Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed): (a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents); (b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities; (c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company); (d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement; (e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan; (f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000; (g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business; (h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries; (i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization; (j) 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries; (k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof; (l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law; (m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance; (n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget; (o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes; (p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice; (q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement; (r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or (s) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 2 contracts
Samples: Merger Agreement (Easylink Services International Corp), Merger Agreement (Open Text Corp)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from From the date of this Agreement until the earlier of (i) the Effective TimeTime and (ii) the termination of this Agreement pursuant to its terms, unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), and except as expressly contemplated by this Agreement set forth in Section 5.01 of the Company Disclosure Letter or as otherwise required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewithBusiness Plan, the Company shall, and shall cause each of its Subsidiaries to, conduct its business in the ordinary course of business consistent with past practice and shall use its commercially reasonable best efforts to preserve substantially intact its and its Subsidiaries’ business organization, assets and goodwill and current beneficial relationships with customers, suppliers and others having business dealings with it and to keep available the services of its and its Subsidiaries’ current officers and employeeskey employees on terms and conditions substantially comparable to those currently in effect and maintain its current rights and franchises, in each case, consistent with past practice. In addition to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 5.01 of the Company Disclosure Letter or as otherwise expressly provided for in this Agreement or as otherwise required by applicable Lawthe Business Plan, from the Company shall not, nor shall it permit any date of this Agreement until the earlier of (i) the Effective Time and (ii) the termination of this Agreement pursuant to its Subsidiaries toterms, without the prior written consent of Parent (which consent shall not be unreasonably withheld withheld, delayed or delayed):conditioned), the Company shall not, and shall not permit any of its Subsidiaries to:
(a) amend adopt or propose to amend any change in its certificate of incorporation or by-laws (or other comparable organizational documents);
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(ci) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock, property stock or otherwiseproperty) in respect of, or enter into of any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct declared, set aside, made or indirect wholly-paid (A) by any Subsidiary wholly owned Subsidiaries by the Company or another Subsidiary to the Company or such other direct Subsidiary or indirect wholly-owned Subsidiaries (B) by the Company with respect to the Series A Preferred Shares or Series B Preferred Shares), (ii) split, combine or reclassify any of the Company);
(d) issue, sell, pledge, dispose of its capital stock or encumber any Company Securities issue or Company Subsidiary Securities, other than (i) 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 Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its termscapital stock, or (iiiii) in accordance with repurchase, redeem or otherwise acquire any shares of the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees capital stock of the Company or any of its Subsidiaries, or any other equity interests or any rights, warrants or options to acquire any such shares or interests;
(c) issue, sell, grant, pledge or otherwise encumber any shares of its capital stock or other securities (including any options, warrants or any similar security exercisable for or convertible into such capital stock or similar security) other than (i) pursuant to the exercise of existing options or Warrants or the conversion of, or payment of dividends in kind with respect to, existing Series A Preferred Shares or Series B Preferred Shares, in each case in accordance with their present terms, and (ii) enter into any new pursuant to the existing written contracts or amend in any material respect, any existing employment, severance, retention commitments set forth on Section 5.01(c) of the Company Disclosure Letter;
(d) merge or change in control agreement consolidate with any other Person, or acquire an amount of its assets or equity of any other Person (exclusive of goods purchased in the ordinary course of business consistent with past practice).
(e) sell, lease, license, subject to a Lien, other than a Permitted Lien, encumber or present directorsotherwise surrender, officers relinquish or employeesdispose of any assets, property or rights (including capital stock of a Subsidiary of the Company) except (i) pursuant to existing written contracts or commitments (the terms of which have been disclosed in writing to Parent prior to the date of this Agreement), (ii) sales of inventory in the ordinary course of business consistent with past practice or (iii) promote any officers the extension or employees, except with respect to employees with a base salary termination of less than $60,000 as Leases in the result ordinary course 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;business.
