection obligations of billsany other Person in an amount in excess of $500,000 in the aggregate;
(viii) make any loans, advances (iiother than for ordinary course business expenses or pursuant to the Company’s governing documents or existing indemnification obligations) for software piracyor capital contributions to, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Subinvestments in, any other Subsidiary Person in excess of Parent$500,000, except for advancement of expenses (A) under any indemnification agreement or any (B) the certificate of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare incorporation or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock bylaws of the Company;
(gix) Repurchase or otherwise acquirechange, directly or indirectlyin any material respect, any shares of its capital stock financial accounting methods, principles or practices used by it, except as required byby GAAP or applicable Law;
(x) make, and rescind or change any material Tax election or amend any material Tax Return, settle any material Legal Proceeding relating to Taxes or enter into any material closing agreement with respect to Taxes, change any annual Tax accounting period or any material Tax accounting method, or surrender any right to claim a refund of a material amount of Taxes, fail to file when due (taking into account any extensions automatically granted) any material Tax Return, in accordance witheach ease, any agreements existing other than as required by applicable Law or in the ordinary course of business;
(xi) except as required by applicable Law or required by a Plan as in effect on the date hereof (or any plan, program, agreement or policy that would be a Plan if it were in existence on the date hereof that is established in compliance with this Agreement), (A) grant or pay (or otherwise increase) any change in control, retention, severance, termination or similar pay to its current or former officers, employees, directors or consultants, (B) grant any increases in the compensation or benefits payable to its employees, officers, directors or consultants, other than increases in annual base compensation (and as corresponding increases in annual target bonus compensation) in the ordinary course of business with respect to employees, provided that (x) the aggregate amount of such increases shall not exceed 4.0% of all 2023 annual base compensation with respect to employees of the Company, (y) with respect to each employee at the level of Vice President or above, such increase shall not exceed, on an individual basis, 4.0% of such employee’s 2023 annual base compensation and (z) such increases shall be effective April 1, 2024, (C) accelerate the vesting or payment, or funding of any payment or benefit under any Plan (or any plan, program, agreement or policy that would be a Plan if it were in existence on the date hereof), including any Company Stock Award, (D) adopt, enter into, amend (other than immaterial amendments that do not increase the Liability of the Company under such Plan and are not otherwise prohibited under this clause (xi); provided, that, for the avoidance of doubt, no such amendments may modify an employee’s existing potential severance or otherwise expand the conditions under which such employee may become eligible to receive severance) or terminate any Plan (or any plan, program, agreement or policy that would be a Plan if it were in existence on the date hereof), (E) hire, promote or terminate any employee at (or who would be at) the level of Vice President or above (other than a termination for cause), (F) engage any consultant, other than the engagement of a consultant on an at-will basis or pursuant to a consulting agreement that is terminable at will or upon no more than thirty (30) days’ notice with no Liability (other than any Liability for compensation or fees owed for services rendered prior to the date of such termination), or (G) terminate any consultant set forth on SECTION 6.1(GSection 6.1(y)(xi) of the Company Disclosure SchedulesLetter (other than a termination for cause or due to a material breach under the applicable consulting agreement for such consultant);
(hxii) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements any collective bargaining or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreementsimilar labor Contract;
(ixiii) Causemake or authorize any material capital expenditure or incur any obligations, permit Liabilities or propose any amendments to the Company's certificate of incorporation or by-lawsindebtedness in respect thereof, except as required for (A) those contemplated by the terms capital expenditure budget for the relevant fiscal year, which capital expenditure budget has been provided or made available to Parent and (B) any unbudgeted capital expenditure, in an amount in excess of, in any year, in the aggregate, $500,000;
(A) except in the ordinary course of business, commence any agreement between suit, action, claim, or proceeding or (B) settle any suit, action, claim, proceeding or investigation other than as contemplated by Section 7.11 or a settlement solely for monetary damages (net of insurance proceeds received) not in excess of $250,000 individually or $500,000 in the aggregate;
(xv) abandon, sell, transfer, dispose of, cancel, knowingly allow to lapse, or fail to renew, maintain or defend, encumber, convey title (in whole or in part) or grant any right or other licenses to material Company and any holder of Company Series E Preferred Stock Intellectual Property Rights other than non-exclusive licenses pursuant to Incidental Contracts entered into on in the ordinary course of business and abandonment or lapse of patent applications in the ordinary course of patent prosecution;
(xvi) unless mandated by a Governmental Authority, (A) make any material changes to, discontinue, terminate or suspend any ongoing research and development program relating to a Company Product or (B) commence, alone or with any third party, any material research and development program that has not been disclosed to Parent prior to the date of this Agreement;
(jxvii) Sellmake any non-routine, leasematerial submissions or filings to the FDA or any other applicable Governmental Authority related to the Company’s business and operations, licensethe Platform or any Company Product, encumber without, to the extent practicable and legally permissible, (A) providing Parent with a reasonable opportunity to review and comment on such submissions or otherwise dispose filings and (B) considering in good faith the incorporation of any of the properties or assets of Parent’s reasonable comments that are received by the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, a timely fashion;
(xviii) except in the ordinary course of business consistent with past practice or in connection with existing agreements any transaction to the extent specifically permitted by any other subclause of this Section 6.1, (A) enter into any Contract that would, if entered into between prior to the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of othersdate hereof, be a Material Contract, except for any statement of work issued under an existing Material Contract, in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 500,000 individually; or (in any one caseB) materially modify, materially amend or $500,000 terminate (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the paymentexpirations in accordance with its terms) any Material Contract or waive, discharge release or satisfaction in the ordinary course of business of liabilities of the type reflected assign any material rights or reserved against in the Company Financial Statements (or in the notes thereto); 41material claims thereunder;
(oxix) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreementContract that by its terms would purport to bind Parent or its Affiliates (other than, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of moneyfollowing the Closing, the Company), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(pxx) Except for offer, agree or commit, in writing or otherwise, to take any change which of the foregoing actions. Notwithstanding the foregoing, nothing in this Agreement is required by reason intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the business or operations of a concurrent change in GAAPthe Company at any time prior to the Acceptance Time. Prior to the Acceptance Time, the Company will notshall exercise, consistent with the terms and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date conditions of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of complete control and supervision over its Subsidiariesbusiness and operations.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Samples: Merger Agreement (Icosavax, Inc.)
Conduct of Business of the Company. During the period from the date ---------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective Time, the Company (which for agrees, and the purposes of this SECTION 6.1 shall include Principal Shareholders agree, to use commercially reasonable efforts to cause the Company and each of its Subsidiaries) agreesCompany, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, to carry on its business and to cause each of its Subsidiaries to carry on its the Company's business in the usualOrdinary Course of Business, regular to pay the debts and ordinary courseTaxes of the Company when due (except those reasonably in dispute), and to pay or perform other obligations when due (except those reasonably in dispute), and, to the extent consistent with such business, use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its the Company's present business organizations, keep available the services of its the Company's present officers and key employees and preserve its the Company's relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, all with the Company or any such Subsidiaries, to goal of preserving unimpaired the end that the Company's goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. The Company shall promptly notify Parent of any event or occurrence or emergency not in the Ordinary Course of Business of the Company and any material event involving the Company. Except as expressly provided for contemplated by this AgreementAgreement and as set forth in Section 4.1 of the Disclosure Schedule, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, ----------- the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Parent:
(a) Except as provided in this Agreement enter into any capital expenditure commitment or as described transaction exceeding $100,000 individually or $200,000 in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansaggregate;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) except for the granting of non-exclusive licenses of object code relating to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination sale of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, products shipping on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusivesell, enterprise-wide license or site licenses.transfer to any person or entity any rights to any Company Intellectual Property or enter into any agreement with respect to any Company Intellectual Property with any person or entity or with respect to any Intellectual Property of any person or entity, (ii) buy or license any Intellectual Property or enter into any agreement with respect to the Intellectual Property of any person or entity except in the Ordinary Course of Business, (iii) enter into any agreement with respect to the development of any Intellectual Property with a third party, or (iv) change pricing or royalties charged by the Company to its customers or licensees, or the pricing or royalties set or charged by persons who have licensed Intellectual Property to the Company;
(c) enter into or 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 or technology of the Company;
(d) amend or otherwise modify (or agree to do so), or violate the terms of, any of the Contracts set forth or described in the Disclosure Schedule;
(e) Commence commence or settle any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto)litigation;
(f) Declare 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 stockCompany Common Stock or Company Preferred Stock, or split, combine or reclassify any of its capital stock Company Common Stock or Company Preferred Stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase Company Common Stock or Company Preferred Stock, or repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock Company Common Stock or Company Preferred Stock (or options, warrants or other rights exercisable therefor) except as required by, and in accordance with, any with the agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the evidencing Company Disclosure SchedulesOptions;
(hg) Except except as required contemplated by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this AgreementRelated Documents, issue, delivergrant, deliver or sell or authorize or propose the issuance, deliverygrant, grant delivery or sale of, or purchase or propose the purchase of, any shares of its capital stock of any class the Company or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue or purchase any such shares or other convertible securities, other than except for the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to capital stock upon the exercise of Company Rights outstanding options;
(h) except as contemplated by the Related Documents, cause or Company Series E Preferred Stockpermit any amendments to its articles of incorporation, stock options bylaws or warrants outstanding as other organizational documents of the date of this AgreementCompany;
(i) Causeacquire or agree to acquire by merging or consolidating with, permit or propose by purchasing any amendments assets or equity securities of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreementbusiness;
(j) Sellexcept as allowed pursuant to Section 4.1(b) hereof, sell, lease, license, encumber -------------- license or otherwise dispose of any a material amount of the its properties or assets, except properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except which are not Intellectual Property and only in the ordinary course of business consistent with past practice or and except for non-exclusive object code licenses of Company Intellectual Property in connection with existing agreements entered into between the Company and Silicon Valley Bankordinary course of business;
(k) Incur incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities debt incurred in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law grant any loans to others or permitted by SECTION 6.1(C), purchase debt securities of others or amend the terms of any outstanding loan agreement;
(m) grant any severance or termination pay (i) to any director or officer or (ii) to any other employee except payments made pursuant to standard written agreements outstanding on the date hereof and disclosed in the Disclosure Schedule;
(n) adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option employee benefit plan, the entering or enter into of any employment contract contract, pay or the payment of agree to pay any special bonus or special remuneration to any director or employee, or increase the salaries, wage rates or other compensation of its employees except payments made pursuant to standard written agreements in place on the date hereof and disclosed in the Disclosure Schedule;
(mo) Revalue any of the assets of the Company or revalue any of its Subsidiariesassets, including without limitation writing down the value of inventory, inventory or writing off notes or accounts receivable, receivable other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable lawbusiness;
(np) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy satisfy, in an amount in excess of $100,000 (10,000 in any one case) , or $500,000 (25,000 in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001)aggregate, any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business and not otherwise in violation of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41this Agreement;
(oq) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money)Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release enter into any strategic alliance or permit the release of any Person from, joint marketing arrangement or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.agreement;
(s) Taketake any action to accelerate the vesting schedule of any of the outstanding Company Options or Company Common Stock or amend, modify or waive any term or provision of any stock restriction or repurchase agreement to which the Company is party;
(t) hire or terminate any employees, or encourage any employees to resign from the Company; or
(u) make any purchases, or enter into any Contract to purchase, any inventory, except any inventory purchased in accordance with a written inventory purchase plan previously approved by Parent or in the ordinary course of business.
(v) take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(ASections 4.1(a) THROUGH (Rthrough 4.1(u) abovehereof, or any other action which -------------- ------ that would cause (x) prevent the Company or would be reasonably likely to cause any of the conditions to Principal Shareholders from performing or cause the Merger set forth in SECTIONS 7.1 OR 7.3, Company or any of the Principal Shareholders not to be satisfiedperform their respective covenants hereunder or (y) cause or result in any or their respective representations and warranties contained herein being untrue or incorrect.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Lantronix Inc)
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective Time, the Company (which for agrees to operate the purposes business of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)provide its prior written consent, to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary coursecourse in substantially the same manner as heretofore conducted. The Company further agrees to pay the debts and Taxes of the Company and its Subsidiaries when due, to pay or perform other obligations when due, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact the Company’s and its Subsidiaries’ present business organizations, keep available the services of the Company’s and its Subsidiaries’ present officers and employees the other persons identified on Schedule 2.21(a)(ii) of the Company Disclosure Schedules, and preserve the Company’s and its Subsidiaries’ relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of it. The Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld (from the perspective of Parent) withheld, conditioned or delayed):), take any of the following actions, except those actions necessary or advisable in order to consummate the Merger:
(a) Except as provided make any capital expenditures or enter into any commitment or transaction for capital expenditures exceeding $50,000 other than capital expenditures contemplated by the Company’s capital expenditure plan set forth in this Agreement or as described in Section 2.8 of the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except for purchase orders for the Company’s products in the ordinary course of business consistent with past practicepractices, (i) sell, license or transfer to any person or entity any rights to any Company Intellectual Property or enter into any agreement with respect to any Company Intellectual Property with any person or entity or with respect to any Intellectual Property of any person or entity, (ii) buy or license any Intellectual Property or enter into any agreement with respect to the Intellectual Property of any person or entity other than off-the-shelf software packages and Intellectual Property related to purchased equipment or (iii) enter into any agreement with respect to the joint development of any Intellectual Property with a third party;
(c) Except as required by law enter into or materially amend any existing benefit plans and agreements 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 or technology of the Company or any of its Subsidiaries, grant any severance Subsidiary or termination pay (i) to any executive officer or (ii) to enter into any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices Contract which would have been required to have been disclosed on Sections 2.11 or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements 2.12 of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights Disclosure Schedules had such contract been entered into prior to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rightsdate hereof, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license unless entered into in the ordinary course of businessbusiness consistent with past practice or otherwise permitted by this Article IV;
(d) materially amend or otherwise materially modify (or agree to do so), including non-exclusiveor violate the terms of, enterprise-wide any of the Contracts set forth or site licenses.described in the Company Disclosure Schedules;
(e) Commence commence or settle any material litigation other than (i) for the routine collection of billsprovided, (ii) for software piracy, or (iii) in such cases where that the Company shall seek in good faith determines that failure to commence suit would result resolve, subject to Parent’s approval of any settlement or other resolution, such pending litigation related to employment matters to which it is a party as of the date hereof) other than for collection of debts in the material impairment ordinary course of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto)business;
(f) Declare 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 stockCompany Common Stock, or split, combine or reclassify any of its capital stock Company Common Stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the CompanyCompany Common Stock;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, delivergrant, deliver or sell or authorize or propose the issuance, deliverygrant, grant delivery or sale of, or purchase or propose the purchase of, any shares of its capital stock of the Company or equity securities or interests of any class Subsidiary or any securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue or purchase any such shares or other convertible securities, other than the issuance of shares issuances of Company Common Stock (with Company Rights attached thereto) pursuant to the exercise cash exercises of Company Rights Options currently outstanding;
(h) cause or permit any amendments to the Company Series E Preferred Stock, stock options Charter Documents or warrants outstanding as equivalent organizational documents of the date of this Agreementany Subsidiary;
(i) Causeacquire or agree to acquire by merging or consolidating with, permit or propose by purchasing any amendments to the Company's certificate of incorporation assets or by-lawsequity securities of, except as required or by the terms of any agreement between the Company and other manner, any holder of Company Series E Preferred Stock entered into on business or prior to the date of this Agreementany corporation, partnership, association or other business organization or division thereof;
(j) Sellsell, lease, license, encumber license or otherwise dispose of any of the its properties or assets assets, including the sale of any accounts receivable of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each caseSubsidiaries, except for sales of products in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bankpractices;
(k) Incur incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except third parties or enter into any operating leases other than trade payables incurred in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereofordinary course consistent with past practices;
(l) Except grant any loans to others or purchase debt securities of others or amend the terms of any outstanding loan agreement;
(m) grant any severance or termination pay (in cash or otherwise) to any Employee, including any officer, except pursuant to a contract or agreement disclosed in Section 2.12 hereof;
(n) adopt or, except as required by law or permitted by SECTION 6.1(C)law, adopt or materially amend any Company Scheduled Plan Employee Plan, hire any new director level or increase the salaries or wage rates of officer level employee, enter into any of its employment contract (other than standard employee confidentiality and intellectual property assignment agreements entered into with employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited pay or agree to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of pay any special bonus or special remuneration to any director or employeeofficer (other than the bonuses payable upon the consummation of the transactions contemplated by this Agreement pursuant to the Change-in-Control letters identified in Section 2.5 of the Company Disclosure Schedule, in each case as in effect on the date hereof (the “COC Letters”)), increase the salaries, wage rates, or other compensation of its Employees, or grant any stock-related award (whether payable in cash, shares or otherwise) except annual merit pay increases consistent with past practices to employees other than officers and other Key Employees;
(mo) Revalue any of the assets of the Company or except as required by GAAP, revalue any of its Subsidiariesassets (whether tangible or intangible), including without limitation writing down the value of inventory, inventory or writing off notes or accounts receivable, receivable other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable lawbusiness;
(np) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy satisfy, in an amount in excess of $100,000 (20,000 in any one case) , or $500,000 (50,000 in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001)aggregate, any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than (i) the payment, discharge or satisfaction of ordinary business expenses in the ordinary course of business of liabilities of consistent with past practices, (ii) payments pursuant to Section 5.9 hereof and (iii) payments expressly authorized within the type reflected or reserved against in the Company Financial Statements (or in the notes theretopreceding Sections 4.1(a) through 4.1(o); 41;
(oq) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any material claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money)Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release enter into any licensing (other than non-exclusive end user licenses in the ordinary course of business and on standard terms and conditions), distribution, joint venture, strategic alliance or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company joint marketing or any of its Subsidiaries is a party similar arrangement or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.agreement;
(s) Taketerminate or waive any right or rights which individually or in the aggregate could reasonably be expected to be material in value to the Company;
(t) reduce the amount or scope of any insurance coverage provided by existing policies except that either (i) the Company will enter into a tail policy with respect to its directors and officers liability insurance having policy limits equal to existing policy limits on commercially reasonable terms so long as the Parent has the opportunity to review and consent to such policy (such consent not to be unreasonably withheld or delayed) or (ii) Parent will furnish or cause the Surviving Company to furnish insurance reasonably acceptable to the Company providing for substantially the same coverage for the existing Company’s directors and officers; or
(u) take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(ASections 4.1(a) THROUGH (Rthrough 4.1(t) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedhereof.
Appears in 1 contract
Conduct of Business of the Company. During the period from From the date of this Agreement and continuing hereof until the earlier of the Closing or the termination of this Agreement pursuant to its terms and the Effective Time, the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agreesArticle XI, except as contemplated in this Agreement or expressly consented to the extent that Parent shall otherwise consent in writing (by the Buyer, which consent shall will not be unreasonably withheld withheld, conditioned or delayed)delayed the Company shall, to carry on its business and to shall cause each of its Subsidiaries to carry on to, conduct its business and operations in the usual, regular and ordinary course, and to use and cause each course of its Subsidiaries to use all commercially reasonable efforts business consistent with past practices practice and policies use its reasonable best efforts to (i) preserve intact its present business organizationsorganization, (ii) maintain in effect all material Licenses, (iii) keep available the services of its present members, officers and employees and preserve its key employees, (iv) maintain good relationships with customersits Advisory Clients, suppliers, distributors, licensors, licensees, vendors and others having material business dealings relationships with it and (v) manage its working capital (including the Company or any such Subsidiaries, to timing of collection of accounts receivable and of the end that the goodwill and ongoing businesses payment of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(aaccounts payable) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice. Without limiting the generality of the foregoing, except as set forth in Schedule 7.1, or in order to comply with the express terms and obligations of this Agreement, the Company shall not and shall not permit any of its Subsidiaries to (i) take any action that after the Closing Date it would be prohibited from taking pursuant to Section 5.04 of the Third Amended and Restated Operating Agreement without the consent of a Supermajority of the Management Committee or (ii):
(a) amend its Organizational Documents (whether by merger, consolidation or otherwise);
(b) incur any capital expenditures or any Liabilities in respect thereof, other than any capital expenditures that do not exceed $100,000 individually or $250,000 in the aggregate;
(c) Except as required acquire, sell, lease, license, transfer, pledge, encumber, grant or dispose of (whether by law merger, consolidation, purchase, sale or otherwise) any existing benefit plans and agreements Company Intellectual Property, or enter into any Material Contract, or take any action, with respect to any Company Intellectual Property outside the ordinary course of business consistent with past practice, or do any act or knowingly omit to do any act whereby any material Company Intellectual Property may become invalidated, abandoned, unmaintained, unenforceable or dedicated to the public domain;
(d) make any loans, advances or capital contributions to, or investments in, any other Person;
(e) grant or increase any severance, retention, change-of-control or similar payments to any current or former member, officer, employee or consultant of the Company or any of its Subsidiaries;
(f) hire or terminate senior administrative, grant marketing, portfolio management and supervisory personnel;
(g) extend credit or renew or forgive a previously existing extension of credit (either directly or indirectly) for the benefit of any severance Covered Person;
(h) enter into any Contract that limits or termination pay (i) to otherwise restricts in any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with material respect the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements any Subsidiary of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company their respective Affiliates or any of its Subsidiaries (successor thereto or pursuant that would reasonably be expected, after the Closing, to written agreements negotiated at arm's length) providing for a non-exclusive license entered into limit or restrict in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for respect the routine collection of billsCompany, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, Buyer or any of their affiliatesrespective Affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare from engaging or pay competing in any dividends on or make any other distributions (whether in cash, stock or property) in respect line of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect ofbusiness, in lieu of any location or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, with any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this AgreementPerson;
(i) Cause, permit settle (i) any material Action involving or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of against the Company or any of its Subsidiaries or terminate (ii) any Action that relates to the Contemplated Transactions;
(j) amend, modify or waive any contracts, claims, or rightsrights under, in each caseany material respect, except any Advisory Contract (including by entering into or amending any side letter relating thereto) other than amendments, modifications and waivers in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between that are not adverse to the Company in any material respect (it being understood that, without limitation, the addition of or changes to “most-favored nation” clauses and Silicon Valley Bankchanges in the amount of fees or manner in which fees are computed (e.g. changing from variable fees to fixed fees) shall be deemed adverse changes that are material to the Company);
(k) Incur change any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course method of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax lawaccounting, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of TaxesTax election, file any amended material Return Tax Return, settle or compromise any amendment material Tax liability, agree to a material Returnan extension or waiver of the statute of limitations with respect to the assessment or determination of Taxes, enter into any closing agreement, settle any claim or assessment in agreement with respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension Tax or waiver of the limitation period applicable surrender any right to any claim or assessment in respect of Taxesa material Tax refund; or
(pl) Except for any change which is required by reason of a concurrent change in GAAPagree, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting commit or accounting practice used by it;
(q) Except as otherwise permitted pursuant offer to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which do any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiariesforegoing.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Evercore Partners Inc.)
Conduct of Business of the Company. (a) During the period from the date of this Agreement and continuing hereof until the earlier of the termination of this Agreement pursuant to in accordance with its terms and the Effective Time, except (i) as may be required by applicable Law, including any Covid-19 Measure, or taken in good faith in response to or accordance with any Covid-19 Measure, (ii) with the Company prior written consent of Parent (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld withheld, conditioned or delayed), to carry on its business (iii) as contemplated or required by this Agreement, or (iv) as set forth in Section 5.1(a)(i) of the Company Disclosure Schedule, the Company shall, and to shall cause each of its Subsidiaries to, use commercially reasonable efforts to carry on (A) conduct its business in all material respects in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts course consistent with past practices practice, (B) maintain and policies to preserve intact its present business organizationsorganization, keep available the services of and maintain its present officers existing relations and employees and preserve its relationships goodwill with customers, suppliers, distributors, licensorscreditors, licenseeslessors and tenants, (C) maintain its material assets and others having business dealings with properties in their current condition in all material respects (normal wear and tear and damage caused by casualty or by any reason outside of the Company’s and its Subsidiaries’ reasonable control excepted), (D) maintain all material insurance policies in all material respects, subject to ordinary course expirations, renewals and replacements thereof, (E) maintain the status of the Company or any such Subsidiaries, to as a REIT under the end that Code and (F) take the goodwill actions set forth in Section 5.1(a)(ii) of the Company Disclosure Schedule.