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(gi) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to to, or investments in, any Person other than pursuant to any contract or other legal obligation existing at the date of this Agreement as set forth in any Person, except for (wSection 5.01(f) intercompany loans, advances or capital contributions entered into in between or among of the Company and/or Disclosure Letter, (ii) create, incur, guarantee or assume any Indebtedness, issuances of debt securities, guarantees, loans or advances, other than any of its wholly-owned Subsidiaries, (x) trade payables arising the foregoing in existence as of the date of this Agreement and other than borrowings in the ordinary course of businessbusiness consistent with past practices under credit facilities of the Company or any of its Subsidiaries in existence as of the date of this Agreement, (yiii) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances enter into any swap or hedging transaction or other derivative agreements other than in the ordinary course of businessbusiness or (iv) make or commit to make any capital expenditure other than in an amount not to exceed $50,000 individually or $150,000 in the aggregate;
(hi) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding increase the compensation or benefits payable or to become payable to the current or former directors, officers, consultants or employees of the Company, or any transferof its Subsidiaries, license(ii) establish, saleadopt, lease enter into or amend any plan, agreement, trust, fund, policy or arrangement that is, or would be considered, a Company Benefit Plan, except as contemplated by this Agreement or to the extent required by applicable Law, (iii) increase the benefits payable under any existing severance or termination pay policies or employment or other disposition agreements, (iv) take any affirmative action to accelerate the vesting of any compensation, except as contemplated by this Agreement, (v) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Company Benefit Plan (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 connection any Company Benefit Plan or agreements or awards made thereunder), other than contributions (whether in stock or cash) made to Company Benefit Plans as required by the terms of such plans and consistent with past practice, (vi) take any transaction between action to fund or among in any other way secure the payment of compensation or benefits under any Company and/or one Benefit Plan, (vii) make any material determinations not in the ordinary course of business consistent with past practice under any Company Benefit Plan, (viii) grant or more promise any tax offset payment award under any Company Benefit Plan, (ix) hire or terminate the employment of its wholly-owned Subsidiariesany employee at the level of vice president or above, other than “for cause”, or (x) adopt or implement any shareholder rights plan, “poison pill” or similar arrangement or plan that is applicable to the Merger;
(h) other than in the ordinary course of business consistent with past practice, settle or compromise any action, suit, claim, litigation, proceeding, arbitration, investigation, audit or controversy (each, a “Proceeding”) or enter into any consent, decree, injunction or similar restraint or form of equitable relief in settlement of any material Proceeding other than such settlements and compromises that relate to Taxes (which are the subject of Section 5.01(i)) or that, individually or in the aggregate, are not material to the Business or the Company;
(i) (i) make or rescind any express or deemed material election relating to Taxes or consent to any extension of the limitations period applicable to any material Tax claim or assessment, (ii) settle or compromise any Proceeding relating to a material Tax claim, enter into a closing or similar agreement with any Taxing Authority relating to any material Taxes or surrender any right to obtain a material Tax refund, credit, offset or other reduction in Tax liability, (iii) file any amended material Tax Return (other than to correct an identified error), (iv) request a ruling relating to material Taxes or (v) change any material method of reporting income or deductions for Tax purposes from those employed in the preparation of its Tax Returns for the taxable year ending December 31, 2012;
(j) other than in the ordinary course of business consistent with past practice, (i) modify, amend or terminate, or assign, waive, release or relinquish any material rights or claims under, or grant any material consents under any Company Contract, (ii) enter into any successor agreement to an expiring Company Contract that changes the terms of the expiring Company Contract in a way that is materially adverse to the Company or any of the Subsidiaries, (iii) enter into any new contract or agreement that contains a change in control provision in favor of the other party or parties thereto or that would otherwise require a payment to or give rise to any rights to such other party or parties in connection with the transactions contemplated hereby, or (iv) modify, amend or enter into any new agreement that would have been considered a Company Contract if it were entered into at or prior to the date of this Agreement or, once entered into, assign, waive, release or relinquish any material rights or claims thereunder, or grant any material consents thereunder;
(k) enter into or renew or extend any agreements or arrangements that limit or otherwise restrict the Company or any of its Affiliates or any successor thereto, or that could, after the Effective Time, limit or restrict the Surviving Corporation or any of its Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(l) change any method of accounting or accounting principles or practices by the Company or any of its Subsidiaries, except for any such change required by a change in GAAP or a change in applicable Law;
(m) other than in the ordinary course of business consistent with past practice, terminate, cancel, amend or modify any material insurance policies maintained by it covering the Company or any of its Subsidiaries or their respective properties which is not replaced by a comparable amount of insurance coverage;
(n) approve, adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 reorganization of the Company or any of its Subsidiaries;
(o) abandon, guarantee any debt securities of another Persondedicate to the public, enter into any “keep well” convey title to or other Contract to maintain any financial statement condition of any other Person grant licenses under (other than any wholly-owned Subsidiary of it) or enter into any arrangement having in the economic effect of any of the foregoing, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables of business consistent with past practice practice) any material Intellectual Property or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any Trade Secrets of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to TaxesSubsidiaries;
(p) fail to maintain other than in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount ordinary course of business consistent with past practice, accelerate or delay the payment of any material accounts payable or extend or make any agreement to extend, the payment terms of any material accounts receivable;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive revalue in any material right underrespect any of its assets, any Material Contract including writing down the value of inventory or Permitwriting down notes or accounts receivable, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “or as may be consistent with past practice” shall not include entering into GAAP;
(r) permit any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company its Subsidiaries or Affiliates or any of its Subsidiaries or their respective directors, officers, managers, employees, independent contractors, representatives or agents to promise, authorize or make any payment to, or otherwise contribute any item of value to, directly or indirectly, any non-U.S. official, in each case, in violation of the ordinary course FCPA or other applicable Law;
(s) take any actions or omit to take any actions that would or would be reasonably likely to (i) result in any of business)the conditions to the consummation of the transactions contemplated by this Agreement set forth in Article VI not being satisfied or (ii) materially impair the ability of the Parties to consummate the transactions contemplated hereby in accordance with the terms hereof or materially delay such consummation; or
(st) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 2 contracts
Samples: Merger Agreement (Frederick's of Hollywood Group Inc /Ny/), Merger Agreement (FOHG Holdings, LLC)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of businessbusiness consistent with past practice, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in on Section 6.01 of the Company Disclosure Letter Schedule or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(b) (i) split, combine or reclassifyreclassify any Company Stock, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
Stock, (ciii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the CompanySubsidiary);
(dc) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights AgreementStock;
(ed) except as required by applicable Law or pursuant to Section 3.03by any Company Employee Plan or Contract in effect as of the date of this Agreement, (i) increase the compensation of directors, officers payable or employees of that could become payable by the Company or any of its SubsidiariesSubsidiaries to directors, officers or employees, other than increases in compensation made in the ordinary course of business consistent with past practice, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except in connection with respect to employees with a base salary of less than $60,000 the Company’s annual or quarterly compensation review cycle or 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 accelerate rights under any Company Employee PlansPlans or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this 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;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(ge) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into Person in between or among the Company and/or any excess of its wholly-owned Subsidiaries, (x) trade payables arising $50,000 in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessaggregate;
(hi) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in provided that the case foregoing shall not prohibit the Company and its Subsidiaries from transferring, licensing, selling, leasing or disposing of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(iii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(jg) 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiariespractice;
(kh) institute anyenter into or amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any Company Material Contract or any Lease with respect to material Real Estate or any other Contract or Lease that, if in effect as of the date hereof would constitute a Company Material Contract or Lease with respect to material Real Estate hereunder;
(i) institute, settle or compromise any Legal Actions pending or threatenedthreatened before any arbitrator, Legal Actions court or other Governmental Entity involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than (i) 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 (ii) the settlement of claims, liabilities or obligations reserved against on the Most Recent Financials of the Company; provided, provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofCompany’s business;
(lj) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(mk) (i) settle or compromise any material Tax claim, audit or assessment, (ii) make or change any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, (iii) amend any material Tax Returns or file claims for material Tax refunds, or (iv) enter into any material closing agreement, surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or its Subsidiaries;
(l) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(nm) authorizeexcept in connection with actions permitted by Section 6.03 hereof, take any action to exempt any Person from, or make any commitment with respect acquisition of securities of the Company by any Person not subject to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change state takeover statute or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim similar statute or assessment, surrender any right regulation that applies to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, Company with respect to Taxes;
(p) fail to maintain a Takeover Proposal or otherwise, including the restrictions on “business combinations” set forth in full force and effect material insurance policies covering Section 203 of the Company DGCL, except for Parent, Merger Sub or its any of their respective Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereofAffiliates, or implement a rights plan, “poison pill” or similar arrangement, except as the transactions contemplated by this Agreement;