(b) During the period from the date hereof until the earlier of the termination of this Agreement in accordance with its terms and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except , except (i) as expressly provided for may be required by applicable Law, including any Covid-19 Measures, or taken in good faith response to any Covid-19 Measure, (ii) with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (iii) as contemplated or required by this Agreement, or (iv) as set forth in Section 5.1(b) of the Credit Agreement, the Security Agreement, or the Software Distribution AgreementCompany Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to:
(i) amend the Company Organizational Documents or the organizational documents of Company OP or any of the Company’s or Company OP’s respective Subsidiaries;
(ii) split, combine or reclassify any capital stock, voting securities or other equity interests of the Company;
(iii) make, authorize, declare or pay any dividend, or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock, or any other securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock, except (1) for any such transactions solely among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, (2) for (A) the payment of dividends or distributions declared prior to the Effective Time or earlier termination date of this Agreement not to exceed, in the aggregate, twenty one cents ($0.21) per share of Company Common Stock, Company OP Common Unit and Company OP Series A Preferred Unit, respectively, and (B) pursuant to Section 5.15, (3) in connection with the vesting of Company Equity Awards outstanding on the date hereof in accordance with the terms thereof, (4) as may be reasonably necessary for the Company or any of its termsSubsidiaries to maintain its status as a REIT under the Code (collectively, without the prior written consent of Parent (which consent shall not be unreasonably withheld any such dividends or delayed):
(a) Except as provided distributions in this Agreement clause (4), “Additional Dividends”), or (5) as described may be required in the Company Disclosure Schedulesordinary course of business with respect to Normandy Real Estate Fund III, accelerateLP, amend or change Normandy Real Estate Fund IV, LP and Normandy Opportunity Zone Fund, LP (collectively, the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans“Normandy Funds”);
(biv) Enter into grant any Company Equity Awards or other equity-based awards or interests, or grant any individual, corporation or other entity any right to acquire any shares of its capital stock;
(v) issue, sell or otherwise permit to become outstanding any additional shares of its capital stock or securities convertible or exchangeable into, or exercisable for, any shares of its capital stock or any options, warrants, or other rights of any kind to acquire any shares of its capital stock, except (1) pursuant to the due exercise, vesting and/or settlement of Company Equity Awards outstanding as of the date hereof in accordance with their terms, (2) in connection with the exchange of Company OP Common Units or the conversion of the Company OP Series A Preferred Units, in each case outstanding on the date hereof, (3) in transactions solely among the Company and its Subsidiaries or among the Company’s Subsidiaries or (4) as may be undertaken with respect to the Normandy Funds in the ordinary course of business;
(vi) merge or consolidate the Company or any of the Company’s Subsidiaries, or adopt, or permit any of the Company’s Subsidiaries to adopt, a plan of complete or partial liquidation, dissolution, merger, consolidation or other reorganization, other than the Mergers and other than any mergers, consolidations or reorganizations solely among the Company and its Subsidiaries or solely among the Company’s Subsidiaries;
(vii) incur, assume or guarantee (or otherwise become responsible for) any Indebtedness or issue any debt securities, except for (1) Indebtedness for borrowed money among the Company and/or its Subsidiaries or among Subsidiaries of the Company, (2) guarantees by the Company of Indebtedness for borrowed money of Subsidiaries of the Company or guarantees by Subsidiaries of the Company of Indebtedness for borrowed money of the Company or any of its Subsidiaries, which Indebtedness is incurred in compliance with this clause (vii) or is outstanding on the date hereof, and (3) Indebtedness incurred in the ordinary course pursuant to the Existing Credit Agreements;
(viii) other than in accordance with a Company Material Contract in effect as of, and true, correct and complete copies of which have been made available to Parent prior to, the date hereof, sell, pledge, dispose of, transfer, lease, license, abandon, allow to lapse, assign or encumber any of its material properties or material assets, except (i) in connection with any transaction solely between or among the Company and wholly owned Subsidiaries of the Company or (ii) sales, leases or dispositions made in the ordinary course of business (other than as otherwise subject to restrictions under Section 5.1(b)(xvii));
(ix) acquire, make a binding offer to acquire, or commit to acquire, any material partnership arrangementsequity interest in or material properties or assets of any third Person (including by merger, joint development agreements consolidation or strategic alliancesacquisition of stock or assets) other than acquisitions by the Normandy Funds in the ordinary course of business;
(x) except as required by any Company Benefit Plan as in effect on the date of this Agreement, (1) establish, adopt, materially amend or terminate any Company Benefit Plan, except for amendments or terminations in the ordinary course of business that do not materially increase costs, (2) increase in any respect the compensation or benefits of any current or former directors or employees of the Company or any Subsidiary, except for increases in the ordinary course of business consistent with past practicepractices, (3) pay or award, or commit to pay or award, any bonuses or incentive compensation to any current or former directors or employees of the Company or any Subsidiary, other than in the ordinary course of business, (4) enter into any new severance, change-in-control and retention compensation arrangements with any current or former directors, employees or other service providers of the Company or any Subsidiary, including allowing any new employees to become eligible participants in the Company’s Employee Change of Control Severance Protection Plan (as amended) or Executive Change of Control Severance Protection Plan, (5) accelerate any rights or benefits under any Company Benefit Plan, (6) accelerate the time of vesting or payment of any award under any Company Benefit Plan, (7) other than in the ordinary course of business, fund or in any way secure the payment, of compensation or benefits under any Company Benefit Plan, (8) hire any new employee of the Company or any Subsidiary, other than to replace employees who terminate employment following the date of this Agreement upon similar terms as the employee being replaced, other than severance protections, (9) promote or terminate the employment (other than for cause) of any employee of the Company or any Subsidiary at the level of Senior Vice President or above or whose total annual compensation opportunity is equal to or exceeds two hundred and fifty thousand dollars ($250,000) (in the case of promotion, whether before or after such promotion), or (10) enter into or amend any collective bargaining agreement or similar agreement;
(cxi) Except as settle or compromise any claims arising out of legal proceedings against the Company or its Subsidiaries, other than settlements of, or compromises for, any such legal proceedings (after taking into account insurance coverage maintained by the Company or its Subsidiaries) for less than one million dollars ($1,000,000) in the aggregate (except for claims arising out of legal proceedings in respect of Taxes, which shall be governed exclusively by Section 5.1(b)(xii));
(xii) except in each case to the extent required by law Law or as the Company determines is reasonably necessary to preserve the status of the Company as a REIT or to preserve the status of any existing benefit plans of its Subsidiaries as a partnership, disregarded entity, REIT, TRS or QRS for U.S. federal tax purposes, make or change any material Tax election (it being understood and agreements agreed, for the avoidance of doubt, that nothing in this Agreement shall preclude the Company or any of its SubsidiariesSubsidiaries from designating dividends paid by it as “capital gain dividends” within the meaning of Section 857 of the Code), grant settle or compromise any severance material Tax claim or termination pay assessment by any Governmental Entity, change any material accounting method with respect to Taxes, enter into any closing agreement with a Taxing Authority or surrender any right to claim a refund of a material amount of Taxes;
(ixiii) implement or adopt any material change in its financial accounting principles or methods, other than as may be required by GAAP or applicable Law or any Governmental Entity;
(xiv) enter into, amend or modify any Tax Protection Agreement;
(xv) take any action, or fail to take any executive officer action, that would reasonably be expected to cause the Company to fail to qualify as a REIT or any of its Subsidiaries to cease to be treated as a partnership, disregarded entity, REIT, TRS or QRS for U.S. federal tax purposes, as the case may be;
(iixvi) make or authorize, or commit to make or authorize, any capital expenditure, except for (1) capital expenditures not in excess of, in the aggregate, those contemplated by the capital expenditure budget set forth on Section 5.1(b)(xvi) of the Company Disclosure Schedules for the relevant period set forth therein, plus, in the aggregate, five million dollars ($5,000,000), and (2) capital expenditures made, authorized or committed by the Normandy Funds in the ordinary course of business;
(xvii) except in the ordinary course of business or in connection with any transaction to the extent specifically permitted by any other employee except payments made subclause of this Section 5.1(b), (1) enter into any (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices Company Material Contract or (B) a lease, sublease or occupancy agreement of real property under which the Company or any of its Subsidiaries is the landlord or sub-landlord or serves in a similar capacity and is related to the properties on Section 5.1(b)(xvii) of the Company Disclosure Schedule; or (2) materially modify, materially amend, or terminate (other than expirations in accordance with its terms) any (A) Company Material Contract or (B) a lease, sublease or occupancy agreement of real property under which the Company or any of its Subsidiaries is the landlord or sub-landlord or serves in a similar capacity and is related to the properties on Section 5.1(b)(xvii) of the Company Disclosure Schedule or waive, release or assigns any material rights or material claims thereunder (provided, that in the case of each of clause (1)(B) and (2)(B), Parent’s consent shall be deemed to be given pursuant to Section 5.1(b)(ii) if it provides no response or good faith and reasonable request for additional information within ten (10) Business Days after receiving a written agreements outstandingrequest (email sufficient) from the Company for such consent (or, in the case of a request for additional information, within four (4) Business Days of receipt of such information));
(xviii) enter into any new material line of business; or
(xix) resolve or policies existing, on agree to take any of the date hereof and as previously disclosed foregoing actions that are prohibited pursuant to this Section 5.1(b).
(c) Nothing contained in writing to this Agreement shall (i) give Parent or (C) pursuant Merger Sub, directly or indirectly, the right to written agreements consistent with control or direct the past agreements operations of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights prior to the Company Proprietary Rights Effective Time, (including rights to resell or relicense ii) prohibit the Company Proprietary Rightsfrom taking or causing to be taken any action, at any time or from time to time, that in the good faith judgment of the Company is reasonably necessary or appropriate for the Company to maintain its qualification as a REIT, preserve the status of any of its Subsidiaries as a partnership, disregarded entity, REIT, QRS or TRS, as applicable, for U.S. federal income tax purposes, or avoid or reduce the payment or imposition of any income or excise Tax or (iii) or enter into grants to future patent rights, other than on standard forms of require the Company or any of its Subsidiaries to take (or pursuant to written agreements negotiated at arm's lengthnot take) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt the extent taking (or make any personnot taking) such action requires, entity under the organizational or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release governing documents of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" joint venture or similar agreement to which any of the Company or any of its Subsidiaries is a party party, a consent or under which approval from any Person that is not an Affiliate of the Company Company.
(d) During the period from the date hereof until the earlier of the termination of this Agreement in accordance with its terms and the Effective Time, Parent shall not, and shall not permit any of its Affiliates to, (i) knowingly take or fail to take any action that would prevent, materially delay or materially impede the consummation of the Financing, (ii) acquire or agree to acquire by merging or consolidating with, or by purchasing a material portion of the assets or equity of, any Person, or enter into any new line of business, if such action would reasonably be expected to (A) prevent, materially delay or materially impede the obtaining of, or adversely affect in any material respect the ability of Parent or any of its Subsidiaries has Affiliates to procure, any rightsauthorizations, and will use its best efforts consents, Orders, declarations or approvals of any Governmental Entity or the expiration or termination of any applicable waiting period necessary to enforce consummate the transactions contemplated hereby or cause to be enforced each such agreement at (B) materially increase the request risk of Parent. The Company will also promptly request each Person that has executedany Governmental Entity entering an Order, within 12 months prior to ruling, judgment or injunction prohibiting the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf consummation of the Company transactions contemplated hereby, or (iii) take (or fail to take) any action that is intended to or would reasonably be expected to adversely affect or materially delay the ability of Parent or any of its SubsidiariesAffiliates to otherwise perform its covenants and agreements under this Agreement or to consummate the transactions contemplated hereby.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Conduct of Business of the Company. During (a) The Company covenants and agrees that, during the period from the date of this Agreement and continuing until the earlier of the termination of Effective Time and the time that this Agreement pursuant to is terminated in accordance with its terms and the Effective Timeterms, except as otherwise provided in this Agreement, the Company (which for the purposes Plan of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agreesArrangement, except as required by Law or consented to the extent that Parent shall otherwise consent in writing by the Purchaser (which consent shall not be unreasonably withheld or delayed), to carry on its business the Company shall, and to shall cause each of its Subsidiaries to carry on its business the Subsidiary to, conduct the Business in the usual, regular Ordinary Course and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices to maintain and policies preserve intact the current organization and Business and to preserve intact its present business organizationsthe rights, keep available the services franchises, goodwill and relationships of its present officers and employees and preserve its relationships with Employees, customers, lenders, suppliers, distributors, licensors, licensees, regulators and others having business dealings relationships with the Subsidiary. Without limiting the foregoing, from the date hereof until Closing, the Subsidiary shall, and the Company shall use commercially reasonable efforts to cause the Subsidiary to:
(i) preserve and maintain all its material Permits;
(ii) pay its Debts, Taxes and other obligations when due;
(iii) maintain the Assets owned, operated or any such Subsidiaries, to used by the end that Subsidiary in the goodwill and ongoing businesses same condition as they were on the date of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, subject to reasonable wear and tear;
(iv) continue in full force and effect without modification all insurance policies, except as required by applicable Law or as terminated in accordance with their terms;
(v) defend and protect its Assets from infringement or usurpation;
(vi) perform all its material obligations under all Contracts relating to or affecting the Credit AgreementAssets or Business;
(vii) maintain the Books and Records in accordance with past practice;
(viii) not make any loans, the Security Agreementadvances or capital contributions to any Person;
(ix) not (A) make, change or revoke, or permit the Software Distribution AgreementSubsidiary to make, change or revoke, any Tax election, or file or cause to be filed an amended Tax Return unless required by Law as otherwise determined by the Company shall notto be in the best interests of the Subsidiary; (B) make, and shall not or permit the Subsidiary to make, any change in any Tax or accounting methods or policies or systems of its Subsidiaries tointernal accounting controls, prior except to the Effective Time conform to changes in Laws related to Taxes or earlier termination of this Agreement pursuant to its termsaccounting requirements; or (C) hire any Person, all without the prior written consent of Parent (which the Purchaser, such consent shall not be to unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such planswithheld;
(bx) Enter into not (A) terminate (otherwise than for cause) or materially alter or amend the employment or services of any material partnership arrangementsdirector, joint development agreements officer or strategic alliances, except in the ordinary course of business consistent with past practice;
manager or (cB) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive director, officer or (ii) to manager or any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and Employee other than as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstancesrequired by Law;
(dxi) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into comply in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any all material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults respects with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto)all applicable Laws;
(fxii) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize not amend the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the CompanySubsidiary Constating Documents;
(gxiii) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as not materially change the operation of the date hereof and as set forth on SECTION 6.1(G) Business or the regulatory strategy of the Company Disclosure Schedules;Subsidiary; and
(hxiv) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on not take or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the changes, events or conditions described in Section 3.1(h) to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedoccur.
Appears in 1 contract
Samples: Arrangement Agreement (Marizyme Inc)
Conduct of Business of the Company. (a) INTEGRATION; ORDINARY COURSE. In furtherance of integrating the Company and its Subsidiaries with EarthLink (the "OM INTEGRATION"), prior to the Effective Time of the Merger, the Company and its Subsidiaries shall provide to EarthLink and its representatives reasonable and full access (during business hours and upon reasonable advance notice) to the Company's and Subsidiaries' facilities, systems, records, employees (all levels and types) and other personnel as requested by EarthLink. The Company and EarthLink agree to cooperate and communicate in good faith in all aspects of the OM Integration, with principal goals of facilitating the integration of the Company's and Subsidiaries' operations into EarthLink and to minimize the Company's potential contractual default/breaches, costs and other problems arising as a result of the Merger. As part of the OM Integration, the Company and Subsidiary representatives shall cooperate and work in good faith with EarthLink representatives and take commercially reasonable actions in order to identify, minimize and if possible eliminate potential violations (related to or caused by the Merger) of the Company's and Subsidiaries' contracts, agreements and leases, including without limitation working directly with the Company's and Subsidiaries' vendors and other contractual parties for these purposes. As has been disclosed to EarthLink, the Company and its Subsidiaries are currently engaged in a series of integration steps whereby the Company's Subsidiaries and regional operations are to be integrated into the Company's national Internet service plan pursuant to the Company's Integration Plan as provided in writing to EarthLink (the "INTEGRATION PLAN"). During the period from the date of this Agreement and continuing until to the earlier Effective Time of the termination Merger (except as otherwise specifically contemplated by the terms of this Agreement pursuant to its terms and or as set forth in the Effective TimeCompany Disclosure Schedules), the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business the Company's Integration Plan and their respective businesses in the usual, regular and ordinary coursecourse consistent with the Integration Plan and in substantially the same manner as heretofore conducted and, and to use and cause each of its Subsidiaries to the extent consistent therewith, use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present their current business organizations, keep available the services of its present their current officers and employees and preserve its their relationships with customers, suppliers, distributors, licensors, licensees, distributors and others having business dealings with them, in each case consistent with past practice in the Company or any such Subsidiaries, ordinary course of business to the end that the their goodwill and ongoing businesses of Company and each of its Subsidiaries shall be unimpaired to the fullest extent possible at the Effective TimeTime of the Merger. Except The Company shall use its best efforts to sell, transfer or otherwise dispose of its leasehold and other interests in that certain airplane currently leased by the Company. In connection with the Integration Plan, without limiting the generality of the foregoing, and except as otherwise expressly provided for contemplated by this AgreementAgreement or as set forth in the Company Disclosure Schedules, from the Credit Agreementdate hereof until the Effective Time of the Merger, without prior approval from EarthLink in accordance with the Security Agreement, or the Software Distribution Agreementfollowing "APPROVAL Mechanism", the Company shall not, and shall not permit any of its Subsidiaries toof which it owns directly or indirectly more than 50% of the voting or equity interests in to take any of the actions set forth below (the "APPROVAL ITEMS"). The Approval Mechanism shall be as follows: for each proposed Approval Action set forth below, prior a Company representative (the President or his designee) shall contact EarthLink (the President or his designee) via telephone or email with the request and reasonable detail on the proposed Approval Item. EarthLink shall then have two (2) business days after receipt of such request to either approve or deny the proposed Approval Item, which decision shall be communicated by EarthLink to the Effective Time Company via telephone or earlier termination email. A lack of this Agreement pursuant response to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except by EarthLink as required by law or any existing benefit plans and agreements of 5:00 p.m. on the second business day following the request shall be considered an approval for such request. The Approval Items, which are applicable to the Company or any of and its SubsidiariesSubsidiaries as appropriate, grant any severance or termination pay are as follows:
(i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstandingdeclare, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare set aside or pay any dividends on on, or make any other distributions (whether in cash, stock or property) in respect of of, any of its capital stock, other than dividends and distributions by any direct or indirect wholly owned Subsidiary of the Company to the Company or a wholly owned Subsidiary of the Company and immaterial dividends, distributions and other similar transactions involving existing Subsidiaries, (B) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock of the Company;
or (gC) Repurchase purchase, redeem or otherwise acquire, directly or indirectly, acquire any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate any other securities thereof or waive any contracts, claims, or rights, in each casewarrants or options to acquire any such shares or other securities;
(ii) (A) authorize, issue, deliver, sell, pledge or otherwise encumber any securities (equity or debt or otherwise) whatsoever, including without limitation, capital stock, common stock, preferred stock, notes, bonds, debentures and any other securities convertible into capital stock or other securities, including without limitation warrants, options or otherwise (other than pursuant to the Offer Letters, pursuant to Company Options outstanding on the date of this Agreement or pursuant to elections under the Stock Purchase Plan made prior to the date of this Agreement);
(iii) amend the Company's or any Subsidiaries' Articles/Certificate of Incorporation, Bylaws or other governing documents;
(iv) acquire or agree to acquire any business, corporation, partnership, association, joint venture, limited liability company or other entity or division thereof.
(v) incur any obligation for borrowed money, whether or not evidenced by a note, bond, debenture or similar instrument, except for (a) purchase money indebtedness, (b) capitalized leases or operating leases, and (c) such borrowings under the Company existing revolving credit facilities or letters of credit that would add additional outstanding indebtedness of the Company and its Subsidiaries on a consolidated basis of more than $100,000;
(vi) sell, lease, mortgage, pledge or xxxxx x Xxxx on or otherwise encumber or dispose of any of its material properties or assets, except (A) sales of inventory in the ordinary course of business consistent with past practice practice, (B) immaterial liens not relating to the borrowing of money or the incurrence of any monetary obligation and (C) other immaterial transactions not in connection with existing agreements entered into between excess of $100,000 in the Company and Silicon Valley Bankaggregate;
(kvii) Incur make any material indebtedness for borrowed money election relating to Taxes or settle or compromise any material Tax liability;
(other than ordinary course trade payables viii) adopt a plan of complete or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities partial liquidation of the Company or any of its Subsidiaries or guarantee resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization; PROVIDED, HOWEVER, that in connection with the Company's Integration Plan, the Company's Subsidiaries or any debt securities one of othersthem may merge into the Company or any other Company Subsidiary.
(ix) change any material accounting principle used by it, except as required by regulations promulgated by the SEC;
(x) fail to maintain insurance upon all its properties and with respect to the conduct of its business of such kinds and in each case pursuant to existing agreements entered such amounts as is current in effect;
(xi) accelerate the vesting schedule of any options, warrants or any other rights exercisable into between capital stock of the Company or any Subsidiary (except to extent required by the Company's option agreements or warrants and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of Company's Stock Option Plan existing on the date hereof);
(lxii) Except as required by law [reserved];
(xiii) authorize or permitted by SECTION 6.1(C), adopt or amend make any payment to an Affiliate of the Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration pursuant to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim arrangement or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to understanding existing on the date of this AgreementAgreement and disclosed in writing to EarthLink;
(xiv) authorize any cash expenditure for any reason that exceeds $100,000;
(xv) make any earnout or any similar type payments, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or except those set forth on behalf SECTION 3.1(gg) of the Company or Disclosure Schedule; and (xvi) authorize any of its Subsidiaries.
(s) Takeof, or commit or agree in writing or otherwise to taketake any of, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedforegoing actions.
Appears in 1 contract
Samples: Merger Agreement (Earthlink Inc)
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of agrees to conduct its Subsidiaries) agreesbusiness, except to the extent that Parent shall otherwise consent in writing (which such consent shall not to be unreasonably withheld withheld, conditioned or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary coursecourse in substantially the same manner as heretofore conducted, to pay the debts and Taxes of the Company when due (subject to the restrictions 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, use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizations, keep available the services of its the present officers and key employees of the Company and to preserve its the relationships of the Company with customers, suppliers, distributors, licensors, licensees, and others having business dealings with them, all with the Company or any such Subsidiaries, to the end that goal of preserving unimpaired the goodwill and ongoing businesses of the Company and each of its Subsidiaries be unimpaired at the Effective Time. Except The Company shall promptly notify Parent of any event or occurrence or emergency not in the ordinary course of business of the Company and any material event involving the Company that arises during the period from the date of this Agreement and continuing until the earlier of the termination date of this Agreement or the Effective Time. In addition to the foregoing, except as expressly provided for contemplated by this AgreementAgreement or required by applicable Law, and except as expressly set forth in Section 7.1 of the Credit Agreement, the Security Agreement, or the Software Distribution AgreementDisclosure Letter, the Company shall not, and shall cause the subsidiaries of the Company not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Parent, from and after the date of this Agreement:
(a) Except as provided in this Agreement cause or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for permit any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights amendments to the Company Proprietary Rights (including rights to resell certificate of incorporation, bylaws or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock organizational documents of the Company;
(gb) Repurchase or otherwise acquire, directly or indirectly, incur any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, expenditures or enter into other agreements any commitment or commitments of transaction exceeding $50,000 in the aggregate or any character obligating it to issue any such shares commitment or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as transaction of the date of this Agreement;
type described in Section 4.9 hereof (i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable lawpractice);
(nc) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge discharge, waive or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001)satisfy, any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of indebtedness for borrowed money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Samples: Merger Agreement
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until to the earlier of the termination of this Agreement pursuant to its terms and the Effective TimeClosing Date, the Company (which for the purposes shall conduct its respective operations only according to its ordinary and usual course of this SECTION 6.1 shall include the Company and each of business; use its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to to: (a) preserve intact its present business organizations, (b) keep available the services of its present officers and employees and preserve (c) maintain its relationships and goodwill with customerslicensors, suppliers, distributors, licensorscustomers, licenseeslandlords, employees, agents and others having business dealings relationships with it. The Company shall confer with the Company or any such Subsidiaries, Purchaser concerning operational matters of a material nature and report periodically to the end that Purchaser concerning the goodwill business, operations and ongoing businesses finances of Company the Company. Notwith- standing the two immediately preceding sentences, prior to the Closing Date, except as may be first approved in writing by the Purchaser, except for Permitted Payments or Assignments, and each of its Subsidiaries be unimpaired at the Effective Time. Except except as expressly provided for is otherwise permitted or required by this Agreement, the Credit Company shall, (a) refrain from amending or modifying its Certificate of Incorporation or By-Laws from its form on the date of this Agreement; (b) refrain from paying or increasing any bonuses, the Security Agreementsalaries, or other compensation to any director, officer, employee or stockholder or entering into any employment, severance, or similar agreement with any director, officer, or employee; (c) refrain from the Software Distribution Agreementadopting or increasing of any profit sharing, the Company shall notbonus, and shall not permit deferred compensation, savings, insurance, pension, retirement, or other employee benefit plan for or with any of its Subsidiaries toemployees; (d) refrain from entering into any material contract or commitment except material contracts and commitments in the ordinary course of business consistent with past practice; (e) refrain from increasing its indebtedness for borrowed money, prior except current borrowings in the ordinary course of business; (f) refrain from paying its indebtedness; (g) refrain from cancelling or waiving any claim or right of substantial value which individually or in the aggregate is material; (h) refrain from declaring or paying any dividends or other cash distributions to any Seller including, without limitation, dividends or other cash distributions to the Effective Time Sellers to meet any income tax obligations of such Sellers resulting from the Company's status as an "S" corporation; (i) refrain from redeeming, purchasing or earlier termination otherwise acquiring any of its capital stock; (j) refrain from making any material change in accounting methods or practices, except as required by law or generally accepted accounting principles; (k) except for the issuance of an aggregate of 19.742491 shares of Common Stock to the Prospective Stockholders in the amounts described in the preamble to this Agreement (provided that each such Prospective Stockholder shall have, at the time of such issuance, executed and delivered to the Purchaser a counterpart signature page of this Agreement pursuant to its termsand ANNEX I appropriately revised), without the prior written consent refrain from issuing or selling any shares of Parent (which consent shall not be unreasonably withheld capital stock or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stockany other securities, or reprice options granted under the Company Option Plans issuing any securities convertible into, or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter options, warrants or rights to purchase or subscribe to, or entering into any arrangement or contract with respect to the issue and sale of, any shares of its capital stock or any other securities, or making any other changes in its capital structure; (l) refrain from selling, leasing or otherwise disposing of any material partnership arrangements, joint development agreements asset or strategic alliancesproperty; (m) refrain from entering into any commitment for the making of a capital expenditure, except in the ordinary course of business consistent with past practice;
; (cn) Except refrain from writing off as required by law uncollectible any notes or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-lawsaccounts receivable, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except write-offs in the ordinary course of business consistent with past practice charged to applicable reserves, none of which individually or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
material; and (lo) Except as required by law or permitted by SECTION 6.1(C), adopt or amend refrain from agreeing in writing to do any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Conduct of Business of the Company. During the period The Company hereby covenants and agrees that, from the date of this Merger Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company (which for the purposes Company, unless set forth in Section 5.01 of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agreesDisclosure Schedule, except otherwise expressly contemplated by this Merger Agreement or consented to the extent that Parent shall otherwise consent in writing by Acquiror (which consent shall will not be unreasonably withheld or delayedwithheld), to will, and will cause the Subsidiaries to, carry on its business and to cause each of its Subsidiaries to carry on its business their respective businesses only in the usualOrdinary Course of Business in all material respects, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially their respective reasonable best efforts consistent with past practices and policies to preserve substantially intact its present their business organizationsorganizations and Assets, maintain their rights and franchises, keep available the services of its present their current officers and retain key employees and preserve its maintain their current relationships with current customers, suppliers, distributors, licensors, licensees, licensees and others having business dealings with them, and use their respective reasonable best efforts to keep in full force and effect liability insurance and bonds comparable in amount and scope of coverage to that currently maintained. Without limiting the generality of the foregoing, except as otherwise expressly contemplated by this Merger Agreement, as set forth in Section 5.01 of the Company Disclosure Schedule, or any such Subsidiariesas consented to in writing by Acquiror (which consent will not be unreasonably withheld), to from the end that the goodwill and ongoing businesses date of Company and each of its Subsidiaries be unimpaired at this Merger Agreement until the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, Time the Company shall not, and shall not permit any of its the Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed)::
(a) Except as provided (i) increase in this Agreement any manner the compensation or as described fringe benefits of, or pay any bonus to, any director, officer or employee, except for (A) increases or bonuses in the Company Disclosure Schedules, accelerate, amend or change the period Ordinary Course of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except Business and retention arrangements not to exceed in the ordinary course of business consistent with past practice;
aggregate the dollar limit established pursuant to Section 6.07; or (cB) Except as increases required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, Law; (ii) grant any severance or termination pay (other than pursuant to the normal severance practices or existing Agreements of the Company or any Subsidiary in effect on the date of this Merger Agreement as described in Section 5.01(a) of the Company Disclosure Schedule) to, or enter into any severance Agreement with, any director, officer or employee, or enter into any employment Agreement with any director, officer or employee; (iii) establish, adopt, enter into or amend any Plan or Other Arrangement, except as may be required to comply with applicable Law; (iv) pay any material benefits not provided for under any Plan or Other Arrangement; (v) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Plan or Other Arrangement (including the grant of stock options, stock appreciation rights, stock-based or stock- related awards, performance units or restricted stock, or the removal of existing restrictions in any Plan or Other Arrangement or Agreement or awards made thereunder), except for grants in the Ordinary Course of Business or as required under the Agreements set forth in Section 5.01(a) of the Company Disclosure Schedule; or (vi) take any action to fund or in any other way secure the payment of compensation or benefits under any Agreement, except as required under the Agreements set forth in Section 5.01(a) of the Company Disclosure Schedule;
(b) declare, set aside or pay any dividend on, or make any other distribution in respect of, outstanding shares of capital stock (other than a dividend declared or paid by a wholly owned Subsidiary to its parent);
(i) redeem, purchase or otherwise acquire any shares of capital stock of the Company or any Subsidiary or any securities or obligations convertible into or exchangeable for any shares of capital stock of the Company or any Subsidiary, or any options, warrants or conversion or other rights to acquire any executive officer shares of capital stock of the Company or (ii) to any Subsidiary or any such securities or obligations, or any other employee except payments made securities thereof (other than (A) any issuance of Company Common Stock in connection with the termination a cashless exercise of employees who are not executive officers in amounts consistent with the Company's policies and past practices Company Stock Options or Company Warrants, or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed an Agreement set forth in writing to Parent or (CSection 5.01(c) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, Disclosure Schedule); (ii) for software piracy, effect any reorganization or recapitalization (other than the Holding Company Merger described in Section 9.13); or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or 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 capital stock of the Company;
(g) Repurchase or otherwise acquirefor, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedulesstock;
(hd) Except as required by except (i) upon the terms of any agreement between the Company and any holder exercise of Company Series E Preferred Stock entered into on Options or prior Company Warrants in accordance with their terms, or (ii) for grants of Company Stock Options to new or existing employees who are not executive officers in the Ordinary Course of Business, to the date extent that the aggregate number of this Agreementshares of Company Common Stock issuable under such grants (whether or not vested) does not exceed 500,000, issue, deliver, sell award, grant or sell, or authorize or propose the issuance, delivery, award, grant or sale (including the grant of any limitations in voting rights or other Encumbrances) of, any shares of any class of its capital stock of (including shares held in treasury), any class or securities convertible intointo or exercisable or exchangeable for any such shares, or any subscriptions, rights, warrants or options to acquire any such shares, or amend or otherwise modify the terms of any such rights, warrants or options the effect of which shall be to make such terms more favorable to the holders thereof;
(e) except as contemplated by Agreements set forth in Section 5.01(e) of the Company Disclosure Schedule, acquire or agree to acquire, by merging or enter into consolidating with, by purchasing an equity interest in or a portion of the Assets of, or by any other agreements manner, any business or commitments any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any Assets of any character obligating it to issue any such shares or other convertible securities, Person (other than the issuance purchase of shares assets from suppliers or vendors in the Ordinary Course of Business);
(f) sell, lease, exchange, mortgage, pledge, transfer or otherwise subject to any Encumbrance or dispose of, or agree to sell, lease, exchange, mortgage, pledge, transfer or otherwise subject to any Encumbrance or dispose of, any of its Assets, except for sales, dispositions or transfers in the Ordinary Course of Business;
(g) adopt any amendments to its certificate of incorporation, bylaws or other comparable charter or organizational documents (other than amendments required under Section 251(g) of Delaware Law in connection with the Holding Company Stock Merger described in Section 9.13);
(with Company Rights attached theretoh) pursuant make or rescind any express or deemed material election relating to Taxes, settle or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, or change any of its methods of reporting income or deductions for federal income tax purposes from those employed in the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as preparation of the date of this Agreementfederal income tax returns for the taxable year ended December 31, 1998, except in either case as may be required by Law, the IRS or GAAP;
(i) Cause, permit make or propose agree to make (A) any amendments to new capital expenditure or expenditures which are not included in the Company's certificate January '00 through March '01 Cash Flow - 8 Fiber Scenario, a copy of incorporation which was furnished to Acquiror, or by-laws(B) expenditures which are, except as required by individually, in excess of $1,000,000 or, in the terms aggregate, in excess of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement$10,000,000;
(j) Sell, lease, license, encumber (i) incur any indebtedness for borrowed money or otherwise dispose guarantee any such indebtedness of any of the properties or assets of another Person (other than the Company or any of its Subsidiaries or terminate or waive any contractswholly owned Subsidiary), claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness 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 or Subsidiary, guarantee any debt securities of othersanother Person (other than the Company or any wholly owned Subsidiary), enter into any "keep well" or other Agreement to maintain any financial statement condition of another Person (other than the Company or any wholly owned Subsidiary) or enter into any Agreement having the economic effect of any of the foregoing, except for short-term borrowings incurred in each case pursuant to existing agreements entered into the Ordinary Course of Business, or (ii) make any loans, advances or capital contributions to, or investments in, any other Person other than intra-group loans, advances, capital contributions or investments between or among the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in wholly owned Subsidiaries and other than the ordinary course extension of business and consistent with past practices), including but not limited credit to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets customers of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than Subsidiary in the ordinary course Ordinary Course of business consistent with past practice or as required by GAAP or applicable lawBusiness;
(nk) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge discharge, settle or satisfy in an amount in excess of $100,000 any material claims, liabilities or obligations (in any one case) whether absolute or $500,000 (in the aggregate prior to October 1contingent, 2001) matured or $200,000 (in the aggregate in any given calendar month beginning October 1unmatured, 2001known or unknown), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction satisfaction, in the ordinary course Ordinary Course of business Business or in accordance with their terms, of liabilities of the type reflected or reserved against in, or contemplated by, the most recent Financial Statement or incurred in the Company Financial Statements (Ordinary Course of Business, or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change waive any material election in respect of Taxesbenefits of, adopt or change agree to modify in any material respect respect, any accounting method confidentiality, standstill or similar Agreements to which the Company or any Subsidiary is a party;
(l) except in respect the Ordinary Course of TaxesBusiness, file waive, release or assign any rights or claims, or modify, amend or terminate any material Return Agreement to which the Company or any amendment to Subsidiary is a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; orparty;
(pm) Except for make any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used or policy other than those required by it;GAAP or a Governmental Entity; or
(qn) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person fromauthorize, or waive commit or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement agree to which do any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiariesforegoing.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Samples: Merger Agreement (McLeodusa Inc)
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of (i) the termination of this Agreement pursuant to its terms and (ii) the Effective TimeClosing, the Company agrees (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent Komag shall otherwise consent in writing writing) to carry on the Media Business in the normal and ordinary course, to pay the debts related thereto including Accounts Payable and similar obligations in the normal and ordinary course, consistent with past practice, to use all commercially reasonable efforts to preserve intact the Media Business organization, to keep available the services of the present Employees (except Non-Offered Employees) and to preserve its relationships with suppliers and others having business dealings with it, all with the goal of preserving unimpaired the Acquired Assets and the Media Business at the Closing, together with the goodwill associated therewith. The Company shall promptly notify Komag of any event or occurrence or emergency not in the ordinary course of business and any material event involving the Acquired Assets or the Media Business. Except as expressly contemplated by this Agreement or disclosed in Section 5.1 of the Company Disclosure Schedule, the Company shall not, without the prior written consent of Komag (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizations, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayedwithheld):
(a) Except as provided in this Agreement Waive or as described in release any material right or claim arising from or related to the Company Disclosure Schedules, accelerate, amend Media Business or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansAcquired Assets;
(b) Enter into any material partnership arrangementscommitment or transaction involving, joint development agreements relating to or strategic alliances, except in affecting the ordinary course of business consistent with past practice;
(c) Except as required by law Acquired Assets or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are Media Business not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business;
(c) Make any expenditures or commitments for expenditures for the acquisition of Inventory or other assets in excess of $500,000 per transaction to the extent that such expenditures or commitments for expenditures involves, including non-exclusive, enterprise-wide relates to or site licenses.affects the Acquired Assets or Media Business;
(d) Transfer to any Person any rights to the Media Intellectual Property which are to be included within the Acquired Assets or to be licensed to Komag pursuant to the License Agreement; provided that the Company may license any Media Intellectual Property to be licensed to Komag pursuant to the License Agreement to the extent that so doing would not materially adversely affect Komag or the operation of the Acquired Assets or the Media Business following the Closing; ------------------------------------------ "[***]" INDICATES REDACTED INFORMATION FOR WHICH CONFIDENTIAL TREATMENT IS REQUESTED ------------------------------------------
(e) Commence Enter into or amend any material litigation agreements pursuant to which any other than (i) for the routine collection Person is granted marketing, distribution or similar rights of bills, (ii) for software piracy, any type or (iii) in such cases where the Company in good faith determines that failure scope with respect to commence suit would result in the material impairment of a valuable aspect of the business any products of the Company or any of its Subsidiaries, provided that the Company consults produced in connection with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto)Media Business;
(f) Declare Amend or pay otherwise modify in any dividends on material respect (or make any other distributions (whether in cashagree to do so), stock or property) in respect of violate the terms of, any of its capital stockthe agreements, contracts, licenses, permits, leases or split, combine Environmental Permits set forth or reclassify any of its capital stock or issue or authorize described in the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the CompanyCompany Disclosure Schedule;
(g) Repurchase Commence or otherwise acquire, directly settle any litigation that could reasonably be expected to adversely affect the Acquired Assets or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure SchedulesMedia Business;
(h) Except as required Acquire or agree to acquire by the terms of merging or consolidating with, or by purchasing any agreement between the Company and assets or equity securities of, or by any holder of Company Series E Preferred Stock entered into on other manner, any business or prior to the date of any corporation, partnership, association or other business organization or division thereof that includes assets that would constitute Acquired Assets under this Agreement, issue, deliver, sell or authorize otherwise acquire or propose the issuance, delivery, grant or sale of, agree to acquire any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securitiesassets that would constitute Acquired Assets under this Agreement, other than in the issuance ordinary course of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreementbusiness;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber grant any Lien on or otherwise dispose of or encumber any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each caseAcquired Assets, except in the ordinary course for intercompany sale of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities Media Inventory in the ordinary course of business;
(j) Adopt or guarantee amend any such prohibited indebtedness employee benefit plan, or issue enter into any employment contract or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except extend employment offers (in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up only to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(Cextent affecting Employees), adopt pay or amend agree to pay any Company Scheduled Plan special bonus or special remuneration to any Employee, or increase the salaries or wage rates of any of its employees (except for wage increases the Employees, except, in each case, in the ordinary course of business and business, consistent with past practices), including but not limited practices or to (but without limiting the generality extent required by law or to conform any Employee Benefit Plan or Employee Agreement to the requirements of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employeeapplicable law;
(mk) Revalue any of the assets of the Company or any of its SubsidiariesAcquired Assets, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or except as expressly required by GAAP or applicable lawthe Agreement;
(nl) Except as set forth in To the Company Disclosure Schedule extent it may affect the Acquired Assets, the Media Business or as otherwise permitted by the Liability of Komag for Taxes under the terms of this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax lawAgreement, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money)Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(qm) Except as otherwise permitted pursuant Enter into any strategic alliance, development or joint marketing agreement involving, relating to SECTION 6.3, take any action to exempt or make any person, entity affecting the Acquired Assets or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulationMedia Business;
(rn) Release Fail to comply in all material respects with any laws, rules or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior regulations applicable to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction Acquired Assets or equity the Media Business; or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.------------------------------------------ "[***]" INDICATES REDACTED INFORMATION FOR WHICH CONFIDENTIAL TREATMENT IS REQUESTED ------------------------------------------
(so) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(ASections 5.1(a) THROUGH through (Rn) above, or any other action which that would prevent the Company from performing or cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, Company not to be satisfiedperform its covenants hereunder or under the Collateral Documents.
Appears in 1 contract
Conduct of Business of the Company. During (a) Except (i) as required to comply with the express terms of this Agreement or the agreements entered into in connection with this Agreement, (ii) for actions approved by Parent in writing or by email (which approval shall not be unreasonably withheld, conditioned or delayed), (iii) as required by applicable Law or any Governmental Order, (iv) in connection with the actions to be taken by the Company set forth on Section 9.21 of the Company Disclosure Schedule or (v) as set forth in Section 9.1 of the Company Disclosure Schedule, during the period from (and including) the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to in accordance with its terms and or the Effective TimeClosing, the Company shall (which for the purposes of this SECTION 6.1 shall include the Company and each of its SubsidiariesA) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on conduct its business in the usual, regular and ordinary course, course and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices practice and policies (B) use reasonable best efforts to preserve intact its respective present business organizations, keep available retain the services of its respective present officers and key employees and preserve its respective relationships with and the goodwill of customers, suppliers, distributors, licensors, licensees, and others having business dealings with it.
(b) Except (i) as required to comply with the Company express terms of this Agreement (including Sections 9.9 and 9.15) or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by other agreement entered into in connection with this Agreement, (ii) for actions approved by Parent in writing or by email (which approval shall not be unreasonably withheld, conditioned or delayed), (iii) as required by applicable Law or any Governmental Order, (iv) in connection with the Credit Agreementactions to be taken by the Company in connection with the contemplated restructuring of the Company as set forth on Section 9.21 of the Company Disclosure Schedule or (v) as set forth in Section 9.1 of the Company Disclosure Schedule, during the Security Agreement, period from (and including) the date of this Agreement and continuing until the earlier of the termination of this Agreement in accordance with its terms or the Software Distribution AgreementClosing, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed)::
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of Charter Documents: amend the Company LLC Agreement or any certificate of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock formation of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except in each case as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding amended as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Conduct of Business of the Company. During Except as contemplated by this Agreement or as set forth in Section 5.1 of the Company Disclosure Schedule, unless Parent shall otherwise consent in writing (such consent not to be unreasonably withheld or delayed), during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company (which for and each Subsidiary will conduct its respective operations, to the purposes extent commercially reasonable, according to its ordinary and usual course of this SECTION 6.1 shall include business and consistent with past practice, and the Company and each of Subsidiary will use its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve substantially intact its present respective business organizations, to keep available the services of its present respective officers and employees and preserve its to maintain satisfactory relationships with customers, suppliers, distributors, licensors, licensees, suppliers, contractors, distributors, physicians, consultants, customers, and others having material business dealings relationships with it. The Company will promptly advise Parent of any material change in the management, present or planned business, properties, liabilities, results of operations, or financial condition of the Company or any such Subsidiaries, material Subsidiary. The Company will keep Parent reasonably advised on a current basis as to the end that status of the goodwill matters described in Section 3.1 of the Company Disclosure Schedule, and ongoing businesses will not settle, resolve or compromise any of such matters without reasonable prior notice to Parent and after giving due consideration to Parent's recommendations with respect thereto. The Company will, prior to distributing or otherwise circulating any notices, directives, or other communications directed to all or groups of customers, vendors, employees, distributors, or others associated with its business relating to the transactions contemplated hereby or to the operation of business after consummation of such transactions, consult with Parent and each give Parent reasonable opportunity to comment thereon. Without limiting the generality of its Subsidiaries be unimpaired at the foregoing, and except as otherwise expressly provided in or contemplated by this Agreement or as set forth in Section 5.1 of the Company Disclosure Schedule, from the date of the Agreement until the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, neither the Company shall not, and shall not permit nor any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its termsSubsidiary will, without the prior written consent of Parent (which such consent shall not to be unreasonably withheld or delayed):
(a) Except as provided in this Agreement amend its Articles of Incorporation or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansBylaws;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing authorize for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreementissuance, issue, deliversell, sell pledge, or authorize deliver (whether through the issuance or propose the issuancegranting of additional options, deliverywarrants, grant commitments, subscriptions, rights to purchase, or sale of, otherwise) any shares of its capital stock of any class or any securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments shares of stock of any character obligating it to issue any such shares or other convertible securities, class (other than the issuance of shares of Company Common Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of on the date of this Agreement;
(i) CauseAgreement and, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except so long as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any treatment of the properties or assets Merger as a pooling of interests is not jeopardized, the Company or any of its Subsidiaries or terminate or waive any contractsissuance, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practicespractice, of stock options to purchase, at not less than fair market value on the date of grant of such option, a maximum of 50,000 shares of Company Common Stock pursuant to the Company Option Plans in effect on the date of this Agreement and the shares of Company Common Stock issuable pursuant to such stock options), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(mc) Revalue split, combine, or reclassify any shares of the assets its capital stock, declare, set aside, or pay any dividend or other distribution (whether in cash, stock, or property or any combination thereof) in respect of the Company its capital stock; or redeem or otherwise acquire any shares of its capital stock or its other securities; or amend or alter any material term of any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, outstanding securities;
(d) other than indebtedness incurred in the ordinary course of business and consistent with past practice and other than intercompany indebtedness, create, incur or as required by GAAP assume any indebtedness for borrowed money, or applicable lawassume, guarantee, endorse, or otherwise agree to become liable or responsible for the obligations of any other person, or make any loans, advances or capital contributions to, or investments in, any other person; or create, incur or assume any material Lien on any material asset;
(ni) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (increase in any one case) manner the compensation of any of its directors, officers, employees, or $500,000 (consultants, or accelerate the payment of any such compensation, except in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction each case in the ordinary course of business of liabilities of the type reflected and consistent with past practice (including, without limitation, annual year end increases) or reserved against in the Company Financial Statements (consistent with existing contractual commitments or in the notes thereto); 41
(o) Except as required by applicable Tax law, make law (other than accelerated payments customarily made upon termination of employment); (ii) pay or change any material election in respect of Taxes, adopt accelerate or change otherwise modify in any material respect the payment, vesting, exercisability, or other feature or requirement of any accounting method in respect pension, retirement allowance, severance, change of Taxescontrol, file stock option, or other employee benefit not required by any material Return or any amendment to a material Returnexisting plan, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent arrangement to any extension such director, officer, employee or waiver of the limitation period applicable to any claim or assessment in respect of Taxesconsultant; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective Time, the Company (which for agrees to operate the purposes business of this SECTION 6.1 shall include the Company and each to cause its subsidiaries to conduct their respective businesses in the Ordinary Course of its Subsidiaries) agreesBusiness, including with respect to the allocation of employees and other resources to Table of Contents execute on existing SKU plans, except (a) with the prior written consent of Parent or (b) as specifically required by this Agreement. The Company agrees to the extent that Parent shall otherwise consent use all reasonable efforts to comply in writing (which consent shall not be unreasonably withheld or delayed)all material respects with applicable Law, to carry on its business pay or perform all material obligations (including Tax obligations and Contract obligations) when due, to cause each of its Subsidiaries to carry on its business in the usualpreserve or renew existing insurance coverage, regular material Permits and ordinary courseRegistered Intellectual Property, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its the present business organizationsorganizations of the Company, keep available the services of its the present officers and other employees and consultants of the Company and its subsidiaries, preserve the Company’s assets and technology and preserve the material relationships of the Company and its relationships subsidiaries with customers, suppliers, distributors, licensors, licensees, and others having business dealings with them. Subject to compliance with applicable Law, from the Company or any such Subsidiaries, to date of this Agreement until the end that earlier of the goodwill termination of this Agreement and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior confer from time to the Effective Time time as reasonably requested by Parent to meet with one or earlier termination of this Agreement pursuant to its terms, without the prior written consent more representatives of Parent (which consent shall not be unreasonably withheld to discuss any material changes or delayed):
(a) Except as provided in this Agreement or as described developments in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements operational matters of the Company or any and its subsidiaries and the general status of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements ongoing operations of the Company or any and its subsidiaries. The Company shall assure that each of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license Contracts entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to after the date of this AgreementAgreement will not require the procurement of any consent, issuewaiver or novation or provide for any change in the obligations of any Person in connection with, deliver, sell or authorize or propose terminate as a result of the issuance, delivery, grant or sale consummation of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without Merger. Without limiting the generality of the foregoing), except (i) with the adoption prior written consent of Parent, (ii) as otherwise set forth in Schedule 4.1, or amendment of any stock purchase or option plan(ii) as specifically required by this Agreement, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of neither the Company or nor any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, subsidiaries shall from and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to after the date of this AgreementAgreement until the earlier of the termination of this Agreement or the Effective Time:
(a) amend its Organizational Documents;
(b) enter into any new Material Contract, except (A) Contracts providing for the outsourced development (including motion capture, 3D scanning, voice over, music, sound effects, audio, art, programming, quality assurance and testing, cinematics, animation, web design, localization, design and community support) of all or a confidentiality agreement in connection with portion of any Company Product that do not provide for aggregate payments by the Company and its subsidiaries to any third party of more than $100,000 per such Person's consideration of a possible Acquisition Transaction Contract or equity or debt investment $1,000,000 in the Company to return all confidential information heretofore furnished to aggregate; (B) non-exclusive licenses of third party Intellectual Property of less than $50,000 per such Person by Contract or on behalf of $250,000 in the Company or any of its Subsidiaries.