(rn) enter intoabandon, terminateencumber, modify convey title (in whole or waive in part), exclusively license or grant any material right under, any Material Contract or Permitother licenses to Company IP, other than Contracts entered into with customers in the ordinary course of business consistent with past practice practice; or (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(so) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 2 contracts
Samples: Merger Agreement (Real Goods Solar, Inc.), Merger Agreement (Real Goods Solar, Inc.)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of businessbusiness consistent with past practice, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to preserve substantially intact its and its Subsidiaries’ business organizationorganization and material assets, properties and technologies, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Parent:
(a) amend amend, or propose or permit to amend amend, its certificate articles of incorporation or by-laws (or other comparable organizational documents);
(b) (i) split, combine or reclassifyreclassify any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
, (ciii) declare, establish a record date for, set aside aside, accrue or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries Subsidiary payable entirely to the Company or other another direct or indirect wholly-owned Subsidiaries Subsidiary of the Company, but only to the extent consistent with past practice);
(dc) issue, sell, grant, deliver, pledge, dispose of or encumber any Company Securities or Company Subsidiary SecuritiesSecurities (or authorize any of the foregoing), other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option Equity Award listed in the Company Disclosure Letter and outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards described in the Company Disclosure Letter and outstanding under Company Stock Plans as of the date of this Agreement in accordance with the Stockholder Rights Agreementtheir terms;
(ed) except as to the extent required by applicable Law or pursuant by any Company Employee Plan or Contract in effect as of the date of this Agreement and, to Section 3.03the extent required by this Agreement, disclosed in the Company Disclosure Letter, (i) increase the compensation of directors, officers payable or employees of that could become payable by the Company or any of its SubsidiariesSubsidiaries to directors, officers, employees or independent contractors, other than increases in base cash compensation for non-executive officer employees made in the ordinary course of business consistent with past practice and, except in the case of increases in compensation related to the promotion of existing non-executive officer employees, not exceeding five percent (5%) in any individual case, (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 past or present directors, officers officers, employees or employeesindependent contractors, (iii) promote any officers or employees, except in connection with respect to employees with a base salary of less than $60,000 the Company’s annual or quarterly compensation review cycle or 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 accelerate rights under any Company Employee PlansPlans or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this 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, or (v) terminate the employment of any executive officer or any employee with 2017 base salary in excess of $100,000, in each case, other than for “cause”;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(ge) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(hf) (i) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in provided that the case foregoing shall not prohibit the Company and its Subsidiaries from transferring, licensing, selling, leasing or disposing of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(iii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(jg) 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiariespractice;
(kh) institute anyenter into, renew or extend, or amend or modify in any material respect, waive or compromise any rights under, terminate or consent to the termination of (other than at its stated expiration date), any Company Material Contract or any Lease with respect to Real Estate or any other Contract or Lease that, if in effect as of the date hereof, would constitute a Company Material Contract or Lease with respect to Real Estate hereunder;
(i) institute, settle or compromise any Legal Actions pending or threatenedthreatened before any arbitrator, Legal Actions court or other Governmental Entity involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually 50,000, individually, or $100,000 in the aggregate, other than (i) 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 (ii) the settlement of claims, liabilities or obligations reserved against on the most recent balance sheet of the Company included in the Company SEC Documents; provided, provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofCompany’s business;
(lj) make any material change in any method of financial accounting principles or practices, in each case except for any such change to the extent required by a change in GAAP or applicable Law;
(mk) (i) settle or compromise any material Tax claim, audit or assessment, or surrender a right to a material Tax refund, (ii) make or change any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, (iii) amend any material Tax Returns or file claims for material Tax refunds, (iv) enter into any material closing agreement, surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or its Subsidiaries, or (v) waive or extend the statute of limitations with respect to any material Tax other than (A) pursuant to extensions of time to file a Tax Return obtained in the ordinary course of business or (B) pursuant to an extension granted in the ordinary course of business in connection with an audit of federal, state or local Taxes to prevent the assessment or collection of a Tax;
(l) form any new Subsidiary, acquire any equity interest or other interest in any other Person or enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(nm) authorizeexcept in connection with actions permitted by Section 6.04 hereof, take any action to exempt any Person from, or make any commitment with respect acquisition of securities of the Company by any Person not subject to, any capital expenditurestate takeover statute or similar statute or regulation that applies to the Company with respect to a Takeover Proposal or otherwise, including the restrictions on “control share acquisitions,” “business combinations” and “takeover offers” set forth in Chapter 302A.671, Chapter 302A.673 and Chapter 302A.675 of the MBCA, except as for Parent, Merger Sub or any of their respective Subsidiaries or Affiliates, or the transactions contemplated by the Company’s existing fiscal year 2012 Capital Budgetthis Agreement;