aggregate, (sC) Takenew leases, or agree in writing or otherwise amendments to takeexisting leases, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions with respect to the Merger set forth Company’s facilities in SECTIONS 7.1 OR 7.3Los Angeles, California and Australia (in each case in this clause (C), on terms and conditions consistent with Schedule 4.1(b), and (D) employment agreements, offer letters, compensation arrangements relating to employees or stock option agreements that are not to be satisfied.otherwise prohibited by this Section 4.1;
Appears in 1 contract
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective Time, the Company (which for agrees to conduct the purposes business of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agreesCompany, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)in accordance with Section 4.3 hereof, to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary coursecourse in substantially the same manner as heretofore conducted, to pay the debts and Taxes of the Company when due (subject to use Parent’s review and cause each consent to the filing of its Subsidiaries any Tax Return, as set forth in Section 4.1(e) below), to use all commercially reasonable efforts pay or perform other obligations when due, and, to the extent consistent with past practices and policies such business, to preserve intact its the present business organizationsorganizations of the Company, keep available the services of its the present officers and employees of the Company and preserve its the relationships of the Company with customers, suppliers, distributors, licensors, licensees, and others having business dealings with them, all with the Company or any such Subsidiaries, to the end that goal of preserving unimpaired the goodwill and ongoing businesses business of the Company at the Effective Time. The Company shall promptly notify Parent of any event or occurrence or emergency not in the ordinary course of business of the Company and each any material event involving the Company that arises during the period from the date of its Subsidiaries be unimpaired at this Agreement and continuing until the earlier of the termination date of this Agreement or the Effective Time. Except as expressly provided for contemplated by this Agreement, Agreement and except as expressly set forth in Section 4.1 of the Credit Agreement, the Security Agreement, or the Software Distribution AgreementDisclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (in accordance with Section 4.3 hereof, which consent shall will not be unreasonably withheld or delayeddelayed (such consent shall be deemed unreasonably delayed if not responded to within two Business Days):
(a) Except as provided in this Agreement cause or as described in permit any modifications, amendments or changes to the Company Disclosure Schedules, accelerate, amend Charter Documents or change the period organizational documents of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansSubsidiary;
(b) Enter into undertake any material partnership arrangementsexpenditure, joint development agreements transaction or strategic alliances, except commitment exceeding $50,000 individually or $100,000 in the ordinary course aggregate in any one month or any commitment or transaction of business consistent with past practicethe type described in Section 2.13 hereof;
(c) Except as required by law pay, discharge, waive or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to satisfy any claim, suit or proceeding against Parentliability, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability right or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by itCurrent Balance Sheet;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Samples: Merger Agreement (Taleo Corp)
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company (which for the purposes of this SECTION 6.1 Section 4.1 shall include the Company and each of its Subsidiariessubsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary coursecourse in substantially the same manner as heretofore conducted, to timely pay its debts and Taxes, subject to good faith disputes over such debts or taxes, and on the same payment terms such debts and taxes have historically been paid, to use collect its receivables in the same manner and cause each of its Subsidiaries on the same terms such receivables have historically been collected, to timely pay or perform other material obligations when due, and to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its the Company's present business organizations, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company or any such SubsidiariesCompany, to the end that the Company's goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. The Company shall promptly notify Parent of any event or occurrence not in the ordinary course of business of the Company. Except as expressly provided for by this Agreement, Agreement or as set forth on the Credit Agreement, the Security Agreement, or the Software Distribution AgreementCompany Schedules, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in required by the Company Disclosure SchedulesCompany's benefit plans and agreements, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Stock Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangementsagreements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practicealliance agreements;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its SubsidiariesPlans, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the CompanyParent's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the Company's past agreements of the Company or any of its Subsidiaries under similar circumstances;; 29
(d) TransferOther than in the ordinary course of business, transfer or license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Intellectual Property Rights (including rights to resell or relicense the Company Proprietary Intellectual Property Rights) or enter into grants to future patent rights, other than on the Company's standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a nonEnd-exclusive license User Licenses entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.business consistent with past practices;
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its SubsidiariesCompany's business, provided that the Company Parent consults with the Parent Company prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, except that the Company shall not require the approval of, and shall not be required to obtain Parent's consent consult with, Parent with respect to any claim, suit or proceeding by the Company against Parent, Merger Sub, any other Subsidiary of Parent, Parent or any of their its affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedulesstock;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on Issue, deliver or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant delivery or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than (i) the issuance of shares of Company Capital Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants therefor outstanding as of the date of this Agreement, (ii) up to 11,000 shares of Company Capital Stock issuable to participants in the Stock Purchase Plan consistent with the terms of that Plan, (iii) shares of Company Capital Stock issuable pursuant to the Company Rights Agreement, and (iv) options to purchase up to 100,000 shares of Company Capital Stock granted to non-executive officers of the Company in the ordinary course of business, provided such options vest proportionately over a four year period, do not vest upon the consummation of the Merger or any of the transactions contemplated hereby and have an exercise price equal to the market value of the Company Common Stock on the date of grant;
(i) Cause, permit or propose any amendments to the Company's certificate Certificate of incorporation Incorporation or by-lawsBylaws, except as required by the terms of or amend any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this AgreementMaterial Contract;
(j) Sell, lease, license, encumber or otherwise dispose of any of the Company's properties or assets which are material, individually or in the aggregate, to the business of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each caseCompany, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;practice; 30
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C)law, adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee, other than bonuses reflected on the balance sheet included in the December 31st Financials and bonuses payable in the ordinary course of business pursuant to the provisions contained in the Company Schedules;
(m) Revalue any of the assets of the Company or any of its SubsidiariesCompany's assets, including without limitation writing down the value of inventory, writing off notes or accounts receivable, receivable other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable lawwaive any right of material value;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, payPay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 250,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001aggregate), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements Financials (or in the notes thereto); 41;
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(p) Intentionally take any action, including the acceleration of vesting (except as contemplated under the Company Stock Option Plans) of any options, warrants, restricted stock or other rights to acquire shares of the Company's Capital Stock, which would be reasonably likely to interfere with Parent's ability to account for the Merger as a pooling of interests; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(ASection 4.1(a) THROUGH through (Rp) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3Sections 6.1 or 6.3, not to be satisfied.. 31
Appears in 1 contract
Samples: Merger Agreement (Mastering Inc)
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of (i) the termination of this Agreement pursuant to its terms and (ii) the Effective TimeClosing, the Company agrees (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent Komag shall otherwise consent in writing writing) to carry on the Media Business in the normal and ordinary course, to pay the debts related thereto including Accounts Payable and similar obligations in the normal and ordinary course, consistent with past practice, to use all commercially reasonable efforts to preserve intact the Media Business organization, to keep available the services of the present Employees (except Non-Offered Employees) and to preserve its relationships with suppliers and others having business dealings with it, all with the goal of preserving unimpaired the Acquired Assets and the Media Business at the Closing, together with the goodwill associated therewith. The Company shall promptly notify Komag of any event or occurrence or emergency not in the ordinary course of business and any material event involving the Acquired Assets or the Media Business. Except as expressly contemplated by this Agreement or disclosed in Section 5.1 of the Company Disclosure Schedule, the Company shall not, without the prior written consent of Komag (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizations, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayedwithheld):
(a) Except as provided in this Agreement Waive or as described in release any material right or claim arising from or related to the Company Disclosure Schedules, accelerate, amend Media Business or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansAcquired Assets;
(b) Enter into any material partnership arrangementscommitment or transaction involving, joint development agreements relating to or strategic alliances, except in affecting the ordinary course of business consistent with past practice;
(c) Except as required by law Acquired Assets or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are Media Business not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.;
(ec) Commence Make any material litigation other than (i) expenditures or commitments for expenditures for the routine collection acquisition of billsInventory or other assets in excess of $500,000 per transaction to the extent that such expenditures or commitments for expenditures involves, relates to or affects the Acquired Assets or Media Business;
(iid) for software piracy, Transfer to any Person any rights to the Media Intellectual Property which are to be included within the Acquired Assets or (iii) in such cases where to be licensed to Komag pursuant to the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, License Agreement; provided that the Company consults with the Parent prior may license any Media Intellectual Property to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required licensed to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) Komag pursuant to the exercise of Company Rights License Agreement to the extent that so doing would not materially adversely affect Komag or Company Series E Preferred Stock, stock options or warrants outstanding as the operation of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract Acquired Assets or the payment of any special bonus or special remuneration to any director or employeeMedia Business following the Closing;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of agrees to conduct its Subsidiaries) agreesbusiness, except to the extent that Parent shall otherwise consent in writing (which such consent shall not to be unreasonably withheld withheld, conditioned or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary coursecourse in substantially the same manner as heretofore conducted, to pay the debts and Taxes of the Company when due (subject to the restrictions 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, use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizations, keep available the services of its the present officers and key employees of the Company and to preserve its the relationships of the Company with customers, suppliers, distributors, licensors, licensees, and others having business dealings with them, all with the Company or any such Subsidiaries, to the end that goal of preserving unimpaired the goodwill and ongoing businesses of the Company and each of its Subsidiaries be unimpaired at the Effective Time. Except The Company shall promptly notify Parent of any event or occurrence or emergency not in the ordinary course of business of the Company and any material event involving the Company that arises during the period from the date of this Agreement and continuing until the earlier of the termination date of this Agreement or the Effective Time. In addition to the foregoing, except as expressly provided for contemplated by this AgreementAgreement or required by applicable Law, and except as expressly set forth in Section 7.1 of the Credit Agreement, the Security Agreement, or the Software Distribution AgreementDisclosure Letter, the Company shall not, and shall cause the subsidiaries of the Company not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Parent, from and after the date of this Agreement:
(a) Except as provided in this Agreement cause or as described in permit any amendments to the Company Disclosure Schedulescertificate of incorporation, accelerate, amend bylaws or change other organizational documents of the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansCompany;
(b) Enter incur any expenditures or enter into any commitment or transaction exceeding $50,000 in the aggregate or any commitment or transaction of the type described in Section 4.9 hereof (other than in the ordinary course of business consistent with past practice);
(c) pay, discharge, waive or satisfy, any indebtedness for borrowed money;
(d) except in the ordinary course of business consistent with past practice, pay, discharge, waive or satisfy, any third party expense in an amount in excess of $50,000 in the aggregate, or any other claim, liability, right or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than with respect to such other claim, liability right or obligation, the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the Current Balance Sheet;
(e) adopt or change accounting methods or practices (including any change in depreciation or amortization policies) other than as required by GAAP; 42
(f) make or change any material partnership arrangementsTax election, joint development agreements adopt or strategic allianceschange any Tax accounting method, except enter into any closing agreement with respect to Taxes, settle or compromise any Tax claim or assessment, consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment or file any material amended Tax Return;
(g) 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 in the ordinary course of business consistent with past practice;
(ch) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiariesdeclare, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstandingset aside, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stockCompany Capital Stock, or 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 capital stock of the Company;
(g) Repurchase Company Capital Stock, or repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock except as required byCompany Capital Stock (or options, warrants or other rights exercisable therefor);
(i) (i) increase the salary or other compensation (including equity based compensation whether payable in securities or cash or otherwise) payable or to become payable to any officer of the Company or any other Employee, other than increase to wages and target cash incentive compensation in accordance withthe ordinary course of business or (ii) commit to pay (whether in cash, equity or otherwise) a severance payment, or termination payment or transaction payment to any such Person, except, in each case, payments made pursuant Employee Agreements, Company Employee Plans or other written agreements existing as of outstanding on the date hereof and as set forth on SECTION 6.1(G) of disclosed in the Company Disclosure SchedulesLetter;
(hj) Except as required by sell, lease, license or otherwise dispose of or grant any security interest in any of its properties or assets (whether tangible or intangible, but excluding Intellectual Property Rights), including the sale of any Accounts Receivable, except in the ordinary course of business and consistent with past practices;
(k) make any loan to any Person (other than any tax-qualified retirement plan) or purchase debt securities of any Person or amend the terms of any outstanding loan agreement between other than advances for expenses to service providers of the Company and consistent with past practices;
(l) incur any holder material Indebtedness, guarantee any Indebtedness of Company Series E Preferred Stock entered into on any Person, issue or prior to sell any debt securities, or guarantee any debt securities of any Person;
(m) waive or release any material right or claim of the date Company, including any write-off or other compromise of this Agreementany Accounts Receivable;
(n) commence or settle any lawsuit, threat of any lawsuit or proceeding or other investigation against the Company;
(o) issue, delivergrant, deliver or sell or authorize or propose the issuance, deliverygrant, grant delivery or sale of, or purchase or propose the purchase of, any shares of its capital stock of Company Capital Stock or any class or securities convertible into, exercisable or any exchangeable for, or subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue or purchase any such shares or other convertible securities, other than except for the issuance of shares Company Capital Stock pursuant to the exercise of outstanding Company Options and repurchases of Company Capital Stock (with Company Rights attached thereto) issued pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as Options in accordance with the terms of the date of this Agreementapplicable Company Equity Plan(s) and option agreement(s);
(p) (i) Causeexcept standard end user licenses and software-as-a-service agreements entered into in the ordinary course of business, permit consistent with past practice, sell, lease, license or propose transfer to any amendments Person any rights to any Company Intellectual Property or enter into any agreement or modify any existing agreement with respect to any Company Intellectual Property with any Person or with respect to any Intellectual Property Rights of any Person, (ii) purchase or license any Intellectual Property Rights or enter into any new agreement or modify any existing agreement with respect to the Technology or Intellectual Property Rights of any Person, (iii) enter into any new agreement or modify any existing agreement with respect to the development of any Technology or Intellectual Property Rights with a third party, or (iv) change pricing or royalties set or charged by the Company to its customers or licensees, or the pricing or royalties set or charged by persons who have licensed Technology or Intellectual Property Rights to the Company's certificate ;
(q) enter into or amend any agreement pursuant to which any other party is granted marketing, distribution, development, or similar rights of incorporation any type or by-lawsscope with respect to any Company Product, except as required by in each case excluding modifications or amendments in the ordinary course of business;
(r) 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 agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this AgreementLease Agreements;
(js) Sell, lease, license, encumber amend or otherwise dispose of modify (or agree to do so), or violate the terms of, in any material respect, any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rightsMaterial Contracts, in each casecase excluding modifications or amendments in the ordinary course of business;
(t) acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or equity securities of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets (other than Intellectual Property Rights) which are material, individually or in the aggregate, to the business of the Company;
(u) (i) adopt or amend any Company Employee Plan, except (x) as contemplated by this Agreement, (y) entrances into offer letters and employment or consulting agreements on substantially the forms set forth on Section 4.22(b)(i) of the Disclosure Letter in the ordinary course of business consistent with past practice that do not provide for any equity-based compensation, and (z) amendments required by Law or to conform any such Company Employee Plan or Employee Agreement to the requirements of any applicable Law; or (ii) pay or agree to pay any special bonus or special remuneration of, to any Employee except for (x) payments contemplated in this Agreement, or (y) payments made pursuant to Employee Agreements, Company Employee Plans or other written agreements outstanding on the date hereof;
(v) enter into any strategic alliance, affiliate agreement or joint marketing arrangement or agreement;
(w) except as set forth in Section 7.1(w) of the Disclosure Letter, hire, promote, demote or terminate (other than for cause) any Employees, or request any Employees to resign from the Company;
(x) except in cooperation with Parent or in substantial compliance with guidelines provided by Parent, make any representations or issue any communications (including electronic communications) to Employees regarding any benefits of the transactions contemplated by this Agreement, including any representations regarding offers of employment from Parent or the terms thereof;
(y) alter, or enter into any commitment to alter, its interest in any corporation, association, joint venture, partnership or business entity in which the Company directly or indirectly holds any interest;
(z) cancel, amend or renew any insurance policy except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxespractice; or
(paa) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Taketake, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(ASections 7.1(a) THROUGH (Rthrough 7.1(z) abovehereof, or any other action which that would (i) prevent the Company from performing, or cause the Company not to perform, its covenants hereunder or (ii) cause or would be reasonably likely to cause result in any of its representations and warranties contained herein being untrue or incorrect. Parent acknowledges that any action taken with the conditions written consent of Parent pursuant to this Section 7.1 and after written notification by the Merger Company that such action will constitute a breach of a representation or warranty set forth in SECTIONS Article IV, or that is disclosed in Section 7.1 OR 7.3of the Disclosure Letter, not in each case that causes any representation and warranty set forth in Article IV, as modified by the Disclosure Letter, to be satisfiedinaccurate as of the Closing Date, shall be deemed to not be a breach of such representation or warranty, but only to the extent specifically set forth in the written notification provided by the Company.
Appears in 1 contract
Samples: Merger Agreement (Yext, Inc.)
Conduct of Business of the Company. During the period from the date of this Agreement Date and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, :
(a) the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on conduct its business and to cause each of its Subsidiaries to carry on its business solely in the usual, regular and ordinary course, 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 to use and cause each in compliance with all applicable Legal Requirements;
(b) the Company shall (A) pay all of its Subsidiaries debts and Taxes when due, subject to good faith disputes over such debts or Taxes, (B) pay or perform its other obligations when due, (C) use all commercially reasonable efforts and policies to collect accounts receivable when due and not extend credit outside of the ordinary course of business, (D) use commercially reasonable efforts and policies to sell Company products consistent with past practices as to license, service and maintenance terms, incentive programs, and in accordance with GAAP requirements as to revenue recognition and (E) use its commercially reasonable efforts and policies to preserve intact its present business organizations, keep available the services of its present officers and key employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company or any such Subsidiariesit, to the end that the its goodwill and ongoing businesses of Company and each of its Subsidiaries shall be unimpaired at the Effective Time. Except as expressly provided Closing, provided, however that in no case shall the notification of third parties of the execution of this Agreement for by the purpose of soliciting consent or novation pursuant to the provisions of this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, Agreement constitute a failure to use commercially reasonable efforts and policies;
(c) the Company shall notpromptly notify Acquirer of any change, and shall occurrence or event not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstandingbusiness, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stockchange, occurrence or splitevent which, combine individually or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person fromchanges, or waive or permit the waiver of any provision ofoccurrences and events, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to would reasonably be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely expected to cause any of the conditions to the Merger closing set forth in SECTIONS 7.1 OR 7.3, Article 6 not to be satisfied; and
(d) the Company shall assure that each of its Contracts (other than with Acquirer) entered into after the Agreement Date will not require the procurement of any consent, waiver or novation or provide for any change in the obligations of any party in connection with, or terminate as a result of the consummation of, the First Merger, and shall give reasonable advance notice to Acquirer prior to allowing any Material Contract to lapse or terminate by its terms.
Appears in 1 contract
Conduct of Business of the Company. During Pending the Merger. Except as contemplated by this Agreement or as expressly agreed to in writing by Parent, during the period from the date of this Agreement and continuing until to the earlier of (i) the termination of this Agreement pursuant to its terms and or (ii) the Effective Time, the Company (which for the purposes each of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizations, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant will conduct their respective operations according to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice, and will use commercially reasonable best efforts consistent with past practice and policies to preserve intact its business organization, to keep available the services of its officers and employees and to maintain satisfactory relationships with suppliers, distributors, customers and others having business relationships with it and will take no action which would adversely affect the ability of the parties to consummate the transactions contemplated by this Agreement, or the timing thereof. Without limiting the generality of the foregoing, and except as otherwise expressly provided in this Agreement, prior to the Effective Time, the Company will not nor will it permit any of its Subsidiaries to, without the prior written consent of Parent:
(a) amend any of its Charter Documents or Governing Documents;
(b) authorize for issuance, issue, sell, deliver, grant any options, warrants, stock appreciation rights, or stock issuance rights for, or otherwise agree or commit to issue, sell, deliver, pledge, dispose of or otherwise encumber any shares of any class of its capital stock or any securities convertible into shares of any class of its capital stock, except (i) pursuant to and in accordance with the terms of Company Options outstanding on the Company Measurement Date or granted pursuant 26 31 to clause (iv) below, (ii) pursuant to the ESPP (to the extent shares of Company Common Stock have been paid for with payroll deductions), (iii) pursuant to and in accordance with the terms of Company Warrants outstanding on the Company Measurement Date, or (iv) the grant of Company Options consistent with past practices to new employees, which Company Options will represent the right to acquire no more than 20,000 shares of Company Common Stock per new employee; provided however, that the current form of agreement under the Company Stock Option Plans shall be amended to no longer include any provisions providing for acceleration of vesting upon a change of control, and any other form used by the Company shall be in a form reasonably acceptable to Parent;
(c) Except as required by law subdivide, cancel, consolidate or reclassify any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any shares of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of its capital stock of the Company;
(g) Repurchase or purchase, redeem or otherwise acquire, directly or indirectly, acquire any shares of its own capital stock or of any of its Subsidiaries, except as required by, and otherwise expressly provided in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(d) (i) Causeincur or assume any long-term or short-term debt or issue any debt securities except for borrowings under existing lines of credit in the ordinary course of business consistent with past practice; (ii) assume, permit guarantee, endorse or propose otherwise become liable or responsible (whether directly, contingently or otherwise) for the material obligations of any amendments to other person (other than Subsidiaries of the Company's certificate ); or (iii) make any material loans, advances or capital contributions to, or investments in, any other person (other than to Subsidiaries of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this AgreementCompany);
(je) Sellexcept as otherwise expressly contemplated by this Agreement, lease, license, encumber or otherwise dispose (i) increase in any manner the compensation of (A) any of the properties or assets employee who is not an officer of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each caseSubsidiary (a "NonExecutive Employee"), except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(kB) Incur any material indebtedness for borrowed money (other than ordinary course trade payables of its directors or pursuant to existing credit facilities officers, except in the ordinary course of business, consistent with past practice, after consultation with Parent, (ii) pay or guarantee agree to pay any such prohibited indebtedness pension, retirement allowance or issue other employee benefit not required, or sell any debt securities enter into, amend or warrants or rights agree to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered enter into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan agreement or increase the salaries arrangement with any such director or wage rates of officer or employee, whether past or present, relating to any of its employees (such pension, retirement allowance or other employee benefit, except for wage increases as required to comply with law or under currently existing agreements, plans or arrangements or with respect to NonExecutive Employees, in the ordinary course of business and consistent with past practice; (iii) grant any rights to receive any severance or termination pay to, or enter into or amend any employment or severance agreement with, any employee or any of its directors or officers, except as required by applicable law or with respect to severance or termination pay to NonExecutive Employees in the ordinary course of business, consistent with past practices); or (iv) except as may be required to comply with applicable law, become obligated (other than pursuant to any new or renewed collective bargaining agreement) under any new pension plan, welfare plan, multiemployer plan, employee benefit plan, benefit arrangement, or similar plan or arrangement, which was not in existence on the date hereof, including but not limited to (but without limiting any bonus, incentive, deferred compensation, share purchase, share option, share appreciation right, group insurance, severance pay, retirement or other benefit plan, agreement or arrangement, or employment or consulting agreement with or for the generality of the foregoing), the adoption or amendment benefit of any stock purchase person, or option amend any of such plans or any of such agreements in existence on the date hereof; provided, however, that this clause (iv) shall not prohibit the Company from renewing any such plan, agreement or arrangement already in existence on terms no more favorable to the entering into of any employment contract parties to such plan, agreement or the payment of any special bonus or special remuneration to any director or employeearrangement;
(mf) Revalue except as otherwise expressly contemplated by this Agreement, enter into, amend in any of the assets of the material respect or terminate any Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, Material Contracts other than in the ordinary course of business consistent with past practice;
(g) sell, lease, license, mortgage or dispose of any of its properties or assets, other than (i) transactions in the ordinary course of business consistent with past practice, (ii) sales of assets, for the fair market value thereof, which sales do not individually or in the aggregate exceed $500,000 or (iii) as may be required or contemplated by this Agreement;
(h) except as otherwise contemplated by the Merger, acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of or equity in, or by any other manner, any business or any corporation, limited liability company, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets, other than the acquisition of assets that is in the ordinary course of business consistent with past practice and which are contemplated within the budget previously provided in writing by the Company to the Parent without the prior written consent of Parent, which consent will not be unreasonably withheld;
(i) alter (through merger, liquidation, reorganization, restructuring or in any fashion) the corporate structure or ownership of the Company or any Subsidiary;
(j) authorize or commit to make any material capital expenditures not within the budget previously provided in writing by the Company to Parent without the prior written consent of Parent, which consent shall not be unreasonably withheld;
(k) make any change in the accounting methods or accounting practices followed by the Company, except as required by GAAP generally accepted accounting principles or applicable law;
(l) make any election under any applicable Tax laws which would, individually or in the aggregate, have a Company Material Adverse Effect;
(m) take any action that (without regard to any action taken or agreed to be taken by Parent or any of its Affiliates) would prevent Parent from accounting for the business combination to be effected by the Merger as a pooling-of-interests;
(n) Except as set forth in settle any action, suit, claim, investigation or proceeding (legal, administrative or arbitrative) requiring a payment by the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1its Subsidiaries in excess of $200,000 without the consent of Parent, which consent shall not be unreasonably withheld or delayed;
(o) pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) claims, liabilities or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of claims, liabilities of the type or obligations reflected or reserved against in, or contemplated by, the most recent financial statements (or the notes thereto) of the Company included in the Company Financial Statements (SEC Reports or incurred in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect ordinary course of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxesbusiness consistent with past practice; or
(p) Except for agree or enter into any change which is required by reason of a concurrent change in GAAPcontract, the Company will notagreement, and will not permit any of its Subsidiaries to, change any method of accounting commitment or accounting practice used by it;
(q) Except as otherwise permitted pursuant arrangement to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which do any of the Company or any foregoing; provided, however, that nothing contained herein shall limit the ability of Parent to exercise its Subsidiaries is a party or rights under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Option Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Samples: Merger Agreement (Qlogic Corp)
Conduct of Business of the Company. During the period The Company hereby covenants and agrees that, from the date of this Merger Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, except as set forth in Section 5.01 of the Company (which for Disclosure Schedule, the purposes of Company, unless otherwise expressly contemplated by this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except Merger Agreement or consented to the extent that Parent shall otherwise consent in writing by Acquiror, will, and will cause the Subsidiaries to, carry on their respective businesses only in the Ordinary Course of Business or as contemplated by the US Xchange 10 Year Plan for General Electric Capital Corporation (which consent shall not be unreasonably withheld or delayedthe "Company Budget"), a copy of which was previously furnished to carry on its business and to cause each of its Subsidiaries to carry on its business in the usualAcquiror, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially their respective reasonable best efforts consistent with past practices and policies to preserve intact its present their business organizationsorganizations and Assets, keep available maintain their rights and franchises, retain the services of its present their officers and employees and preserve its maintain their relationships with customers, suppliers, distributors, licensors, licensees, licensees and others having business dealings with them, and use their respective reasonable best efforts to keep in full force and effect liability insurance and bonds comparable in amount and scope of coverage to that currently maintained. Without limiting the generality of the foregoing, except as otherwise consented to in writing by Acquiror or as otherwise expressly contemplated by this Merger Agreement or as contemplated by the Company or any such SubsidiariesBudget, to from the end that the goodwill and ongoing businesses date of Company and each of its Subsidiaries be unimpaired at this Merger Agreement until the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, Time the Company shall not, and shall not permit any of its the Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed)::
(a) Except (i) increase in any manner the compensation or fringe benefits of, or pay any bonus to, any director, officer or employee, except for increases or bonuses in the Ordinary Course of Business to employees who are not directors or officers and except pursuant to existing arrangements previously disclosed to Acquiror; (ii) except as provided set forth in this Agreement or as described in Section 5.01(a)(i) of the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its SubsidiariesSchedule, grant any severance or termination pay (i) other than pursuant to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past normal severance practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements existing Agreements of the Company or any Subsidiary in effect on the date of its Subsidiaries this Merger Agreement as described in Section 5.01(a)(ii) of the Company Disclosure Schedule) to, or enter into any severance Agreement with, any director, officer or employee, or enter into any employment Agreement with any director, officer or employee; (iii) establish, adopt, enter into or amend any Plan or Other Arrangement, except as may be required to comply with Section 6.22 or applicable Law; (iv) pay any benefit not provided for under similar circumstancesany Plan or Other Arrangement; (v) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Plan or Other Arrangement (including the grant of stock options, stock appreciation rights, stock-based or stock-related awards, performance units or restricted stock, or the removal of existing restrictions in any Plan or Other Arrangement or Agreement or awards made thereunder) or (vi) take any action to fund or in any other way secure the payment of compensation or benefits under any Agreement, except as required under the Agreements set forth in Section 5.01(a)(ii) of the Company Disclosure Schedule;
(db) Transferdeclare, license set aside or sell to pay any person dividend on, or entity make any other distribution in respect of, outstanding shares of capital stock;
(i) redeem, purchase or otherwise extend, amend or modify acquire any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms shares of capital stock of the Company or any Subsidiary or any securities or obligations convertible into or exchangeable for any shares of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business capital stock of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of ParentSubsidiary, or any options, warrants or conversion or other rights to acquire any shares of their affiliates, nor shall capital stock of the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on Subsidiary or make any such securities or obligations, or any other distributions securities thereof; (whether in cash, stock ii) effect any reorganization or propertyrecapitalization; or (iii) in respect of any of its capital stock, or 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 capital stock of the Company;
(g) Repurchase or otherwise acquirefor, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedulesstock;
(hd) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell award, grant or sell, or authorize or propose the issuance, delivery, award, grant or sale (including the grant of any limitations in voting rights or other Encumbrances) of, any shares of any class of its capital stock of (including shares held in treasury), any class or securities convertible intointo or exercisable or exchangeable for any such shares, or any subscriptions, rights, warrants or options to acquire, any such shares, or enter into other agreements amend or commitments otherwise modify the terms of any character obligating it such rights, warrants or options the effect of which shall be to issue make such terms more favorable to the holders thereof;
(e) acquire or agree to acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the Assets of, or by any such shares other manner, any business or any corporation, partnership, association or other convertible securitiesbusiness organization or division thereof, or otherwise acquire or agree to acquire any Assets of any other Person (other than the issuance purchase of shares assets from suppliers or vendors in the Ordinary Course of Company Stock Business);
(with Company Rights attached theretof) pursuant sell, lease, exchange, mortgage, pledge, transfer or otherwise subject to any Encumbrance or dispose of, or agree to sell, lease, exchange, mortgage, pledge, transfer or otherwise subject to any Encumbrance or dispose of, any of its Assets, except for sales, dispositions or transfers in the exercise Ordinary Course of Company Rights Business;
(g) adopt any amendments to its articles or Company Series E Preferred Stockcertificate of incorporation, stock options bylaws or warrants outstanding as other comparable charter or organizational documents;
(h) make or rescind any express or deemed election relating to Taxes, settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, or change any of its methods of reporting income or deductions for federal income tax purposes from those employed in the preparation of the date of this Agreementfederal income tax returns for the taxable year ended December 31, 1999, except in either case as may be required by Law, the IRS or GAAP;
(i) Causemake or agree to make any new capital expenditures which are not included in the Company Budget, permit or propose any amendments it being understood that the Company shall provide prior notice to the Company's certificate of incorporation or by-laws, except as required by the terms Acquiror of any agreement between the Company budgeted expenditures which are individually in excess of $250,000 and any holder unbudgeted expenditures which are individually in excess of Company Series E Preferred Stock entered into on or prior to the date of this Agreement$25,000;
(j) Sell, lease, license, encumber or otherwise dispose of (i) incur any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or of another Person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries or Subsidiary, guarantee any debt securities of othersanother Person, enter into any "keep well" or other Agreement to maintain any financial statement condition of another Person or enter into any Agreement having the economic effect of any of the foregoing, except in each case for borrowings pursuant to existing agreements entered into the Promissory Note, or (ii) make any loans, advances or capital contributions to, or investments in, any other Person other than intra-group loans, advances, capital contributions or investments between or among the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, wholly owned Subsidiaries other than in the ordinary course Ordinary Course of business consistent with past practice or as required by GAAP or applicable lawBusiness;
(nk) Except as set forth in except for costs incurred by the Company Disclosure Schedule or as otherwise permitted in connection with the transactions contemplated by this SECTION 6.1Merger Agreement but only to the extent such costs are deducted pursuant to the calculation of Merger Consideration in Article II hereof, pay, discharge discharge, settle or satisfy in an amount in excess of $100,000 any claims, liabilities or obligations (in any one case) whether absolute or $500,000 (in the aggregate prior to October 1contingent, 2001) matured or $200,000 (in the aggregate in any given calendar month beginning October 1unmatured, 2001known or unknown), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction satisfaction, in the ordinary course Ordinary Course of business Business or in accordance with their terms, of liabilities of the type reflected or reserved against in, or contemplated by, the most recent Financial Statement or incurred in the Company Financial Statements (Ordinary Course of Business, or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change waive any material election in respect of Taxesbenefits of, adopt or change agree to modify in any material respect respect, any accounting method in respect of Taxesconfidentiality, file any material Return standstill or similar Agreements to which the Company or any amendment to Subsidiary is a material Returnparty;
(l) except in the Ordinary Course of Business, enter into waive, release or assign any closing agreement, settle any claim rights or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money)claims, or consent modify, renew, amend or terminate any Agreement to which the Company or any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; orSubsidiary is a party;
(pm) Except for make any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used or policy other than those required by itGAAP or a Governmental Entity;
(qn) Except as otherwise permitted pursuant to SECTION 6.3, take any action or fail to exempt take any action that would have a Company Material Adverse Effect prior to or make any person, entity or action (other than Parent) not subject to after the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person fromEffective Time, or waive or permit that would adversely affect the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any ability of the Company or any of its Subsidiaries is a party Subsidiary prior to the Effective Time, or under which the Company Acquiror or any of its Subsidiaries has any rightssubsidiaries after the Effective Time, and will use its best efforts to enforce obtain consents of third parties or cause approvals of Governmental Entities required to be enforced each such agreement at consummate the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of transactions contemplated in this Merger Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.; or
(so) Takeauthorize, or commit or agree in writing or otherwise to take, do any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedforegoing.
Appears in 1 contract
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective Time, the Company (which for agrees to operate the purposes business of this SECTION 6.1 shall include the Company and each of to cause its Subsidiaries) agreesSubsidiaries to conduct their respective businesses, except (w) as required by Law, (x) as specifically disclosed in Section 4.1 of the Disclosure Schedule, (y) with the prior written consent of Parent or (z) as specifically contemplated by this Agreement, in the ordinary course consistent with past practice. The Company agrees to use reasonable best efforts (A) to pay and to cause its Subsidiaries to pay indebtedness for borrowed money and Taxes of the Company and its Subsidiaries when due (subject to the right of Parent to review and approve certain Returns in accordance with this Agreement), (B) to pay or perform other material obligations when due, and (C) to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)consistent therewith, to carry on its business and to cause each of its Subsidiaries to carry on its business in preserve substantially intact the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizationsorganizations of the Company, keep available the services of its the present officers and employees Employees of the Company and its Subsidiaries, preserve substantially intact the Company’s assets and technology and preserve its the relationships of the Company with customers, suppliers, distributors, licensors, licensees, and others having business dealings with them, all with the Company or any such Subsidiaries, to the end that goal of preserving unimpaired the goodwill and ongoing businesses of the Company and each of its Subsidiaries be unimpaired at the Effective Time. Except Without limiting the generality of the foregoing, except (i) as required by Law, (ii) as expressly provided for contemplated by this Agreement, (iii) as expressly set forth in Section 4.1 of the Credit Agreement, the Security AgreementDisclosure Schedule, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without (iv) with the prior written consent of Parent (which consent in the case of clauses (j), (m) (with respect to non-officer Employees of the Company), (n), (q), (r) or (s)(ii) below or as set forth on Section 4.1 of the Disclosure Schedule shall not be unreasonably withheld withheld, conditioned or delayed):), neither the Company nor any of its Subsidiaries shall from the date of this Agreement until the earlier of the termination of this Agreement or the Effective Time:
(a) Except as provided in this Agreement make any capital expenditure or as described enter into any capital commitment or capital transaction exceeding $250,000 individually or $500,000 in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansaggregate;
(bi) Enter sell or license or transfer to any Person any rights to any Company Intellectual Property or Technology or enter into any material partnership arrangementsagreement with respect to any Company Intellectual Property or Technology with any Person or with respect to any Intellectual Property Rights or Technology of any Person (other than pursuant to existing Contracts on their current terms or non-exclusive licenses of the Company Products that have been entered into in the ordinary course of business consistent with past practice that do not contain any of the terms described in Section 4.1(b) of the Disclosure Schedule), joint (ii) buy or license any Intellectual Property Rights or enter into any agreement with respect to the Intellectual Property Rights or Technology of any third party (other than pursuant to existing Contracts on their current terms or Contracts that have been entered into in the ordinary course of business consistent with past practice that do not contain any of the terms described in Section 4.1(b) of the Disclosure Schedule), (iii) enter into any agreement with respect to the development of any Intellectual Property Rights or Technology with a third party (other than development agreements in which the Company retains ownership of such Intellectual Property Rights or strategic alliances, except Technology entered into in the ordinary course of business consistent with past practice) or (iv) amend or modify any existing agreement to add terms that would be prohibited by clauses (i), (ii) and (iii) of this Section 4.1(b);
(c) Except as required by law enter into, terminate or any existing benefit plans and agreements extend, or materially amend, waive, modify, or violate the terms of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or Material Contract (that is not otherwise included in Section 4.1(b)), (ii) any Contract that would have been required to any other employee except payments made (A) have been disclosed in connection with Section 2.12 of the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant Disclosure Schedule had such Contract been entered into prior to written agreements outstanding, or policies existing, on the date hereof and as previously or (iii) any Contract that would have been required to have been disclosed in writing Section 2.15 of the Disclosure Schedule had such Contract been entered into prior to Parent or the date hereof (C) pursuant to written agreements in each case, other than in the ordinary course of business consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstancespractice);
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rightsexcept as set forth in Section 4.1(d) or enter into grants to future patent rights, other than on standard forms of the Company Disclosure Schedule or in accordance with Section 5.4(d) hereof, initiate any of its Subsidiaries (litigation or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence settle any material litigation other than (i) litigation specifically reserved against on the Current Balance Sheet (for amounts not in excess of such reserves or, in any event, not in excess of $250,000 in any individual case or $500,000 in the routine collection of bills, aggregate) so long as such litigation is settled in cash only and paid by the Company in full prior to the Closing or (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of enforce its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto)rights under this Agreement;
(fe) Declare declare, set aside, or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any Company Capital Stock or any capital stock of any Subsidiary of the Company (other than dividends and distributions by a direct or indirect wholly-owned Subsidiary of the Company to its capital stockparent), or split, combine or reclassify any of its Company Capital Stock or any capital stock of any Subsidiary of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of Company Capital Stock or shares of any capital stock of any Subsidiary of the Company;
(g) Repurchase , or repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its Company Capital Stock or shares of any capital stock except as required by, and in accordance with, of any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) Subsidiary of the Company Disclosure Schedules(or options, warrants or other rights exercisable therefor), except for the issuances of Company Capital Stock pursuant to exercises of Company Options or Company Warrants in accordance with their terms;
(hf) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreementissue, issuegrant, deliver, sell sell, or purchase or authorize or propose the issuance, grant, delivery, grant purchase or sale of, any shares of its Company Capital Stock or shares of any capital stock of any class Subsidiary of the Company or any securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it any of them to issue or purchase any such shares or other convertible securities, other than the issuance of shares (i) issuances of Company Capital Stock (with Company Rights attached thereto) pursuant to the exercise exercises of Company Rights Options or Company Series E Preferred Stock, stock options or warrants outstanding as Warrants in accordance with their terms and (ii) issuances set forth in Section 4.1(f) of the date Disclosure Schedule;
(g) cause or permit any amendments to the Charter Documents or the certificate of this Agreementincorporation, bylaws or other organizational documents of the Company’s Subsidiaries;
(h) acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or equity securities of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets that are material, individually or in the aggregate, to the Company’s business or any of its Subsidiaries’ businesses, other than purchases of investment assets in the ordinary course of business consistent with past practice;
(i) Causeenter into any agreement to purchase or sell any interest in real property, permit grant any security interest in real property, enter into any lease, sublease, license or propose other occupancy agreement with respect to any amendments to the Company's certificate real property or alter, amend, modify or terminate any of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this AgreementLease Agreements;
(j) Sell, lease, license, encumber (i) incur any indebtedness or otherwise dispose guarantee any indebtedness for borrowed money (other than indebtedness not in excess of $2,000,000 (which may include the factoring of receivables) or in connection with the financing of ordinary course trade payables consistent with past practice) or (ii) issue or sell any debt securities or guarantee any debt securities or other obligations of the properties others or assets of the Company or create a Lien over any of its Subsidiaries assets (other than a Permitted Lien, a Lien that is released (without material liability for such release) at or terminate prior to Closing or waive a Lien resulting from the factoring of receivables described in clause (i) of this Section 4.1(j);
(k) grant any contractsloans to others, claimspurchase debt securities of others or amend the terms of any outstanding loan agreement, or rightsother than (i) intercompany loans, in each case, except (ii) accounts receivables extensions in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(kiii) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant advances of expenses to existing credit facilities employees in the ordinary course of businessbusiness consistent with past practice;
(l) grant any severance or guarantee termination pay (in cash or otherwise) to any such prohibited indebtedness or issue or sell Employee, including any debt securities or warrants or rights to acquire debt securities officer, of the Company or any of its Subsidiaries or guarantee any debt securities of othersSubsidiaries, except in each case payments made pursuant to existing agreements entered into between the Company Employee Plans set forth in the Disclosure Schedule and Silicon Valley Bank up provided to the aggregate amount that is borrowed thereunder as of Parent or to written agreements outstanding on the date hereofhereof and disclosed in the Disclosure Schedule;
(lm) Except except as required by law set forth in Section 4.1(m) of the Disclosure Schedule, hire or permitted by SECTION 6.1(C)offer to hire any Employee or terminate any Employee other than for cause without the prior written consent of Parent;
(n) make any representations or issue any communications to employees regarding offers of employment from Parent without the prior written consent of Parent;
(o) (i) adopt, adopt amend or amend fail to maintain any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices)Employee Plan, including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering enter into of any employment contract (other than at-will offer letters for new hires made in accordance with Section 4.1(m) and which do not provide for any severance, special bonus, special remuneration or the payment acceleration of equity), (ii) pay or agree to pay any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets Employee of the Company or any of its SubsidiariesSubsidiaries except as set forth in Section 4.1(o) of the Disclosure Schedule, or (iii) increase or agree to increase the salaries, wage rates, or other compensation or benefits of their respective Employees except payments made pursuant to this Agreement or pursuant to written agreements outstanding on the date hereof and disclosed in the Disclosure Schedule;
(p) revalue any of its assets (whether tangible or intangible), including without limitation writing down the value of inventory, writing off notes or accounts receivable, settle, discount or compromise any accounts receivable, or reverse any reserves, in each case, other than in the ordinary course of business consistent with past practice and in accordance with GAAP or as otherwise required by GAAP or applicable lawGAAP;
(nq) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy satisfy, in an amount in excess of $100,000 (250,000 in any one case) , or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001)aggregate, any claim, liability liability, loan or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type specifically reflected on or specifically reserved against in the Company Financial Statements (or in the notes thereto); 41Current Balance Sheet;
(or) Except as required by applicable Tax law, make or change any material election in respect of TaxesTax election, adopt or change in any material respect any Tax accounting method in respect of Taxes, file any material Return or any amendment to a material Returnmethod, enter into any closing agreementagreement or Tax ruling, settle or compromise any material Tax claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money)assessment, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment assessment, or file any material Return or any amended Return unless such Return has been provided to Parent for review within a reasonable period prior to the due date for filing and Parent has consented to such filing;
(s) enter into any (i) joint venture or similar arrangement or (ii) joint marketing or any similar arrangement (other than pursuant to existing Contracts on their current terms or Contracts that are entered into in the ordinary course of business consistent with past practice, subject to the limitations set forth in Section 4.1(b) hereof);
(t) adopt or change the Company’s accounting policies or procedures, including with respect of Taxesto reserves for excess or obsolete inventory, doubtful accounts or other reserves, depreciation or amortization policies or rates, billing and invoicing policies, or payment or collection policies or practices, in each case, except as required by GAAP; or
(pu) Except for any change which is required by reason of a concurrent change in GAAPtake, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, commit or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(ASections 4.1(a) THROUGH (R) abovethrough 4.1(t), or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedinclusive.
Appears in 1 contract
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective TimeTime of the Merger, the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usualordinary course in substantially the same manner as conducted prior to the date of this Agreement and, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts the extent consistent with past practices and policies such business, use its best efforts to preserve intact its present business organizations, keep available the services of its present officers and employees material service providers and preserve its relationships with material customers, suppliers, distributors, landlords, creditors, licensors, licensees, and others having material business dealings relationships with it. The Company shall promptly notify Parent of any event or occurrence not in the Company ordinary course of business of the Company, and any event, circumstance or any such Subsidiaries, condition which to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries Company's knowledge could reasonably be unimpaired at the Effective Timeexpected to have a Material Adverse Effect. Except as expressly provided for contemplated by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its termsCompany, without the prior written consent of Parent (which consent or Merger Sub, shall not be unreasonably withheld or delayed):and shall not permit any of its subsidiaries to:
(a) Except as provided in this Agreement amend or as described in waive any of its rights under or permit the Company Disclosure Schedules, accelerate, amend acceleration of vesting or change the period of exercisability of options any options, warrants, stock or restricted stockpurchase right, or reprice options granted under change the Company Option Plans eligibility for participation in the Company's and its subsidiaries stock option plans, or permit or authorize cash payments in exchange for such options, warrants, stock or purchase rights (except in the case of net exercise provisions included in any options granted under any warrants as of such plansthe date hereof invoked by the holder thereof);
(b) Enter into make any material partnership arrangements, joint development agreements or strategic alliancescapital expenditure, except as in accordance with its existing capital budget, previously disclosed to Parent, and for an aggregate purchase price not exceeding $50,000 individually or $300,000 in the aggregate.
(c) Grant any severance or termination pay to any service provider, except mandatory payments made pursuant to standard written agreements outstanding on the date hereof or not exceeding two weeks of such service provider's salary (with any such agreement or arrangement to be disclosed in SCHEDULE 3.18);
(d) Transfer to any person or entity any rights to the Company Intellectual Property Rights, except non-exclusive licenses of Intellectual Property Rights in connection with the sale of Company products in the ordinary course of business consistent with past practice;
(ce) Except as required by law Enter into or amend any existing benefit plans and agreements pursuant to which any other party is granted marketing or other similar rights of any type or scope with respect to any products of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in outside the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.business and consistent with past practice;
(ef) Commence Amend, waive any material litigation rights in respect of, or terminate or otherwise modify the terms of any contract listed in SCHEDULE 3.15 or enter into any contract which would be required to be listed on SCHEDULE 3.15;
(g) Except with prior consent of Parent, commence a lawsuit other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(fh) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of the Company or its subsidiaries' capital stock, or split, combine or reclassify any of its or its subsidiaries' capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of the Company or its subsidiaries' capital stock of the Company;
(g) Repurchase stock, or repurchase or otherwise acquire, directly or indirectly, any shares of the Company or its subsidiaries' capital stock except as required by, and repurchases of Company Common Stock at cost from former service providers in accordance with, with the terms of agreements providing for the repurchase of shares in connection with any agreements existing as termination of service to the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure SchedulesCompany;
(hi) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on Issue, deliver or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant delivery or sale of or authorization of, the purchase of any shares of the Company's or its subsidiaries' capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it the Company or its subsidiaries' capital stock to issue any such shares or other convertible securities, other than the issuance of shares of the Company Common Stock (with Company Rights attached thereto) pursuant to upon the exercise of the Company Rights Options or the Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this AgreementWarrants;
(ij) Cause, Cause or permit or propose any amendments to the Company's certificate Articles of incorporation Incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this AgreementBylaws;
(jk) Acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the Business Condition of the Company;
(l) Sell, lease, license, encumber license or otherwise dispose of any of the its properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business or lend to or invest in any person or entity (except routine advances to employees in the ordinary course of business not exceeding $5,000 in respect of any employee and $50,000 in the aggregate, or its acquisition of Company Common Stock for promissory notes in accordance with the Company's stock option plans and consistent with past practice or in connection with existing agreements entered into between investments and loans to the Company and Silicon Valley Bank;Company's wholly owned subsidiaries).
(km) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except for the incurrence of indebtedness in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the an aggregate amount that is borrowed thereunder as not to exceed an additional $100,000 under the Company's existing line of the date hereof;credit with Xxxxxxx Xxxxx in accordance with past practice.
(ln) Except as required by law or permitted by SECTION 6.1(C), adopt (i) Adopt or amend any Company Scheduled Plan Plan, or (ii) enter into any employment contract, (iii) pay or grant any special bonus or special remuneration to any service provider, or increase the salaries or wage rates of its employees other than pursuant to scheduled employee reviews under the Company's normal employee review cycle or pursuant to the Company's existing bonus plans, as the case may be, in all cases consistent with past practice, or (iv) otherwise increase or modify the compensation or benefits payable or to become payable by the Company to any of its employees (service providers, except for wage increases changes pursuant to employment agreements in effect as of the date hereof or changes in position or (v) hire any new employees whose aggregate compensation is expected to exceed $125,000 individually or $1,000,000 in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employeeaggregate;
(mo) Revalue any of the assets of the Company or any of its Subsidiariesassets, including including, without limitation limitation, writing down the value of inventory, writing off notes inventory or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(np) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, payPay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business consistent with past practice, of liabilities of the type reflected or reserved against in the Company Company's Unaudited Financial Statements Statements;
(q) Make or change any Tax election, other than in the notes thereto); 41
(o) Except as required by applicable ordinary course of business and consistent with past practice, or adopt any material Tax lawaccounting method other than in the ordinary course of business and consistent with past practice, make or change any material election in respect of TaxesTax accounting method, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return Tax return (other than any estimated tax returns, payroll tax returns or sales tax returns) or any amendment to a material ReturnTax return, enter into any closing agreement, settle any Tax claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulationassessment;
(r) Release Engage in any activities or permit transactions that are outside the release ordinary course of its business consistent with past practice;
(s) Fail to pay or otherwise satisfy its material monetary obligations as they become due or consistent with past practice, except such as are being contested in good faith;
(t) Terminate, waive or commit to waive or terminate any Person fromrights of value in excess of $25,000.
(u) Cancel, reduce the coverage under or otherwise amend or, other than in the ordinary course upon expiration of a policy term, renew any material insurance policy;
(v) Alter, or waive enter into any commitment to materially alter, its interest in any corporation, association, joint venture, partnership or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under business entity in which the Company directly or indirectly holds any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to interest on the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.hereof; or
(sw) Take, or agree (in writing or otherwise otherwise) to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedthis Section 5.1.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Credence Systems Corp)
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until to the earlier of Closing Date, each Shareholder will cause the termination of this Agreement pursuant to its terms Company to, and the Effective TimeCompany will, the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of conduct its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business operations only in the usual, regular Ordinary Course of Business (including managing its working capital in accordance with its past practice and ordinary course, custom) and to use and cause each of its Subsidiaries to use all commercially reasonable respective best efforts consistent with past practices and policies to to: preserve intact its present the Company's business organizations, keep available the services of its present the Company's officers and employees and preserve its maintain the Company's relationships and goodwill with customerslicensors, suppliers, distributors, licensorscustomers, licenseeslandlords, employees, agents and others having business dealings relationships with the Company or any such Subsidiaries, Company. During the period from the date of this Agreement to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution AgreementClosing, the Company shall notwill confer with Buyer concerning operational matters of a material nature and report periodically to Buyer concerning the Company's business, operations and shall finances and will deliver all Monthly Financial Statements to Buyer not permit any previously delivered to Buyer on or prior to the date hereof. Without limiting the generality or effect of its Subsidiaries tothe foregoing, prior to the Effective Time or earlier termination of this Agreement pursuant to its termsClosing Date, without except with the prior written consent of Parent (which consent shall Buyer, the Company will not, and the Shareholders will cause the Company not be unreasonably withheld or delayed):to:
(a) Except as provided in Amend or modify its articles of incorporation, bylaws or any other organizational document from its form on the date of this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansAgreement;
(b) Enter Change any salaries or other compensation of, or pay any bonuses to any current or former director, officer, employee or shareholder of the Company, other than the bonuses described on SCHEDULE 5.1, or enter into any material partnership arrangementsemployment, joint development agreements severance, or strategic alliancessimilar agreement with any current or former director, except officer, shareholder or employee of the Company, provided, however, that the compensation of employees of the Company receiving annual compensation of less than $50,000 may be changed in the ordinary course Ordinary Course of business consistent with past practiceBusiness;
(c) Except as required by law Adopt or increase any existing benefit plans and agreements of the Company benefits under any Plan for or with any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstancesemployees;
(d) TransferEnter into any contract or commitment with respect to capital expenditures, license except for those capital expenditures that are set forth on SCHEDULE 5.1 and that do not, individually or sell to any person or entity or otherwise extendin the aggregate, amend or modify any rights to provide for payment by the Company Proprietary Rights (including rights to resell of $50,000 or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.more;
(e) Commence Except as contemplated by Section 5.1(d), enter into any material litigation other than contract or commitment except contracts and commitments (i) for the routine collection of bills, (ii) for software piracy, capital expenditures or (iiiotherwise) in such cases where the Company Ordinary Course of Business (and in good faith determines that failure to commence suit would result in any case not exceeding the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent dollar amounts with respect theretoto specified categories of contracts in Section 3.1.11);
(f) Declare Modify or pay amend in any dividends on material respect or make terminate any other distributions (whether contract listed or required to be listed in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the CompanySCHEDULE 3.1.11;
(g) Repurchase Incur, assume or guarantee Indebtedness or pay any Related Party Indebtedness;
(h) Enter into any transaction or commitment relating to the assets or the business of the Company which, individually or in the aggregate, could reasonably be expected to be material to the Company, or cancel or waive any claim or right of substantial value which, individually or in the aggregate, could reasonably be expected to be material to the Company, or amend any term of any Company Securities;
(i) Set aside or pay any dividend or make any other distribution with respect to any Company Securities or repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this AgreementSecurities ;
(j) Make any change in accounting methods or practices (including changes in accruals or reserve amounts or policies);
(k) Issue or sell any Company Securities or make any other changes in its capital structure, including the grant of any stock option or other right to purchase Company Securities;
(l) Sell, lease, license, encumber lease or otherwise dispose of any of the properties material asset or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employeeproperty;
(m) Revalue Except as expressly permitted under this Agreement, write-off as uncollectible any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than except write-offs in the ordinary course Ordinary Course of business consistent with past practice Business charged to applicable reserves, none of which individually or as required by GAAP in the aggregate is material; write-off, write-up or applicable lawwrite-down any other material asset of the Company; or alter its customary time periods for collection of accounts receivable or payments of accounts payable;
(n) Except as set forth in the Company Disclosure Schedule Create or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in assume any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, Lien other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41Permitted Liens;
(o) Except as required by applicable Tax lawMake any loan, make advance or change any material election in respect of Taxes, adopt capital contributions to or change investment in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; orPerson;
(p) Except for Terminate or close any change which is required by reason material facility, business or operation of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by itCompany;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or Cause any other potentially applicable anti-takeover event, occurrence, development or similar statute state of circumstances or regulationfacts which, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect;
(r) Release or permit the release of Take any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which action that would cause any of the representations and warranties made by the Company or any of its Subsidiaries is a party or under which the Company Shareholder in this Agreement not to remain true and correct or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement conditions set forth in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.Section 7.1 from being satisfied;
(s) Take, Settle any claim or agree in writing or otherwise litigation that could reasonably be expected to take, be material to the Company; or
(t) Agree to do any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedforegoing.
Appears in 1 contract
Samples: Stock Purchase Agreement (General Automation Inc/Il)
Conduct of Business of the Company. (a) During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective TimeClosing, the Company Seller shall (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent Buyer shall otherwise consent in writing (writing, which consent shall will not be unreasonably withheld withheld, conditioned or delayed), ) cause the Company and the Company shall agree to carry on its business diligently in the ordinary course consistent with past practice, pay its debts when due and to cause each of pay its Subsidiaries to carry on Taxes when due, pay or perform its business in the usual, regular other obligations when due and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizationsmaintain in full effect the Company Permits, keep available and maintain the services assets used in the Business in good operating condition and repair, maintain the business organization of its present officers and employees the Company intact and preserve its relationships with customers, the goodwill of the suppliers, distributorscontractors, licensors, licenseesEmployees, customers, distributors and others having business dealings relations with the Company, make available to Buyer Xxxx Xxxxxxxx (or an officer knowledgeable about the Business designated by the Company should Xxxx Xxxxxxxx become unavailable for reasons beyond the control of Xxxx Xxxxxxxx or any such Subsidiariesthe Company), upon reasonable prior notice to the end Company, and in a manner that reasonably minimizes the goodwill and ongoing businesses interference with Xxxx Xxxxxxxx’x performance of his duties to the Company and each the disruption to the Company’s business activities, and not terminate the services of its Subsidiaries be unimpaired at Xxxx Xxxxxxxx. During the Effective Time. Except as expressly provided for by period from the date of this Agreement, Agreement and continuing until the Credit Agreement, earlier of the Security Agreement, termination of this Agreement or the Software Distribution AgreementClosing, the Company Seller shall not, and shall cause the Company and its respective Affiliates not permit any of its Subsidiaries to, prior and the Company agrees not to, attempt to persuade or solicit any Employee other than Xxxxxx Xxxxx, or any individual who devotes a majority of his or her time to the Effective Time Business, not to continue his or her employment or engagement, as the case may be, with the Company after the Closing.