(on) makeabandon, change permit to lapse, encumber, pledge, convey title (in whole or revoke any material Tax electionin part), change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim license or assessment, surrender grant any right to claim a material refund, offset or other reduction licenses to Company IP, other than in Liability or consent to any extension or waiver the ordinary course of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount business consistent with past practice;
(qo) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive knowingly disclose any material right under, Trade Secret(s) or other material confidential information of the Company or any Material Contract or Permitof its Subsidiaries, other than Contracts pursuant to agreements entered into with customers in the ordinary course of business consistent with past practice that contain confidentiality undertakings with respect to such Trade Secret(s) and/or confidential information;
(it being understood p) make or authorize any capital expenditure, except that the Company and its Subsidiaries may make any capital expenditure that, : (i) is provided for in the purposes Company’s capital expense budget delivered or made available to Parent prior to the date of this subsectionAgreement, “consistent which expenditures shall be in accordance with past practice” shall the categories set forth in such budget, (ii) when added to all other capital expenditures made on behalf of the Company and its Subsidiaries, collective, since the date hereof (but not include entering into any Contract having terms provided for in the capital expense budget referred to in clause (i) above) does not exceed $25,000, individually, and conditions (including terms and conditions regarding pricing and Liabilities) that are$100,000, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously during any fiscal quarter or (iii) is made pursuant to a direct, explicit obligation to serve a customer or distributor pursuant to a Contract entered into by the Company or any of its Subsidiaries in the ordinary course of business;
(q) enter into any collective bargaining agreement or agreement to form a work council or other agreement with any labor organization or works council (except to the extent required by applicable Law);
(r) implement or announce any plant closings or material layoffs;
(s) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404 of Regulation S-K;
(t) enter into any new line of business outside of its existing lines of business and reasonable extensions thereof; or
(su) authorize, agree to or commit to do any of the foregoing. Nothing contained Notwithstanding the foregoing, nothing in this Agreement shall is intended to give Parent, directly or indirectly, the affirmative right to control or direct the Company’s business or operations of the Company or its Subsidiaries’ operations Subsidiaries at any time prior to the Effective Time. Prior to the Effective Time, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its their own businesses and its Subsidiaries’ operations.
Appears in 2 contracts
Samples: Merger Agreement (MGC DIAGNOSTICS Corp), Merger Agreement (MGC Parent LLC)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of ParentParent (which consent will not be unreasonably withheld, conditioned or delayed (it being understood for purposes of this Agreement that a period of three (3) Business Days or less shall not be considered an unreasonable delay)), conduct its business in the ordinary course of businessbusiness consistent with past practice, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall will not be unreasonably withheld withheld, conditioned or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(b) (i) split, subdivide, combine or reclassifyreclassify any securities of the Company or any Subsidiary, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any securities of the Company Securities or Company Subsidiary Securities;
any Subsidiary, (ciii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting or registration of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the CompanySubsidiary);
(dc) issue, deliver, grant, sell, pledge, transfer, dispose of or encumber any securities of the Company Securities or Company Subsidiary Securitiesany Subsidiary, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock Option in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with its their terms, or (iiiii) the issuance of Company Equity Awards and the issuance of shares of Company Common Stock upon the exercise of such Company Equity Awards (other than directors or executive officers of the Company) in accordance with their terms in the Stockholder Rights Agreementordinary course of business consistent with past practice;
(ed) except as required by applicable Law Law, as required by the terms of any Company Benefit Plan or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees any other written agreement of the Company or any of its SubsidiariesSubsidiaries in effect as of the date of this Agreement, or as set forth in Section 6.01(d) of the Company Disclosure Letter, (i) materially increase the compensation payable or to become payable by the Company or any of its Subsidiaries to directors, officers or employees, other than increases in compensation for employees, who are not officers, made in the ordinary course of business consistent with past practice, (ii) pay or agree to pay any pension, retirement allowance or other material employee benefit, (iii) enter into any new new, or amend in any material respectrespect any existing, any existing employment, severance, retention or change in control agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 as the result of the termination or resignation of any officer or employeeCompany Employees, or (iv) establish, adopt, enter into, materially amend, terminate, exercise any discretion under, or take any action to accelerate rights material benefits under any Company Employee PlansBenefit Plan or any plan, agreement, program, policy, trust, fund or make other arrangement that would be a Company Benefit Plan if it were in existence as of the date of this Agreement (in the case of each of the preceding clauses (i) through (iv), other than any contribution (A) employee offer letters or similar agreements that do not by their terms provide for any benefits other than pursuant to any a broad-based Company Employee PlanBenefit Plan that is generally applicable to similarly situated employees or (B) standard at-will employment agreement, which does not provide for individualized severance and is substantially in a form previously made available to Parent);