(b) Without limiting the generality of Section 6.1(a), except as required by applicable Law, required by this Agreement or as set forth in Exhibit E, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant or the Closing, without the written consent of Buyer (which will not be unreasonably withheld, conditioned or delayed and which may only be withheld with respect to acts that would be reasonably expected to have a Company Material Adverse Effect), Seller agrees that it will cause the Company, and the Company agrees, not to:
(i) make any fundamental change in the Business or operations of the Company with respect to the Business;
(ii) adopt any amendment to its certificate of formation, limited liability company agreement or other applicable governing documents;
(iii) sell, pledge, lease, dispose of, grant or encumber any of its property, including the Real Property, or any of its assets or equity interests in any other Person, except for (A) sales of current assets in the ordinary course of business consistent with past practice, (B) Permitted Encumbrances and (C) other sales that do not exceed, individually or in the aggregate, Fifty Thousand and no 00/100 Dollars ($50,000.00);
(iv) exercise any option to purchase, sell or lease (whether as lessor or lessee) real property or any option to extend a lease of real property (except for any extension of a lease of real property, which, by its terms, without occurs automatically and which does not change the prior written consent terms of Parent (which consent shall not be unreasonably withheld or delayed):such lease);
(av) Except as provided in this Agreement incur, assume, or modify any Indebtedness;
(vi) except for that senior secured indebtedness as described in Exhibit E, cancel any debts owed to or claims held by the Company Disclosure Schedules, accelerate, amend with respect to the Business (including the settlement of any claims or change litigation) other than debts owed or claims held which do not exceed individually or in the period of exercisability of options or restricted stockaggregate Fifty Thousand and no 00/100 Dollars ($50,000.00), or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(cvii) Except except for the Licensing Agreement and the Lease as described in Exhibit E, and other than as required by law applicable Law or the terms of a Material Contract, materially modify or amend, or terminate any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, Material Contracts other than on standard forms supplier or vendor contracts for the purchase or lease of the Company goods or any of its Subsidiaries (services modified, amended or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into terminated in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.;
(eviii) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or subject any of its Subsidiariesproperties, provided that assets or equity interests to a Lien, other than Permitted Encumbrances and Liens in existence on the Company consults with date of this Agreement;
(ix) fail to maintain the Parent prior insurance coverage relating to the filing of such a suit and keeps Parent advised Real Property existing as of the status and details date of execution of this Agreement (however, in the event that any such litigation (provided that, notwithstanding the foregoingcoverage shall be terminated or shall lapse, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding procure substantially similar substitute insurance policies in at least such amounts and against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect theretosuch risks as are currently covered by such policies);
(fx) Declare authorize for issuance, issue, sell or pay deliver (A) any dividends on equity or make voting interest in the Company or (B) any other distributions (whether in cashsecurities convertible into, stock or property) in respect of any of its capital stockexchangeable for, or splitevidencing the right to subscribe for or acquire either (1) any equity or voting interest in the Company, combine or reclassify (2) any of its capital stock securities convertible into, exchangeable for, or issue evidencing the right to subscribe for or authorize the issuance of acquire any other securities equity or voting interest in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(gxi) Repurchase split, combine, redeem, reclassify, purchase or otherwise acquire, directly or indirectly, any shares equity or voting interest in the Company, or make any other change in the capital structure of its the Company;
(xii) acquire any business or Person, by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions;
(xiii) make any capital stock expenditure or commitment therefor, enter into any capital leases or otherwise acquire any assets or properties, except in accordance with the capital expenditure budget included in Exhibit E;
(xiv) modify or rescind any of the Company Permits, or fail to use good faith efforts to obtain any renewal or extension, as may be required by Law, of any Company Permits;
(xv) subject the Company to any bankruptcy, receivership, insolvency or similar proceedings;
(xvi) make any change in any method of accounting or auditing practice other than those required by GAAP;
(xvii) prepare, amend or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods (including positions, elections or methods which would have the effect of deferring income to periods, or otherwise increase Tax liability of a period, for which Buyer is liable pursuant to Section 6.12 or accelerating deductions to periods, or decreasing any tax, attributable to periods, for which the Company is liable pursuant to Section 6.12);
(xviii) make any loans, advances or capital contributions to, or investments in, any other Person other than advances to Employees for incidental expense reimbursements in the ordinary course of business;
(xix) enter into any transaction with any Affiliate or Affiliated Person;
(xx) adopt or, except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by applicable Law or the terms of any agreement between Company Benefit Plan or with respect to amendments that do not materially increase the Company’s expense, or materially decrease the coverage or available benefits under, the applicable Company and Benefit Plan, amend any holder of Company Series E Preferred Stock entered into Benefit Plan;
(xxi) except (A) as required by any Contract or any Company Benefit Plan, in each case, as in effect on or prior to the date of this Agreement, issueor (B) as required by applicable Law, deliveraward or increase any bonuses, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible intosalaries, or other compensation to any subscriptionsEmployee, rights, warrants other than any increases in compensation or options benefits to acquirenon-officer Employees in an aggregate amount not in excess of Fifty Thousand and no 00/100 Dollars ($50,000.00) (exclusive of applicable payroll taxes and other withholding charges), or enter into other agreements or commitments of amend or modify any character obligating it to issue employment, severance or similar Contract with any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this AgreementEmployee;
(iA) Causeterminate the employment of or hire any individual whose annual compensation exceeds or is reasonably expected to exceed Fifty Thousand and no 00/100 Dollars ($50,000.00), permit or propose any amendments to (B) within ninety (90) days before the Company's certificate expected Closing Date, terminate the employment of incorporation or by-laws, except as required by more than 10% of the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this AgreementEmployees;
(jxxiii) Sell, lease, license, encumber or otherwise dispose of enter into any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (Contract that would constitute a Material Contract other than ordinary course trade payables supplier or pursuant to existing credit facilities vendor contracts for the purchase or lease of goods or services in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(lxxiv) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable Company’s current policies or practices relating to the extension of credit to customers;
(xxv) except for that artwork, collectibles or other memorabilia as described in Exhibit E, remove any claim artwork, collectibles or assessment in respect of Taxesother memorabilia; or
(pxxvi) Except for any change which is required by reason of a concurrent change in GAAPauthorize, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting commit or accounting practice used by it;
(q) Except as otherwise permitted pursuant agree to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any foregoing actions in respect of its Subsidiaries which it is a party or under which restricted by the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date provisions of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its SubsidiariesSection 6.1.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Samples: Membership Interest Purchase Agreement (Full House Resorts Inc)
Conduct of Business of the Company. During Except as expressly contemplated by this Agreement (including the period consummation of the Restructuring Transactions in accordance with the Restructuring Transactions Step Plan and the MSSR Transfer) or any other Transaction Agreement or as required by applicable Law, from and after the date of this Agreement and continuing until the earlier of the Subservicing Termination Date or the termination of this Agreement pursuant to in accordance with its terms and the Effective Timeterms, the Company shall (which for the purposes of this SECTION 6.1 and Parent and Seller shall include cause the Company to), and shall cause each of its Subsidiaries) agreesother Group Company to, except as set forth on Section 7.1 of the Disclosure Schedules or as consented to the extent that Parent shall otherwise consent in writing by Buyer (which consent shall not be unreasonably withheld withheld, conditioned or delayed), to carry on its business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizations, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided subject to the terms of the Restricted Subservicing Agreement, continue their Mortgage Loan servicing activities, pricing and payment policies, in this Agreement or as described all material respects in the Company Disclosure SchedulesOrdinary Course of Business (but solely with respect to the Subsequent Transfer Purchased Assets after the Closing Date), accelerateexcept for changes reasonably made with a view to complying or otherwise adhering with the requirements of HAMP or other similar Law applicable to mortgage services generally or to best practices as in effect from time to time (which are made in accordance with the terms of the Restricted Subservicing Agreement), amend (b) use reasonable best efforts to preserve substantially intact its business organization and to preserve the present commercial relationships with key Persons with whom it does business, and (c) not do any of the following whether through a single transaction or change the period a series of exercisability of options transactions:
(i) declare, set aside or restricted stockpay a dividend on, or reprice options granted under the Company Option Plans make any other distribution of Purchased Assets or authorize cash payments in exchange for any options granted under any of such plansRestricted Servicing Rights;
(bii) Enter into commence, settle or compromise any material partnership arrangementsAction or threatened Action that, joint development agreements individually or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements aggregate, would be reasonably expected to adversely affect in a material way the post-Closing operation of the Company Business (or the Purchased Assets, Restricted Servicing Rights and Assumed Liabilities, taken as a whole) or business of OFC or any of its Affiliates (provided that Seller and its Subsidiaries, grant including the Company, may enter into any severance settlement or termination pay compromise with a Governmental Entity that imposes terms or conditions not substantially more onerous to the Company or its Subsidiaries than the terms and conditions imposed by such Governmental Entity in settlements or compromises with any one or more of the Top Mortgage Servicers);
(iiii) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination issue, sell, transfer, pledge, grant, dispose of, encumber or deliver any equity securities of employees who are not executive officers in amounts consistent with the Company's policies and past practices any class or any securities convertible into or exercisable or exchangeable for voting or equity securities of any Group Company of any class or (B) pursuant to written agreements outstandingadjust, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify reclassify, or subject to recapitalization, any of its capital stock or issue or authorize the issuance equity securities of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Group Company;
(giv) Repurchase dissolve or otherwise acquire, directly liquidate or indirectly, permit or allow the filing of a petition for relief under any shares of its capital stock except as required by, and in accordance with, any agreements existing as provisions of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure SchedulesUnited States Bankruptcy Code with respect to any Group Company;
(hv) Except as required by the terms of merge or consolidate itself or any agreement between the Group Company and with any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible intoother Person, or restructure, recapitalize, reorganize or adopt any subscriptionsother corporate or legal entity reorganization, rights, warrants otherwise alter its legal structure or options to acquire, form or enter into other agreements completely or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreementpartially liquidate;
(ivi) Causetransfer, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sellsell, lease, exclusively license, encumber surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of or subject to any Lien (other than Permitted Liens), any Purchased Assets or Restricted Servicing Rights outside the Ordinary Course of the properties or Business, except for assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rightswith a purchase price, in each casethe aggregate, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bankless than $1,000,000;
(kvii) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt waive or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (Restricted Servicing Agreement in any one case) manner that would directly or $500,000 (indirectly result in Buyer being unable to subservice the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001Restricted Servicing Rights as contemplated by Section 2.5(g), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(pviii) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to takedo anything contained in this clause (c); provided, however, that, notwithstanding anything to the contrary in Section 7.1, the Company shall be entitled to enter into any settlement agreement or similar agreement or contract in connection with the settlement of any Action to the actions described in SECTION 6.1(A) THROUGH extent such action would not be prohibited by clause (Rc) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Conduct of Business of the Company. During (a) The Company covenants and agrees that, during the period from the date of this Agreement and continuing Effective Date until the earlier of (i) the Share Swap Record Date and (ii) the termination of this Agreement pursuant to in accordance with its terms and the Effective Time(such period, the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees“Pre-Closing Period”), except to (A) as expressly contemplated by this Agreement, (B) as required by applicable Law or (C) with the extent that Parent shall otherwise prior written consent in writing of Buyer (which consent shall will not be unreasonably withheld or delayed), the Company shall conduct, and shall cause the U.S. Subsidiary to carry on its business and to cause each of its Subsidiaries to carry on conduct, its business in the usual, regular ordinary course of business consistent in all material respects with past practice and ordinary coursein compliance with all applicable Laws, and shall, to use and cause each of its Subsidiaries to use all commercially reasonable efforts the extent consistent with past practices and policies to therewith, (1) preserve intact its present current business organizationsorganization, keep available the services of (2) maintain its present officers assets and employees properties in good repair and preserve condition, (3) maintain its relationships relations with customers, supplierssuppliers and other Persons with which it has material business relations, distributors(4) pay its Liabilities and Taxes when due, licensors, licensees(5) keep in full force all insurance policies and (6) make capital expenditures substantially on the timetable and in the amounts approved by the Company Board prior to the date hereof (together with any other additional capital expenditures approved by the Company Board after the date hereof).
(b) During the Pre-Closing Period, and others having business dealings with except as may otherwise be required by applicable Law, the Company shall not directly or indirectly, take any such Subsidiaries, action that is intended to or that would reasonably be expected to (i) materially adversely affect or materially delay the end that the goodwill and ongoing businesses ability of Company to obtain any necessary approvals of any Governmental Entity necessary for the consummation of the transactions contemplated hereby or to perform its covenants or agreements set forth herein, (ii) cause its representations and each of its Subsidiaries warranties set forth in Article IV to be unimpaired at untrue or incorrect in any material respect or (iii) otherwise, individually or in the Effective Time. Except as expressly provided for by this Agreementaggregate, have a Material Adverse Effect.
(c) During the Credit Agreement, the Security Agreement, or the Software Distribution AgreementPre-Closing Period, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent Buyer (which consent shall will not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules), accelerate, amend or change the period of exercisability of options or restricted stockterminate, or reprice options granted under the Company Option Plans or authorize cash payments amend in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangementsrespect, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with Contract between the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof one hand, and as previously disclosed in writing to Parent or any Service Provider, on the other hand (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfereach such Contract, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates“Service Contract”), nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether payments to any Service Provider that are inconsistent with the Company’s past practices in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock terms of the Company;
(g) Repurchase timing, frequency or otherwise acquire, directly or indirectly, any shares amount of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiariespayments.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until to the earlier of the termination of this Agreement pursuant to its terms and the Effective TimeClosing Date, the Company (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except subsidiaries shall conduct its operations only according to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business ordinary and to cause each usual course of business; use its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizations, keep available the services of its present officers and employees and preserve maintain its relationships and goodwill with customerslicensors, suppliers, distributors, licensorscustomers, licenseeslandlords, employees, agents and others having business dealings relationships with it; subject to applicable laws relating to the exchange of information, confer with the Company or any such Subsidiaries, Parent concerning operational matters of a material nature and report periodically to the end that Parent concerning the goodwill business, operations and ongoing businesses financial condition of the Company and each of its Subsidiaries subsidiaries. Notwithstanding the immediately preceding sentence, prior to the Closing Date, except as may be unimpaired at first approved in writing by the Effective Time. Except Parent or as expressly provided for is otherwise permitted or required by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall notshall, and shall not permit any cause each of its Subsidiaries subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in refrain from amending or modifying its Certificate of Incorporation or ByLaws from its form on the date of this Agreement or as described in the Company Disclosure SchedulesAgreement, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter refrain from paying or increasing any bonuses, salaries, or other compensation to any director, officer, employee or stockholder or entering into any material partnership arrangementsemployment, joint development agreements severance, or strategic alliancessimilar agreement with any director, except officer, or employee other than, in each case, in the ordinary course of business consistent with past practice;
, (c) Except as required by law refrain from the adopting or increasing of any existing profit sharing, bonus, deferred compensation, savings, insurance, pension, retirement, or other employee benefit plans and agreements of the Company plan for or with any of its Subsidiariesemployees, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transferrefrain from entering into any material contract or commitment except material contracts and commitments in the ordinary course of business consistent with past practice, license or sell to any person or entity or otherwise extend(e) refrain from increasing its indebtedness for borrowed money, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into except current borrowings in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare refrain from cancelling or pay waiving any claim or right of substantial value which, individually or in the aggregate, is material, (g) refrain from declaring or paying any dividends on or make any other distributions (whether in cash, stock or property) in respect of its capital stock or redeeming, purchasing or otherwise acquiring any of its capital stock, (h) refrain from making any material change in accounting methods or splitpractices, combine except as required by law or reclassify generally accepted accounting principles, (i) other than in connection with the exercise of Options, refrain from issuing or selling any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquireany other securities, directly or indirectlyissuing any securities convertible into, or options, warrants or rights to purchase or subscribe to, or entering into any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on arrangement or prior contract with respect to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or issue and sale of, any shares of its capital stock of or any class or securities convertible intoother securities, or making any subscriptionsother changes in its capital structure, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sellother than inventory sold in the ordinary course of business, leaserefrain from selling, license, encumber leasing or otherwise dispose disposing of any asset or property having a value in excess of $100,000 in the properties aggregate, unless pursuant to an existing contract or assets commitment to do so which has been listed on Schedule 3.11 attached hereto, (k) refrain from entering into any commitment for the making of the Company a capital expenditure in excess of $100,000, (l) refrain from writing off as uncollectible any notes or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each caseaccounts receivable, except write-offs in the ordinary course of business consistent with past practice charged to applicable reserves, none of which individually or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
material and (lm) Except as required by law or permitted by SECTION 6.1(C), adopt or amend refrain from agreeing in writing to do any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company agrees (which for except as contemplated by this Agreement, including without limitation, the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except Recapitalization Merger Agreement or to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries writing) to carry on its business in the usual, regular and ordinary coursecourse in substantially the same manner as heretofore conducted, to pay its debts and Taxes when due, to use and cause each of its Subsidiaries pay or perform other obligations when due, and, to the extent consistent with such business, to use all commercially reasonable efforts consistent with past practices practice and policies to preserve intact its present business organizationsorganization, keep available the services of its present officers and key employees and preserve its relationships with customers, suppliers, independent contractors, distributors, licensors, licensees, and others having business dealings with it, all with the Company or any such Subsidiaries, to the end that the goal of preserving unimpaired its goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired business at the Effective Time. Except as expressly provided for by Following the date of this Agreement, the Credit Agreement, Company shall promptly notify Parent of any materially negative event related to the Security Agreement, Company or the Software Distribution business of the Company. Without limiting the foregoing, except as expressly contemplated by this Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Parent:
(a) Except Enter into any material Contract or any discovery collaboration agreement, other than the Recapitalization Merger Agreement and as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such planscontemplated thereby;
(b) Enter into any material partnership arrangements, joint development agreements commitment or strategic alliances, except transaction not in the ordinary course of business consistent with past practice, other than the Recapitalization Merger Agreement and as contemplated thereby;
(c) Except as required by law Transfer, assign or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) license to any executive officer Person or (ii) entity any material rights to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances’s Proprietary Rights;
(d) TransferEnter into any material Contracts (or material amendments thereto) pursuant to which any unrelated third party is granted marketing, license distribution or sell similar rights of any type or scope with respect to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms products of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.Company;
(e) Commence Amend or otherwise modify, or violate the terms of, any material litigation of the Contracts set forth or described in Section 4.16 of the Disclosure Schedule nor in any event, amend the terms of any option plan, option agreement or similar instrument of the Company, other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior pursuant to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Recapitalization Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto)Agreement;
(f) Declare Commence any litigation;
(g) 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, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock of the Company;
(g) Repurchase or other equity interests, or repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by(or options, and warrants or other rights exercisable therefor) other than issuances of Company Stock pursuant to the Recapitalization Merger Agreement or issuances of Company Stock pursuant to Company Warrants or Company Options in accordance with, any agreements existing existence as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Scheduleshereof;
(h) Except for the issuance of shares of Company Stock pursuant to the Recapitalization Merger or upon exercise of presently outstanding Company Options (as required by the terms of any agreement between to which the Company shall deduct and withhold such amounts as it is required to deduct and withhold under any holder provision of federal, state, local or foreign Tax law) or the Company Series E Warrants or upon conversion of outstanding Company Preferred Stock entered into on or prior to the date of this Agreement, issue, delivergrant, deliver or sell or authorize or propose the issuance, deliverygrant, grant delivery or sale of, or purchase or propose the purchase of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreementany Voting Debt;
(i) Cause, Cause or permit or propose any amendments to its Restated Certificate of Incorporation or Bylaws, other than the Company's certificate filing of incorporation or by-laws, except as required by the terms of any agreement between the Amended Company Certificate and any holder of Company Series E Preferred Stock entered into on or prior pursuant to the date of this Recapitalization Merger Agreement;
(j) Acquire or agree to acquire by merging or consolidating with or by purchasing any assets or equity securities of or by any other manner, any business or any Person or division thereof, or otherwise acquire or agree to acquire any assets in an amount in excess of $25,000 in the case of a single transaction or in excess of $50,000 in the aggregate;
(k) Sell, lease, license, encumber lease or otherwise dispose of any of the its properties or assets of the Company or assets;
(l) Incur any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, Indebtedness for borrowed money except in the ordinary course of business consistent with past practice and in any event not in excess of $25,000 for any single occurrence or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables transaction or pursuant to existing credit facilities in the ordinary course related series of business) occurrences or transactions, or guarantee any such prohibited indebtedness Indebtedness or issue or sell any of its debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others; provided, except in each case however, that the Company may borrow additional funds from BCC pursuant to existing agreements entered into between the Company and Silicon Valley Bank up terms of the BCC Notes (such additional funds, the “Additional BCC Funds”). For the purposes of this Agreement, “Indebtedness” of any Person means all obligations of such Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures or similar instruments, (iii) for the deferred purchase price of goods or services (including trade payables or accruals incurred in the ordinary course of business), (iv) under capital leases or (v) in the nature of guarantees of the obligations described in clauses (i) through (iv) above of any other Person;
(m) Pay or grant any severance or termination pay (i) to any director or officer or (ii) to any other employee other than pursuant to the aggregate amount that is borrowed thereunder Contracts in place as of the date hereof;
(ln) Except as required by law or permitted by SECTION 6.1(C), adopt Adopt or amend any Company Scheduled Plan Employee Plan, except to the extent required by applicable Legal Requirements, or increase the salaries enter into or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of amend any employment contract Contract, extend employment offers to any Person, pay or the payment of agree to pay any special bonus or special remuneration to any director or employee, other than in connection with normal annual bonus and salary adjustments for all non-officers and directors and after prior consultation with Parent, or increase the salaries or wage rates of its other employees;
(mo) Revalue any of the assets of the Company or any of its Subsidiariesassets, including without limitation limitation, writing down the value of inventory, inventory or writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable lawGAAP;
(np) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, payPay, discharge or satisfy satisfy, in an amount in excess of $100,000 25,000 (in any one case) or $500,000 50,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001aggregate), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of (i) liabilities of the type reflected or reserved against in the Company Financial Statements and that are not in excess of $25,000, (or ii) liabilities under Contracts entered into in the notes thereto); 41ordinary course of business subsequent to the Balance Sheet Date and that are not in excess of $25,000, (iii) liabilities under Contracts entered into in the ordinary course of business, which payments are due in accordance with the terms of such Contracts and are not in excess of $25,000, or (iv) expenses consistent with the provisions of this Agreement incurred in connection with the transactions contemplated hereby;
(oq) Except as required by applicable Tax lawAdopt a plan of complete or partial liquidation, make dissolution, merger, consolidation, restructuring, recapitalization, or other reorganization of the Company (other than the Merger and the Recapitalization Merger);
(r) Make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money)Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(ASections 6.1(b) THROUGH (Rthrough6.1(r) above, or any other action which that would prevent the Company from performing or cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, Company not to be satisfiedperform its covenants hereunder.
Appears in 1 contract
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the date of acceptance for payment and payment of shares of Company Common Stock by Merger Sub in the Effective TimeOffer (on the expiration date of the Offer (as determined in accordance with Section 1.01(b)) (the "Offer Closing Date"), the Company (which for the purposes of this SECTION 6.1 shall include the Company covenants and each of its Subsidiaries) agreesagrees that, except to the extent that Parent shall otherwise consent in writing (which consent writing, the Company shall conduct its business only in, and the Company shall not be unreasonably withheld or delayed)take any action except in, to carry on its the ordinary course of business and to cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts a manner consistent with past practices practice; and policies the Company shall use reasonable commercial efforts to preserve substantially intact its present the business organizationsorganization of the Company, to keep available the services of its the present officers and officers, employees and consultants of the Company, to prevent the loss, cancellation, abandonment, forfeiture or expiration of any intellectual property rights of the Company, to preserve its in full force and effect all material licenses and approvals held by the Company and to preserve the present relationships of the Company with customers, suppliers, distributors, licensors, licensees, suppliers and others having business dealings other persons with which the Company or any such Subsidiarieshas significant business relations. By way of amplification and not limitation, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except except as expressly provided for contemplated or permitted by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, during the period from the date of this Agreement and shall not permit any continuing until the earlier of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant or the Offer Closing Date, directly or indirectly do, or propose to its termsdo, any of the following without the prior written consent of Parent (Parent, which consent shall not be unreasonably withheld or delayed):withheld:
(a) Except as provided in this Agreement amend or as described in otherwise change the Company's Certificate of Incorporation or By-Laws;
(b) issue or sell, or authorize the issuance or sale of, any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including, without limitation, any phantom interest) of the Company Disclosure Schedules(except for the issuance of shares of Company Common Stock issuable pursuant to Options under the Company Stock Option Plans which Options are outstanding on the date of this Agreement);
(c) waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans; provided, however, the foregoing shall not apply to the terms and conditions of any Options issued pursuant to the Company Stock Option Plans;
(bd) Enter into adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than the Merger);
(e) sell, pledge, dispose of or encumber any material partnership arrangementsassets of the Company;
(f) transfer or license to any person or entity or otherwise extend, joint development agreements amend or strategic alliancesmodify in any material respect any rights to the Company Intellectual Property, except other than nonexclusive licenses in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstandingdeclare, or policies existingset aside, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare 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 any of its capital stock, or (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 of stock; or (iii) amend the Company;
(g) Repurchase terms of, repurchase, redeem or otherwise acquire, directly or indirectly, acquire any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Causeacquire (by merger, permit consolidation, or propose acquisition of stock or assets) any amendments to corporation, partnership or other business organization or division thereof; (ii) incur any indebtedness for borrowed money, or issue any debt securities, or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the Company's certificate of incorporation or by-laws, except as required by the terms obligations of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claimsperson, or rights, in each casemake any loans or advances, except in the ordinary course of business consistent with past practice practice; (iii) authorize any capital expenditures or in connection with existing agreements entered purchase of fixed assets; or (iv) enter into between or amend any contract, agreement, commitment or arrangement to effect any of the Company and Silicon Valley Bankmatters prohibited by this Section 6.01(h);
(ki) Incur amend any material employment agreement, increase the compensation payable or to become payable to its officers or employees, except for commissions payable pursuant to the Company's Sales Incentive Plans for fiscal year March 31, 2003 (copies of which have been made available or otherwise provided to Parent and listed on Section 4.12(a) of the Company Disclosure Schedule); or grant any severance or termination pay to (other than pursuant to pre-existing arrangements under written documents listed on Section 4.12(a) of the Company Disclosure Schedule), or enter into any employment or severance agreement with any director, officer or other employee of the Company; or establish, adopt, enter into or amend any Company Employee Plan except as may be required by law;
(j) incur any indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or of another person, issue or sell any debt securities or warrants options, warrants, calls or other rights to acquire any debt securities of the Company Company, enter into any "keep well" or other agreement to maintain any financial statement condition, incur or modify any other material liability or enter into any arrangement having the economic effect of any of its Subsidiaries the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice or guarantee any debt securities of others, except in each case (ii) pursuant to existing agreements entered into between credit facilities as in effect on the date hereof in the ordinary course of business;
(k) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or affiliate or pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or affiliates of the Company of any amount relating to unused vacation days , except (i) for payments required by law, (ii) for payments and Silicon Valley Bank up accruals made in the ordinary course of business consistent with past practice and (iii) as otherwise permitted by (m) below; adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any Company director, officer, employee, agent or consultant, whether past or present provided, however, the foregoing shall not apply to the aggregate amount that is borrowed thereunder as terms and conditions of any Options outstanding under the Company Stock Option Plans and the terms and conditions of those certain agreements set forth on Section 4.12(a) of the date hereofCompany Disclosure Schedule; or amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(l) Except as required by law modify, amend or permitted by SECTION 6.1(Cterminate any Material Contract, or waive, release or assign any material rights or claims thereunder or enter into any agreement or arrangement that would be considered a Material Contract hereunder, except, in each such case, any such action that is made in the ordinary course of business, consistent with past practice, except for the Company's Key Man life insurance policy (which is identified in Section 4.06(a) of the Company Disclosure Schedule), adopt which such policy shall be cancelled by the Company effective as of the Offer Closing Date;
(m) pay, discharge or amend satisfy any Company Scheduled Plan claims, liabilities or increase obligations (whether absolute, accrued, contingent or otherwise), other than the salaries payment, discharge or wage rates satisfaction of any such claims, liabilities or obligations, in the ordinary course of its employees business consistent with past practice (except for wage increases including, without limitation, the payments under those severance agreements referenced on Section 4.12(a) of the Company Disclosure Schedule), or of claims, liabilities or obligations reflected or reserved against in the financial statements of the Company or incurred in connection with the transactions contemplated by this Agreement (including, without limitation: (i) payment to Covington Associates on the Offer Closing Date of the net amount due fxx xxx "Xinimum Transaction Success Fee" (as defined in the Financial Advisor Agreement listed on Section 4.06(a) of the Company Disclosure Schedule); (ii) payment on the Offer Closing Date of
(1) Patrick H. Kareiva's accrued but unused vacation time as of the Offer Xxxxxxx Xxxx, xxxx (2) Mr. Kareiva's accrued but unpaid salary as of the Offer Closing Date, xxxx (0) Xx. Kareiva's out of pocket expenses incurred but unpaid as of the Offxx Xxxxxxx Xxte provided such out-of pocket expenses were incurred in the ordinary course of business and consistent with past practicespractice, plus (4) Mr. Kareiva's lump sum severance amount due under Mr. Kareiva's Employxxxx Xxxxxxxxt (as described in Section 4.05(a) of xxx Xxxxxxx Disclosure Schedule), including but not limited to ; (but without limiting iii) payment on the generality Offer Closing Date of the foregoingpremium for the "run off" period of the Company's Directors and Officers liability insurance (as further described in Section 7.05(c) hereof), ; and (iv) payment on the adoption or amendment Offer Closing Date of any stock purchase or option plan, all legal fees and expenses of the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employeeCompany's legal counsel);
(mn) Revalue take any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivableaction, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
the SEC, to change accounting policies or procedures (n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or procedures with respect to any bonus or special remunerationrevenue recognition, other than the payment, discharge or satisfaction in the ordinary course payments of business accounts payable and collection of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes theretoaccounts receivable); 41;
(o) Except as required by applicable make any Tax law, make election inconsistent with past practices or change settle or compromise any material election in respect Federal, state, local or foreign tax liability or agree to an extension of Taxes, adopt or change in a statute of limitations for any material respect assessment of any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of TaxesTax; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Taketake, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(ASections 6.01(a) THROUGH through (Ro) above, or any action which would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect in any material respect or prevent the Company from performing in any material respect or cause the Company not to perform in any material respect its covenants hereunder or would be reasonably likely to cause result in any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, herein not to be being satisfied.
Appears in 1 contract
Conduct of Business of the Company. During the period The Company hereby covenants and agrees that, from the date of this Merger Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, the Company (which for the purposes of Company, unless otherwise expressly contemplated by this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except Merger Agreement or consented to the extent that Parent shall otherwise consent in writing (by Acquiror, which consent shall not be unreasonably withheld or delayed)withheld, to will, and will cause the Company Subsidiaries to, carry on its business and to cause each of its Subsidiaries to carry on its business their respective businesses only in the usualOrdinary Course of Business, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially their respective reasonable best efforts consistent with past practices and policies to preserve intact its present their business organizationsorganizations and Assets, keep available maintain their rights and franchises, retain the services of its present their officers and key employees and preserve its maintain their relationships with customers, suppliers, distributors, licensors, licensees, licensees and others having business dealings with them, and use their respective reasonable best efforts to keep in full force and effect liability insurance and bonds comparable in amount and scope of coverage to that currently maintained. Without limiting the Company generality of the foregoing, except as otherwise expressly contemplated by this Merger Agreement or any such Subsidiariesas consented to in writing by Acquiror, to which consent shall not be unreasonably withheld, from the end that the goodwill and ongoing businesses date of Company and each of its Subsidiaries be unimpaired at this Merger Agreement until the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, Time the Company shall not, and shall not permit any of its Subsidiaries Company Subsidiary to:
(a) (i) increase in any manner the compensation or fringe benefits of, or pay any bonus to, prior any director, officer or employee, except for increases or bonuses in the Ordinary Course of Business to employees who are not directors or officers; (ii) grant any severance or termination pay to, or enter into any severance Agreement with, any director, officer or employee (other than pursuant to the Effective Time normal severance practices or earlier termination existing Agreements of the Company or any Company Subsidiary in effect on the date of this Merger Agreement), or enter into any employment Agreement, change of control Agreements or other similar Agreement pursuant or understanding with any director, officer or employee; (iii) establish, adopt, enter into or amend any Plan or Other Arrangement, except as may be required to its termscomply with applicable Law; (iv) pay any material benefits not provided for under any Plan or Other Arrangement; (v) grant any awards under any bonus, without incentive, performance or other compensation plan or arrangement or Plan or Other Arrangement (including the grant of stock options, stock appreciation rights, stock-based or stock-related awards, performance units or restricted stock, or the removal of existing restrictions in any Plan or Other Arrangement or Agreement or awards made thereunder) to any director, officer or employee, except as required under the Agreements set forth in Schedule 5.01(a)(v) of the Company Disclosure Schedule to employees who are not officers or directors; or (vi) take any action to fund or in any other way secure the payment of compensation or benefits under any Agreement, except as required under the Agreements set forth in Schedule 5.01(a)(vi) of the Company Disclosure Schedule; provided, that, with the prior written consent of Parent Acquiror (which consent shall not be unreasonably withheld or delayed):
withheld), the Company may (ax) Except as provided agree to pay retention bonuses and (y) issue restricted shares of Company Common Stock and/or Company Stock Options to purchase Company Common Stock for purposes of retaining employees; provided, further, that notwithstanding any other provision contained in this Agreement or as described Section 5.01, the Company may issue after the date hereof stock options to purchase Company Common Stock in the Ordinary Course of Business not in excess of an aggregate of 100,000 shares of Company Disclosure Schedules, accelerate, amend or change Common Stock underlying such options without the period consent of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plansAcquiror;
(b) Enter into declare, set aside or pay any material partnership arrangementsdividend on, joint development agreements or strategic alliancesmake any other distribution in respect of, outstanding shares of capital stock, other than dividends or other distributions declared, set aside, paid or made by any Company Subsidiary to the Company or any wholly owned Company Subsidiary, and except in that the ordinary course Company may pay non-cash dividends required by the terms of business consistent with past practicethe Company Preferred Stock;
(ci) Except as required by law redeem, purchase or otherwise acquire any existing benefit plans and agreements shares of capital stock of the Company or any Company Subsidiary or any securities or obligations convertible into or exchangeable for any shares of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements capital stock of the Company or any of its Subsidiaries under similar circumstances;
(d) TransferCompany Subsidiary, license or sell to any person options, warrants or entity conversion or otherwise extend, amend or modify any other rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms acquire any shares of capital stock of the Company or any of its Subsidiaries (Company Subsidiary or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of businessany such securities or obligations, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, securities thereof; (ii) for software piracy, effect any reorganization or recapitalization; or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or 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 capital stock of the Company;
(g) Repurchase or otherwise acquirefor, directly or indirectly, any shares of its capital stock stock;
(d) except as required by, and in accordance with, any agreements existing as of (i) upon the date hereof and as set forth on SECTION 6.1(G) exercise of the Company Disclosure Schedules;
Stock Options in accordance with their terms, (hii) Except as for the issuance of options to purchase Company Common Stock to the extent permitted under clause (a) above, and (iii) for the payments of non-cash dividends required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this AgreementStock, issue, deliver, sell award, grant or sell, or authorize or propose the issuance, delivery, award, grant or sale (including the grant of any limitations in voting rights or other Encumbrances) of, any shares of any class of its capital stock of (including shares held in treasury), any class or securities convertible intointo or exercisable or exchangeable for any such shares, or any subscriptions, rights, warrants or options to acquire any such shares, or amend or otherwise modify the terms of any such rights, warrants or options the effect of which shall be to make such terms more favorable to the holders thereof;
(e) except as contemplated by Agreements set forth in Schedule 5.01(e) of the Company Disclosure Schedule, acquire or agree to acquire, by merging or enter into consolidating with, by purchasing an equity interest in or a portion of the Assets of, or by any other agreements manner, any business or commitments any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any Assets of any character obligating it to issue any such shares other Person (other than in the Ordinary Course of Business) and other than assets received in respect of the transfer or other convertible securitiesdisposition of assets or debt, equity or other investments or interests in any Portfolio Company as permitted by clause (f) below;
(f) sell, lease, exchange, mortgage, pledge, transfer or otherwise subject to any Encumbrance or dispose of (collectively, "Dispositions"), or agree to sell, lease, exchange, mortgage, pledge, transfer or otherwise subject to any Encumbrance or dispose of, any of its Assets (other than cash expenditures permitted by clause (i) or (j) below), except for (i) Dispositions of immaterial assets for not in excess of $500,000 in aggregate consideration, (ii) other than any Dispositions of investments in Portfolio Companies permitted under clause (iii) below, sales of items of a nature reflected on the issuance Company Balance Sheet as cash equivalents or short term investments for fair market value (as determined in the Company's good faith judgment) in exchange for cash, cash equivalents or other short-term investments, and (iii) Dispositions of shares investments in, capital stock of, securities of Company Stock or loans to, the Portfolio Companies for not in excess of $500,000 in aggregate consideration;
(with Company Rights attached theretog) pursuant adopt any amendments to its articles or certificate of incorporation, bylaws or other comparable charter or organizational documents;
(h) make or rescind any material election relating to Taxes, settle or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, or elect to change any of its methods of reporting income or deductions for federal income tax purposes from those employed in the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as preparation of the date of this Agreementfederal income tax returns for the taxable year ended December 31, 2000, except in either case as may be required by Law, the IRS or GAAP;
(i) Cause, permit make or propose agree to make any amendments to new capital expenditure or expenditures which are not included in the Company's certificate 2001 capital budget, a copy of incorporation or by-lawswhich was furnished to Acquiror, except as required by and which expenditures are, individually, in excess of $50,000 or, in the terms aggregate, in excess of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement$500,000;
(ji) Sell, lease, license, encumber incur any Indebtedness for borrowed money or otherwise dispose guarantee any such Indebtedness of any of the properties or assets of another Person (other than the Company or any of its Subsidiaries or terminate or waive any contractswholly owned Company Subsidiary), claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness 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 Company Subsidiary (other than indebtedness, securities or warrants or rights issued to the Company or a wholly owned Company Subsidiary), guarantee any debt securities of othersanother Person (other than the Company or any wholly owned Company Subsidiary), except enter into any "keep well" or other Agreement to maintain any financial statement condition of another Person (other than the Company or any wholly owned Company Subsidiary) or enter into any Agreement having the economic effect of any of the foregoing, except, in each case case, (A) for short-term borrowings incurred in the Ordinary Course of Business, and (B) for installments of funds provided by the corporation specified in Schedule 5.01(k) of the Company Disclosure Schedule to the Company pursuant to existing agreements entered into the Company's financing arrangements with such corporation as in effect on the date hereof, or (ii) make any loans, advances or capital contributions to, or investments in, any other Person other than (A) intragroup loans, advances, capital contributions or investments between or among the Company and Silicon Valley Bank up (1) Rare Medium, Inc., Friedland Jacobs Communications, Inc. and Live Market, Inc. (pxxxxxxx, txxx, xhe Company shall give timely notice and a description of the use of proceeds (other than to satisfy lease obligations in the Ordinary Course of Business) with respect to any loans, advances, capital contributions in or investments in Live Market, Inc. which shall not exceed $1,000,000 in the aggregate) and (2) its other wholly-owned Company Subsidiaries to the aggregate amount that is borrowed thereunder as of the date hereof;
extent necessary to satisfy outstanding rent obligations, (lB) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its loans to employees (except for wage increases in the ordinary course Ordinary Course of business and consistent with past practices)Business, including but not limited (C) the extension of credit to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets customers of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than Company Subsidiary in the ordinary course Ordinary Course of business consistent with past practice Business and (D) except for the transactions contemplated by the Bridge Note Documents; provided, that, the Company or as required any Company Subsidiaries may make capital investments or expenditures in, or capital contributions or loans to, the Portfolio Companies which in the aggregate do not exceed $500,000 from the date hereof until the Effective Time (which $500,000 shall not include any forgiveness of loans made by GAAP the Company or applicable lawthe Company Subsidiaries to any Portfolio Companies, which loans are listed in Schedule 5.01(j) of the Company Disclosure Schedule);
(nk) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge discharge, settle or satisfy in an amount in excess of $100,000 any claims, liabilities or obligations (in any one case) whether absolute or $500,000 (in the aggregate prior to October 1contingent, 2001) matured or $200,000 (in the aggregate in any given calendar month beginning October 1unmatured, 2001known or unknown), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course Ordinary Course of business Business or in accordance with their terms, of liabilities of the type reflected or reserved against in, or contemplated by, the most recent financial statement or incurred in the Ordinary Course of Business, or waive any material benefits of, or agree to modify in any material respect, any confidentiality, standstill or similar Agreements to which the Company Financial Statements or any Company Subsidiary is a party;
(or l) other than in the notes thereto)Ordinary Course of Business, pay, discharge, settle or satisfy any dispute with a customer or agree to reduce the amount owed by a customer or accept something in lieu of full payment owed by a customer, in each case involving an amount in dispute of more than $250,000 or more than $250,000 in payments, commitments or liabilities being reduced; 41provided, that, for purposes of this paragraph (l) only, Ordinary Course of Business shall not include any transactions, settlements or other arrangements (A) between the Company or any Company Subsidiary and their respective affiliates or any Portfolio Company with respect to payments for services rendered and (B) in which the Company or any Company Subsidiary accepts equity securities of the customer in lieu of any payments, commitments or liabilities;
(m) delay or postpone the payments of any accounts payable and other liabilities or amounts owed by the Company to third parties other than in accordance with their terms, except for delays or postponements in good faith due to bona fide disputes and except for delays or postponements which would not reasonably be expected to have a Company Material Adverse Effect or, following the Effective Time, an Acquiror Material Adverse Effect;
(n) forgive any loans owed to the Company, except for the forgiveness of the loans made by the Company or the Company Subsidiaries to any Portfolio Companies, which loans are listed in Schedule 5.01(j) of the Company Disclosure Schedule;
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle Agreement which involves payments by the Company or any claim or assessment Company Subsidiary in respect excess of Taxes $500,000 in any twelve (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or12) month period;
(p) Except for except in the Ordinary Course of Business, waive, release or assign any rights or claims, or modify, amend or terminate any Agreement to which the Company or any Company Subsidiary is a party;
(q) make any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used or policy other than those required by itGAAP or a Governmental Entity;
(qr) Except except as otherwise permitted pursuant to SECTION 6.3by Section 5.05 hereof, take any action to exempt or make any person, entity Person or action (other than Parentthe Company) not subject to the provision provisions of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(rs) Release permit the conversion of any Company Preferred Stock into Company Common Stock or permit the release exercise of any Person fromCompany Warrant; or
(t) authorize, or waive commit or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement agree to which do any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiariesforegoing.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Conduct of Business of the Company. (a) During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms the provisions of Section 10.01 hereof and the Effective TimeClosing (the “Pre-Closing Period”), the Company (which for agrees to operate the purposes business of this SECTION 6.1 shall include the Company and each to cause its Subsidiaries to conduct their respective businesses in the ordinary course of its Subsidiaries) agreesbusiness consistent with past practices, except to (i) as specifically disclosed in Section 5.1 of the extent that Company Disclosure Schedule, (ii) with the prior written consent of Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld withheld) or delayed)(iii) as expressly provided for herein. Without limiting the generality of the foregoing, the Company agrees to carry on its business pay and to cause each of its Subsidiaries to carry on pay Funded Indebtedness and material Taxes of the Company and its business in the usualSubsidiaries when due, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts to pay or perform other obligations when due, and, to the extent consistent with past practices and policies therewith, to use commercially reasonable efforts to preserve intact its the present business organizationsorganizations of the Company and its Subsidiaries, to keep available the services of its the present officers and employees of the Company and its Subsidiaries, to preserve the Company’s and its Subsidiaries’ assets and properties and to preserve the relationships of the Company and its Subsidiaries with customers, suppliers, distributors, licensors, licensees, and others having business dealings with them, all with the Company or any such Subsidiaries, to the end that goal of preserving unimpaired the goodwill and ongoing businesses of the Company and each its Subsidiaries.
(b) During the Pre-Closing Period, except (i) as specifically disclosed in Section 5.1 of its Subsidiaries the Company Disclosure Schedule, (ii) with the prior written consent of Parent (which shall not be unimpaired at the Effective Time. Except unreasonably withheld) or (iii) as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreementherein, the Company shall not, and shall not permit any of cause its Subsidiaries not to:
(i) amend the Charter Documents (or similar organizational documents for a Subsidiary of the Company);
(ii) issue, sell or grant any capital stock or other equity or equity-related interest;
(iii) issue, sell or grant, or authorize or propose the issuance, sale or grant of any options, warrants, call rights, convertible securities, commitments or agreements of any character, written or oral, to issue, deliver, sell, or cause to be issued, delivered or sold, any capital stock or other equity interest or right to acquire any capital stock or other equity or equity-related interest;
(iv) declare, set aside or pay any dividend or any other distribution payable in cash, stock or property or redeem, purchase or otherwise acquire directly or indirectly any shares of Company Capital Stock or other securities or split, combine or reclassify any shares of Company Capital Stock or other securities;
(v) make any expenditure in excess of $50,000, or enter into any Contract or transaction with obligations exceeding $50,000 in any calendar year or $100,000 in the aggregate;
(vi) enter into any new, or amend, terminate or renew, or waive any right under, any Material Contract (or any Contract which would have been a Material Contract had such Contract been entered into prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stockdate hereof), or reprice options granted enter into, amend, waiver any right under the Company Option Plans or authorize cash payments in exchange for terminate any options granted under any of such planstransaction or Contract with an Interested Party;
(bvii) Enter into terminate, fail to renew, abandon, cancel, let lapse, fail to continue to prosecute or defend, sell, transfer, exclusively license, as may be applicable, or otherwise dispose of any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practiceCompany Intellectual Property;
(cviii) Except as required by law enter into any new, or amend, terminate or renew, or waive any right under any existing, employment, severance, compensation, consulting or salary continuation agreements, Company Employee Plan or any existing other plan, agreement or arrangement that would be a Company Employee Plan if in effect as of the date hereof, with or for the benefit plans and agreements of any employee, or hire or offer to hire any employee;
(ix) terminate any employees, or encourage any employees to resign from the Company or any of its Subsidiaries, enter into or negotiate to enter into any collective bargaining, works council or other labor agreement or arrangement, or grant any severance increases in the compensation, perquisites or termination pay benefits (iwhether through the payment of, or agreement to pay, bonus amounts or otherwise) to any executive officer employee, independent contractor, consultant, director or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstancespartner;
(dx) Transferacquire or agree to acquire by merging or consolidating with, license or sell to by purchasing any person assets or entity equity securities of, or by any other manner, any Person or otherwise extend, amend acquire or modify any rights agree to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence acquire any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto)assets;
(fxi) Declare waive or pay release any dividends on material right or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Companyclaim;
(gxii) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) incur or guarantee any such prohibited indebtedness Indebtedness or issue or sell any debt securities or warrants guarantee any Indebtedness or rights to acquire debt securities other obligations of the Company others, or create or permit any Lien over any of its Subsidiaries or guarantee any debt securities of othersassets, except in each case pursuant to existing agreements entered into between the Company other than statutory Liens for Taxes not yet due and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereofpayable;
(lxiii) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of revalue any of its employees assets (except for wage increases whether tangible or intangible), including writing off notes or accounts receivable, settle, discount or compromise any accounts receivable, or reverse any reserves other than in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employeepractice;
(mxiv) Revalue grant any loans to others or purchase any debt securities of others or amend the assets terms of the Company any outstanding loan or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable lawagreement;
(nxv) Except as set forth in the Company Disclosure Schedule initiate or as otherwise permitted by this SECTION 6.1settle any litigation, or pay, discharge or satisfy satisfy, in an amount in excess of $100,000 (50,000 in any one case) , or $500,000 (100,000 in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001)aggregate, any claim, liability or obligation Liability (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type Liabilities reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41Current Balance Sheet;
(oxvi) Except as required by applicable Tax law, make or change any material election in respect of TaxesTax election, adopt or change in any material respect any Tax accounting method in respect of Taxes, file any material Return or any amendment to a material Returnmethod, enter into any closing agreementagreement or Tax ruling, settle or compromise any Tax claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money)assessment, or consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment assessment, or file any Tax Return (including any amended Tax Return) other than a payroll, sales or use Tax Return filed consistent with past practice, IRS Form 5500 or property Tax Return unless such Tax Return has been provided to Parent for review within a reasonable period prior to the due date for filing and Parent has consented to such filing;
(xvii) adopt or change accounting policies or procedures, including with respect to reserves for excess or obsolete inventory, doubtful accounts or other reserves, depreciation or amortization policies or rates, revenue recognition policies, billing and invoicing policies, or payment or collection policies or practices;
(xviii) voluntarily take any action that would result in respect any of Taxesthe conditions to the Closing set forth in Article VII not being satisfied or that would delay their satisfaction;
(xix) change or alter its cash management procedures or management of working capital, including by accelerating collection of receivables or delaying payment of payables; or
(pxx) Except for offer to discuss entering into, negotiate entering into, authorize the entrance into, enter into any change which is required by reason Contract or otherwise commit to do any of a concurrent change the foregoing.
(c) Notwithstanding anything in GAAPthis Agreement to the contrary, nothing contained in this Agreement shall give Parent, directly or indirectly, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting right to control or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to direct the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any operations of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its SubsidiariesEffective Time.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Samples: Merger Agreement (Repligen Corp)
Conduct of Business of the Company. During Except as set forth in Section 7.1 ---------------------------------- of the Company Disclosure Statement, as expressly permitted by this Agreement, as required by any change in applicable Law, or as otherwise agreed by Parent in writing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and the Effective Time, (i) the Company (which for the purposes of this SECTION 6.1 shall include the Company will, and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to will cause each of its Subsidiaries to carry on its business in the usual, regular and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizations, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant conduct its operations according to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans , and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts extent consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required bywill, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior will use all reasonable efforts to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any cause each of its Subsidiaries or terminate or waive any contractsto, claimsseek to preserve intact its current business organizations, or rights, in each case, except in keep available the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any service of its Subsidiaries or guarantee any debt securities of otherscurrent officers and employees, except in each case pursuant to existing agreements entered into between and preserve its relationships with customers, suppliers and others having business dealings with it, with the Company objective that their goodwill and Silicon Valley Bank up to ongoing businesses shall be unimpaired at the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without Effective Time. Without limiting the generality of the foregoing), from and including the adoption or amendment of any stock purchase or option plan, date hereof to the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAPEffective Time, the Company will not, and will not permit any of its Subsidiaries to, change without the prior written consent of Parent (except to the extent set forth in Section 7.1 of the Company Disclosure Statement):
(a) except for (i) Shares issued upon exercise of options or other rights outstanding as of the date hereof under Employee Plans or Benefit Arrangements, (ii) (A) options to purchase, and awards of, no more than an aggregate of 300,000 Shares, granted in connection with new hires or promotions, directors' retainers, and bonus award programs, in the ordinary course of business consistent with past practice under currently existing Employee Plans or Benefit Arrangements, and (B) options to purchase no more than an aggregate of 700,000 Shares issued pursuant to or in accordance with the terms of the ACC Agreement (which options are included within the aggregate maximum number of Shares issuable pursuant to the ACC Agreement as set forth in Section 5.6), and the issuance of Shares upon the exercise thereof, (iii) Shares issued pursuant to the terms of the ACC Agreement (a copy of which, as in effect on the date hereof, has been provided to Parent), (iv) Shares issued in accordance with the terms of the Company Stock Purchase Plan as in effect on the date hereof, and (v) shares of Class A Common Stock issued upon conversion of shares of Class B Common Stock outstanding on the date hereof, in accordance with the terms of the Company's Certificate of Incorporation as in effect on the date hereof, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, sale, disposition or pledge or other encumbrance of (A) any method additional shares of accounting its capital stock of any class (including the Shares), or accounting practice used by itany securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock, or (B) any other securities in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(qb) Except redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any of its outstanding securities (including the Shares);
(c) except for conversions of shares of Class B Common Stock outstanding on the date hereof into shares of Class A Common Stock, in accordance with the terms of the Company's Certificate of Incorporation as otherwise permitted pursuant to SECTION 6.3in effect on the date hereof, take split, combine, subdivide or reclas- sify any action to exempt shares of its capital stock or declare, set aside for payment or pay any dividend, or make any personother actual, entity constructive or action deemed distribution in respect of any shares of its capital stock or otherwise make any payments to stockholders in their capacity as such (other than Parent) not subject to the provision of Section 203 dividends or distributions paid by any Wholly-Owned Subsidiary of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulationCompany);
(ri) Release or permit grant any increases in the release compensation of any Person fromof its directors, officers or employees, except in the ordinary course of business consistent with past practice, (ii) pay or award or agree to pay or award any pension, retirement allowance, or waive other nonequity incentive awards, or permit other employee benefit, not required by any of the waiver Employee Plans or Benefit Arrangements to any current or former director, officer or employees, whether past or present, or to any other Person, except for payments or awards that are in the ordinary course of business, consistent with past practice, and that are not material, (iii) pay or award or agree to pay or award any provision stock option or equity incentive awards except as expressly permitted by Section 7.1(a), (iv) enter into any new or amend any existing employment agreement with any director, officer or employee, except for employment agreements with new employees entered into in the ordinary course of business consistent with past practice and except for amendments in the ordinary course of business, consistent with past practice, that do not materially increase benefits or payments, (v) enter into any new or amend any existing severance agreement with any current or former director, officer or employee, except for agreements or amendments in the ordinary course of business, consistent with past practice, that do not provide for material benefits, or (vi) become obligated under any new Employee Plan or Benefit Arrangement, which was not in existence on the date here-of, or amend or exercise discretion pursuant to any confidentialitysuch Employee Plan or Benefit Arrangement in existence on the date hereof, "standstill" except for any such amendment or similar agreement to which any exercise of discretion in the ordinary course of business, consistent with past practice, that does not provide for material benefits;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries not constituting an inactive Subsidiary (other than the Merger, and other than (i) with respect to any Subsidiary of the Company such of the foregoing as do not change the beneficial ownership interest of the Company in such Subsidiary and (ii) with respect to the Company, any such merger, consolidation, restructuring, recapitalization or other reorganization that is used to effect an acquisition permitted pursuant to Section 7.1(f) and which does not result in a party change of control of the Company or under change the Shares into a different number or kind of securities);
(f) make any acquisition, by means of merger, consolidation or otherwise, of (i) any direct or indirect ownership interest in or assets comprising any business enterprise or operation or (ii) except in the ordinary course and consistent with past practice, any other assets; provided, however, that the -------- ------- Company may make such acquisitions for cash in an amount not to exceed $10 million in the case of any single acquisition or $100 million for all such acquisitions in the aggregate; provided further that such acquisitions do not -------- ------- and would not prevent or materially delay the consummation of the Merger; and provided further that the foregoing shall not prevent the Company from exploring -------- ------- on a preliminary basis and conducting diligence investigations (including having discussions with any potential acquisition target) with respect to any potential acquisition that would require Parent's consent hereunder, for the purpose of determining the desirability of such potential acquisition and developing the basis on which to seek Parent's consent, so long as the Company does not submit any formal proposal or indication of interest to such acquisition target, or make any binding commitments with respect to such potential acquisition, without obtaining Parent's consent;
(i) dispose of any direct or indirect ownership interest in any CLEC system or in any other local services or access system (including any shares of capital stock of any Subsidiary holding any such interest) or any controlling interest in any other material business enterprise or operation, (ii) make any other disposition of any other direct or indirect ownership interest in or assets comprising any CLEC system or any other local service or access system or other material business enterprise or operation (except for the replacement or upgrade of assets, or disposition of unnecessary assets, in the ordinary course and consistent with past practice), or (iii) except in the ordinary course and consistent with past practice, dispose of any other assets;
(h) adopt any amendments to its Certificate of Incorporation or By-Laws or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiary not constituting an inactive Subsidiary of the Company;
(i) incur any indebtedness for borrowed money or guarantee any indebtedness of any other Person or make any loans, advances or capital contributions to, or investments in, any other Person (other than to the Company or any Wholly-Owned Subsidiary of the Company), except that if the Company shall have complied with the provisions of Section 7.14 hereof with respect thereto, the Company may incur additional indebtedness after the date hereof, under existing credit facilities (or any renewals thereof) or in the high yield debt market, resulting in aggregate net proceeds to the Company from such additional indebtedness not exceeding $350 million;
(j) engage in the conduct of any business other than telecommunications and related businesses;
(k) enter into any agreement or exercise any discretion providing for acceleration of payment or performance as a result of a change of control of the Company or its Subsidiaries has Subsidiaries;
(l) enter into any rightscontracts, and will use its best efforts to enforce arrangements or cause to be enforced each such agreement at understandings requiring in the request aggregate the purchase of Parent. The Company will also promptly request each Person that has executedequipment, within 12 months materials, supplies or services in excess of $35 million more than the amounts set forth for capital expenditures in the Company's 1998 operating plan approved by the Company's Board of Directors prior to the date of this Agreementhereof, a confidentiality agreement in connection with such Person's consideration copy of a possible Acquisition Transaction or equity or debt investment in which has been provided by the Company to return all confidential information heretofore furnished to such Person by Parent;
(m) enter into or on behalf amend or waive any right under any agreement with any Affiliates of the Company (other than its Subsidiaries) or with any Cable Stockholder or any Affiliate of its Subsidiaries.
(s) Takeany Cable Stockholder, or agree in writing or otherwise to take, other than any of the actions described foregoing as may be done in SECTION 6.1(Athe ordinary course of business and that is not material, individually or in the aggregate, to the Company and its Subsidiaries;
(n) THROUGH settle or compromise any material litigation or waive, release or assign any material rights or claims, except in the ordinary course of business consistent with past practice;
(Ro) aboveamend, modify, supplement, or waive any action which would cause right or would be reasonably likely condition under, the ACC Agreement or consent to cause ACC doing any of the conditions foregoing under the US Wats Agreement, except, in either case, for amendments, modifications, supplements or waivers which are not adverse to Parent or the Merger set forth Company in SECTIONS 7.1 OR 7.3any material respect and which in any event do not (i) increase the consideration payable per share or in the aggregate to shareholders of ACC under the ACC Agreement or US Wats under the US Wats Agreement, not (ii) otherwise increase the maximum aggregate number of Shares that may be issuable under the ACC Agreement, or (iii) extend the "drop-dead" date under either such agreement beyond November 26, 1998; or
(p) authorize, recommend or propose (other than to be satisfiedParent), or announce an intention to do any of the foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Teleport Communications Group Inc)
Conduct of Business of the Company. During Except as expressly contemplated by this Agreement or described in the Disclosure Letter, during the period from the date of this Agreement and continuing to the Closing Date or until the earlier of the termination of this Agreement pursuant to its terms and the Effective TimeAgreement, the Company (which for the purposes of this SECTION 6.1 shall include the Company conduct and each of its Subsidiaries) agrees, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on conduct its operations according to its ordinary and usual course of business in and consistent with past practice, and, to the usualextent consistent therewith, regular and ordinary course, and to the Company shall use and shall cause each of its Subsidiaries to use all commercially its reasonable efforts consistent with past practices and policies to preserve substantially intact its present business organizationsorganization, to keep available the services of its present current officers and employees and to preserve its the present relationships with customers, suppliers, distributors, licensors, licensees, those Persons and others entities having significant business dealings relationships with the Company and its Subsidiaries, except such as would not have a Material Adverse Effect, and the Company shall promptly advise the Purchaser of any change in the Company's or any such of its Subsidiaries' condition (financial or otherwise), properties, assets, liabilities or results of operations that would be material to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries be unimpaired at taken as a whole. Without limiting the Effective Time. Except generality of the foregoing and except as otherwise expressly provided for in or contemplated by this AgreementAgreement or as disclosed in the Disclosure Letter, and except for that certain transaction referred to as "Project Pluto" (the Credit Agreementterms of which have previously been disclosed to the Purchaser), during the Security Agreementperiod specified in the preceding sentence, or without the Software Distribution Agreementprior written consent the Purchaser, the Company shall not, not and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed)::
(a) Except as provided in this Agreement issue, sell, grant options or as described in rights to purchase or receive, pledge, or authorize or propose the Company Disclosure Schedulesissuance, acceleratesale, amend or change the period of exercisability grant of options or restricted stock, rights to purchase or reprice options granted under the Company Option Plans receive or authorize cash payments in exchange for any options granted under any pledge of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) any Company Securities or Subsidiary Securities, or grant or accelerate any right to convert or exchange any executive officer Company Securities or Subsidiary Securities, other than Shares issuable upon exercise of the options described in Section 4.02 or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of Shares outstanding on the Companydate hereof;
(gb) Repurchase acquire or otherwise acquireredeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities;
(c) split, combine or reclassify its capital stock or declare, set aside, make or pay any dividend or distribution (whether in cash, stock or property) on any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of (other than cash dividends paid to the Company Disclosure Schedulesby its wholly-owned Subsidiaries with regard to their capital stock);
(hd) Except as required (i) make or offer to make any acquisition, by the terms means of any agreement between the Company and any holder a merger or otherwise, of Company Series E Preferred Stock entered into on assets or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible intosecurities, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sellsale, lease, license, encumber encumbrance or otherwise dispose other disposition of any of the properties assets or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rightssecurities, in each casecase involving an amount in excess of US$1,000,000 (one million), except in the ordinary course for purchases of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases inventory made in the ordinary course of business and consistent with past practices)practice or (ii) enter into a Material Contract or amend any Material Contract or grant any release or relinquishment of any rights under any Material Contract;
(e) incur or assume any long-term debt or short-term debt except in ordinary course of business consistent with past practice or to fund payments contemplated under this Agreement;
(f) other than in the ordinary course of business and consistent with past practice, including but not limited to assume, guarantee, endorse or otherwise become liable or responsible (but without limiting whether directly, contingently or otherwise) for the generality material obligations of any other Person except wholly-owned Subsidiaries of the foregoingCompany;
(g) other than in the ordinary course of business and consistent with past practice, make any loans, advances or capital contributions to, or investments in, any other Person (other than wholly-owned Subsidiaries of the Company);
(h) change any of the material accounting principles or practices used by it unless required by United States generally accepted accounting principles;
(i) make any material Tax election or settle or compromise any material federal, state or local income Tax liability;
(j) except as may be required to effect the adoption Minority Buy-Out, propose or amendment adopt any amendments to its governing documents;
(k) grant any stock-related, performance or similar awards or bonuses;
(l) forgive any loans to employees, officers or directors or any of any stock purchase their respective affiliates or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employeeassociates;
(m) Revalue except as contemplated by this Agreement, enter into any new, or amend any existing, employment, severance, consulting or salary continuation agreements with or for the benefit of any officers, directors or employees, or grant any increases in the assets of the Company compensation or any of its Subsidiariesbenefits to officers, including without limitation writing down the value of inventory, writing off notes or accounts receivable, directors and employees (other than normal increases to persons who are not officers or directors in the ordinary course of business consistent with past practice practices and that, in the aggregate, do not result in a material increase in benefits or as required by GAAP compensation expense of the Company); provided, however, that nothing contained in this Section 6.01 shall in any manner preclude the Company from extending the current term of any employment, severance, change in control or applicable lawsimilar agreement, arrangement or program which is effect on the date hereof;
(n) Except as set forth except in the ordinary course of business, agree to the amendment, revocation or termination of any material broadcasting license of the Company Disclosure Schedule and its Subsidiaries or as otherwise permitted by joint ventures;
(o) make any deposits or contributions of cash or other property to or take any other action to fund or in any other way secure the payment of compensation or benefits under the Plans or agreements subject to the Plans or any other plan, agreement, contract or arrangement of the Company;
(p) enter into, amend, or extend any material collective bargaining or other labor agreement;
(q) adopt, amend or terminate any Plan or any other bonus, severance, insurance pension or other employee benefit plan or arrangement ; provided, however, that nothing contained in this SECTION 6.1Section 6.01 shall in any manner preclude the Company from extending the current term of any Plan which is effect on the date hereof;
(r) other than in the ordinary course of business, settle or agree to settle any suit, action, claim, proceeding or investigation (including any suit, action, claim, proceeding or investigation relating to this Agreement or the transactions contemplated hereby) or, except in the ordinary course of business, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior agree to October 1pay, 2001) discharge or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), satisfy any claim, liability or obligation (absolute, absolute or accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, ) other than the payment, discharge or satisfaction of liabilities reflected or reserved against in full in the financial statements as at December 31, 1998 or incurred in the ordinary course of business of liabilities subsequent to December 31, 1998;
(s) except as specifically permitted by Section 6.02, knowingly take, or agree to commit to take, or fail to take any action that would result or is reasonably likely to result in any of the type reflected Offer Conditions not being satisfied, or reserved against in would make any representation or warranty of the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change contained herein inaccurate in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money)at, or consent as of any time prior to, the Closing Date, or that would impair the ability to any extension consummate the Offer in accordance with the terms hereof or waiver of the limitation period applicable to any claim or assessment in respect of Taxesmaterially delay such consummation; or
(pt) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any of its Subsidiaries is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, take any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfiedforegoing actions.
Appears in 1 contract
Samples: Exchange Offer Agreement (United Pan Europe Communications Nv)
Conduct of Business of the Company. During the period from From the date of this Agreement and continuing hereof until the earlier of the termination of this Agreement pursuant to its terms hereof and the Effective TimeClosing Date:
(a) The Company will, and the Company (which for the purposes of this SECTION 6.1 shall include Shareholders will cause the Company and each of its Subsidiaries) agreesSubsidiaries to, except to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), to carry on its business and to cause each of its Subsidiaries to carry on conduct its business in the usual, regular and ordinary coursecourse 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 Purchaser) in the continuing best interest of the Company and the Shareholders;
(b) The Company will, and to use the Shareholders will cause the Company and cause each of its Subsidiaries to, (1) pay all of its debts and Taxes when due, except to the extent such debts or Taxes are being contested in good faith by appropriate proceedings and for which adequate reserves according to GAAP or U.S. GAAP, as applicable, have been established, (2) pay or perform its other obligations when due, and (3) use all commercially reasonable efforts consistent with past practices and policies practice to (A) preserve intact its present business organizations, (B) keep available the services of its present officers and employees key employees, and (C) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company or any such Subsidiariesit, to the end that the its goodwill and ongoing businesses of will be unimpaired at the Closing Date;
(c) The Company will, and the Shareholders will cause the Company and each of its Subsidiaries be unimpaired at the Effective Time. Except as expressly provided for by this Agreement, the Credit Agreement, the Security Agreement, or the Software Distribution Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(c) Except as required by law or any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(f) Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect promptly notify Purchaser of any of its capital stockchange, occurrence or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement, issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any character obligating it to issue any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this Agreement;
(i) Cause, permit or propose any amendments to the Company's certificate of incorporation or by-laws, except as required by the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this Agreement;
(j) Sell, lease, license, encumber or otherwise dispose of any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (other than ordinary course trade payables or pursuant to existing credit facilities in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(l) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but event not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (and its Subsidiaries, and of any change, occurrence or event which, individually or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(p) Except for any change which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or aggregate with any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person fromchanges, or waive or permit the waiver of any provision ofoccurrences and events, any confidentiality, "standstill" or similar agreement could reasonably be expected to which any of have a Material Adverse Effect on the Company or any of its Subsidiaries which is a party or under which the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its Subsidiaries.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, Article 6 not to be satisfied; and
(d) The Company will, and the Shareholders will cause the Company and each of its Subsidiaries to, assure that each of the Contracts entered into on or after the date hereof by it will not require the procurement of any consent, waiver or novation or provide for any material change in the obligations of any party in connection with, or terminate as a result of the consummation of, the Transactions.
(e) The Company will, and the Shareholders will cause the Company and each of its Subsidiaries to, use commercially reasonable efforts to (i) preserve its business organization, (ii) retain the services of its present employees and (iii) preserve the goodwill of its customers and suppliers.
Appears in 1 contract
Conduct of Business of the Company. (a) During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms and or the Effective TimeClosing, the Company Seller shall (which for the purposes of this SECTION 6.1 shall include the Company and each of its Subsidiaries) agrees, except to the extent that Parent Buyer shall otherwise consent in writing (writing, which consent shall will not be unreasonably withheld withheld, conditioned or delayed), ) cause the Company and the Company shall agree to carry on its business diligently in the ordinary course consistent with past practice, pay its debts when due and to cause each of pay its Subsidiaries to carry on Taxes when due, pay or perform its business in the usual, regular other obligations when due and ordinary course, and to use and cause each of its Subsidiaries to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organizationsmaintain in full effect the Company Permits, keep available and maintain the services assets used in the Business in good operating condition and repair, maintain the business organization of its present officers and employees the Company intact and preserve its relationships with customers, the goodwill of the suppliers, distributorscontractors, licensors, licenseesEmployees, customers, distributors and others having business dealings relations with the Company Company, make available to Buyer and Parent Xxxxxxxx Xxxxxxx (or any such Subsidiariesan executive knowledgeable about the Business designated by ROC’s President and Chief Executive Officer should Xx. Xxxxxxx become unavailable for reasons beyond the control of Xx. Xxxxxxx or the Company), upon reasonable prior notice to ROC’s President and Chief Executive Officer, Xxxx Xxxx, and in a manner that reasonably minimizes the interference with Xx. Xxxxxxx’x performance of his duties to the end that the goodwill and ongoing businesses of Company and each the disruption to the Company’s business activities, and not terminate the services of its Subsidiaries be unimpaired at Xx. Xxxxxxx. During the Effective Time. Except as expressly provided for by period from the date of this Agreement, Agreement and continuing until the Credit Agreement, earlier of the Security Agreement, termination of this Agreement or the Software Distribution AgreementClosing, the Company Seller shall not, and shall cause the Company and its respective Affiliates not permit any of its Subsidiaries to, prior and the Company agrees not to, attempt to persuade or solicit any Employee, or any individual who devotes a majority of his or her time to the Effective Time Business, not to continue his or her employment or engagement, as the case may be, with the Company after the Closing.
(b) Without limiting the generality of Section 6.1(a), except as required by applicable Law, required by this Agreement or as set forth in Exhibit E, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant or the Closing, without the written consent of Buyer (which will not be unreasonably withheld, conditioned or delayed and which may only be withheld with respect to acts that would be reasonably expected to have a Company Material Adverse Effect), Seller agrees that it will cause the Company, and the Company agrees, not to:
(i) make any fundamental change in the Business or operations of the Company with respect to the Business;
(ii) adopt any amendment to its Articles of Incorporation, Bylaws or other applicable governing documents;
(iii) sell, pledge, lease, dispose of, grant or encumber any of its property, including the Real Property, or any of its assets or equity interests in any other Person, except for (A) sales of current assets in the ordinary course of business consistent with past practice, (B) Permitted Encumbrances and (C) other sales that do not exceed, individually or in the aggregate, Fifty Thousand Dollars ($50,000);
(iv) exercise any option to purchase, sell or lease (whether as lessor or lessee) real property or any option to extend a lease of real property (except for any extension of a lease of real property, which, by its terms, without the prior written consent of Parent (occurs automatically and which consent shall does not be unreasonably withheld or delayed):
(a) Except as provided in this Agreement or as described in the Company Disclosure Schedules, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any terms of such planslease);
(bv) Enter into incur, assume, or modify any material partnership arrangementsIndebtedness;
(vi) cancel any debts owed to or claims held by the Company with respect to the Business (including the settlement of any claims or litigation) other than debts owed or claims held which do not exceed individually or in the aggregate Fifty Thousand Dollars ($50,000), joint development agreements or strategic alliances, except in the ordinary course of business consistent with past practice;
(cvii) Except other than as required by law applicable Law or the terms of a Material Contract, materially modify or amend, or terminate any existing benefit plans and agreements of the Company or any of its Subsidiaries, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or (B) pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, Material Contracts other than on standard forms supplier or vendor contracts for the purchase or lease of the Company goods or any of its Subsidiaries (services modified, amended or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into terminated in the ordinary course of business, including non-exclusive, enterprise-wide or site licenses.;
(eviii) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or subject any of its Subsidiariesproperties, provided that assets or equity interests to a Lien, other than Permitted Encumbrances and Liens in existence on the Company consults with date of this Agreement;
(ix) fail to maintain the Parent prior insurance coverage relating to the filing of such a suit and keeps Parent advised Real Property existing as of the status and details date of execution of this Agreement (however, in the event that any such litigation (provided that, notwithstanding the foregoingcoverage shall be terminated or shall lapse, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding procure substantially similar substitute insurance policies in at least such amounts and against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect theretosuch risks as are currently covered by such policies);
(fx) Declare authorize for issuance, issue, sell or pay deliver (A) any dividends on equity or make voting interest in the Company or (B) any other distributions (whether in cashsecurities convertible into, stock or property) in respect of any of its capital stockexchangeable for, or splitevidencing the right to subscribe for or acquire either (1) any equity or voting interest in the Company, combine or reclassify (2) any of its capital stock securities convertible into, exchangeable for, or issue evidencing the right to subscribe for or authorize the issuance of acquire any other securities equity or voting interest in respect of, in lieu of or in substitution for shares of capital stock of the Company;
(gxi) Repurchase split, combine, redeem, reclassify, purchase or otherwise acquire, directly or indirectly, any shares equity or voting interest in the Company, or make any other change in the capital structure of its the Company;
(xii) acquire any business or Person, by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions;
(xiii) make any capital stock expenditure or commitment therefor, enter into any capital leases or otherwise acquire any assets or properties, except in accordance with the capital expenditure budget included in Exhibit E;
(xiv) modify or rescind any of the Company Permits, or fail to use good faith efforts to obtain any renewal or extension, as may be required by Law, of any Company Permits;
(xv) subject the Company to any bankruptcy, receivership, insolvency or similar proceedings other than the Bankruptcy Case and related payments and transactions;
(xvi) make any change in any method of accounting or auditing practice other than those required by GAAP;
(xvii) prepare, amend or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods (including positions, elections or methods which would have the effect of deferring income to periods, or otherwise increase Tax liability of a period, for which Buyer is liable pursuant to Section 6.12 or accelerating deductions to periods, or decreasing any tax, attributable to periods, for which the Company is liable pursuant to Section 6.12);
(xviii) make any loans, advances or capital contributions to, or investments in, any other Person other than advances to Employees for incidental expense reimbursements in the ordinary course of business;
(xix) enter into any transaction with any Affiliate or Affiliated Person;
(xx) adopt or, except as required by, and in accordance with, any agreements existing as of the date hereof and as set forth on SECTION 6.1(G) of the Company Disclosure Schedules;
(h) Except as required by applicable Law or the terms of any agreement between Company Benefit Plan or with respect to amendments that do not materially increase the Company’s expense, or materially decrease the coverage or available benefits under, the applicable Company and Benefit Plan, amend any holder of Company Series E Preferred Stock entered into Benefit Plan;
(xxi) except (A) as required by any Contract or any Company Benefit Plan, in each case, as in effect on or prior to the date of this Agreement, issueor (B) as required by applicable Law, deliveraward or increase any bonuses (other than the Stay Bonuses), sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible intosalaries, or other compensation to any subscriptionsEmployee, rights, warrants other than any increases in compensation or options benefits to acquirenon-officer Employees in an aggregate amount not in excess of One Hundred Thousand Dollars ($100,000) (exclusive of applicable payroll taxes and other withholding charges), or enter into other agreements or commitments of amend or modify any character obligating it to issue employment, severance or similar Contract with any such shares or other convertible securities, other than the issuance of shares of Company Stock (with Company Rights attached thereto) pursuant to the exercise of Company Rights or Company Series E Preferred Stock, stock options or warrants outstanding as of the date of this AgreementEmployee;
(iA) Causeterminate the employment of or hire any individual whose annual compensation exceeds or is reasonably expected to exceed Seventy-Five Thousand Dollars ($75,000), permit or propose any amendments to (B) within ninety (90) days before the Company's certificate expected Closing Date, terminate the employment of incorporation or by-laws, except as required by more than 10% of the terms of any agreement between the Company and any holder of Company Series E Preferred Stock entered into on or prior to the date of this AgreementEmployees;
(jxxiii) Sell, lease, license, encumber or otherwise dispose of enter into any of the properties or assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights, in each case, except in the ordinary course of business consistent with past practice or in connection with existing agreements entered into between the Company and Silicon Valley Bank;
(k) Incur any material indebtedness for borrowed money (Contract that would constitute a Material Contract other than ordinary course trade payables supplier or pursuant to existing credit facilities vendor contracts for the purchase or lease of goods or services in the ordinary course of business) or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, except in each case pursuant to existing agreements entered into between the Company and Silicon Valley Bank up to the aggregate amount that is borrowed thereunder as of the date hereof;
(lxxiv) Except as required by law or permitted by SECTION 6.1(C), adopt or amend any Company Scheduled Plan or increase the salaries or wage rates of any of its employees (except for wage increases in the ordinary course of business and consistent with past practices), including but not limited to (but without limiting the generality of the foregoing), the adoption or amendment of any stock purchase or option plan, the entering into of any employment contract or the payment of any special bonus or special remuneration to any director or employee;
(m) Revalue any of the assets of the Company or any of its Subsidiaries, including without limitation writing down the value of inventory, writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP or applicable law;
(n) Except as set forth in the Company Disclosure Schedule or as otherwise permitted by this SECTION 6.1, pay, discharge or satisfy in an amount in excess of $100,000 (in any one case) or $500,000 (in the aggregate prior to October 1, 2001) or $200,000 (in the aggregate in any given calendar month beginning October 1, 2001), any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities of the type reflected or reserved against in the Company Financial Statements (or in the notes thereto); 41
(o) Except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable Company’s current policies or practices relating to the extension of credit to customers;
(xxv) remove any claim artwork, collectibles or assessment other memorabilia;
(xxvi) fail to maintain at least 750 slot machines in respect operation, of Taxeswhich at least 90 are available for purchase and at least 582 are owned by the Company; provided, however, that the number of slot machines set forth in this Section 6.1(b)(xxvi) shall be reduced to reflect any disposition of slot machines as a result of the Company’s termination of Indebtedness or release of Liens related to slot machines, gaming devices or slot systems requested by Buyer or Parent or required by the terms of this Agreement, but in no event shall the number of slot machines in operation owned by the Company be reduced below 582; or
(pxxvii) Except for any change which is required by reason of a concurrent change in GAAPauthorize, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting commit or accounting practice used by it;
(q) Except as otherwise permitted pursuant agree to SECTION 6.3, take any action to exempt or make any person, entity or action (other than Parent) not subject to the provision of Section 203 of the Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation;
(r) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which any of the Company or any foregoing actions in respect of its Subsidiaries which it is a party or under which restricted by the Company or any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the request of Parent. The Company will also promptly request each Person that has executed, within 12 months prior to the date provisions of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the Company to return all confidential information heretofore furnished to such Person by or on behalf of the Company or any of its SubsidiariesSection 6.1.
(s) Take, or agree in writing or otherwise to take, any of the actions described in SECTION 6.1(A) THROUGH (R) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Samples: Stock Purchase Agreement (Monarch Casino & Resort Inc)