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(ge) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for Person (w) intercompany loans, advances or capital contributions entered into in between or among other than loans to franchisees of the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising up to $250,000 in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessaggregate);
(hf) (i) transfer, license, 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 Company, other than in the case except for transferring, licensing, selling, leasing or disposing of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(iii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationreorganization (other than the Merger);
(jg) incur (i) incur, create, assume or otherwise acquire, or modify the terms of, any indebtedness for borrowed money money, (ii) assume, guarantee or guarantee endorse any such indebtedness of another PersonPerson (other than a Subsidiary) for borrowed money, 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, (iii) guarantee any debt securities of another Person, Person or 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 (iv) or enter into any arrangement having the economic effect of any of the foregoing, or incur any Liens in each case other than Permitted Liens borrowings pursuant to the Company’s Amended and Restated Loan and Security Agreement dated as of July 16, 2009, as amended, and in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiariespractice;
(kh) institute anyexcept as set forth in Section 6.01(h) of the Company Disclosure Letter (i) enter into or amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any Company Material Contract or any Lease with respect to material Real Estate or any other Contract or Lease that, if in effect as of the date hereof would constitute a Company Material Contract or Lease with respect to material Real Estate hereunder, or (ii) waive any material default under, or release, settle or compromise any material claim against the Company or any of its Subsidiaries or liability or obligation owing to the Company under any Company Material Contract;
(i) institute, settle or compromise any Legal Actions pending or threatenedthreatened before any arbitrator, Legal Actions court or other Governmental Entity involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 500,000 in the aggregate, other than (i) 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 (ii) the settlement of claims, liabilities or obligations reserved against on the most recent balance sheet of the Company included in the Company SEC Documents; provided, provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofCompany’s business;
(lj) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(mk) enter into (i) settle or compromise any material agreementTax claim, agreement in principleaudit or assessment, letter of intent, memorandum of understanding (ii) make or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material annual Tax accounting period, adopt or change any method of Tax accounting, file (iii) amend any material amended Tax ReturnReturns or file claims for material Tax refunds, or (iv) enter into any material closing agreement, settle any material claim or assessment, surrender in writing any right to claim a material Tax refund, offset or other reduction in Liability Tax liability or consent to any extension or waiver of the limitations limitation period applicable to any material Tax claim or assessment, in each case, with respect assessment relating to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries;
(l) grant any Lien on any of its assets, other than Permitted Liens;
(m) except as set forth in Section 6.01(m) of the Company Disclosure Letter, authorize, or make any commitment with respect to capital expenditures for the Company and each of its Subsidiaries and its or their propertiesin excess of $500,000 per month (pro-rated with respect to any partial month), assets and businesses in a form and amount excluding expenditures for internally-developed software that are capitalized consistent with past practice;
(n) enter into any new line of business outside of its existing business segments;
(o) make any loan for borrowed money, or forgive any loan for borrowed money, to any Person, including loans to employees, officers or directors or any of their respective affiliates or associates (other than any such loans made (i) pursuant to the terms of any Company Benefit Plan intended to be qualified within the meaning of Section 401(a) of the Code or (ii) to franchisees of the Company up to $250,000 in the aggregate);
(p) enter into, amend or extend any collective bargaining or other labor agreement;
(q) adoptrenew or enter into any non-compete, modify from the form existing on the date hereofexclusivity, or implement a rights plan, “poison pill” non-solicitation or similar arrangement, except as contemplated by this Agreementagreement that would restrict or limit the operations of the Company or any of its Subsidiaries (or Parent or any of its affiliates after the consummation of the Merger);
(r) enter intoexcept to the extent replaced with policies of comparable or greater coverage with reputable and financially sound insurers, terminatefail to keep in force insurance policies or replacement or revised provisions providing insurance coverage with respect to the assets, modify operations and activities of the Company and its Subsidiaries as are currently in effect;
(s) abandon, encumber, convey title (in whole or waive in part), exclusively license or grant any material right under, any Material Contract or Permitother licenses to Company IP, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(st) agree authorize, recommend, propose or commit announce an intention to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectlyenter into any contract, agreement, commitment or arrangement to do any of the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Randstad North America, L.P.), Merger Agreement (SFN Group Inc.)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of businessbusiness consistent with past practice, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with material customers, suppliers, distributors, licensors, licensees and other Persons having material business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(ai) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(bj) (i) split, combine or reclassifyreclassify any Company Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
, (ciii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company)stock;
(dk) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock Option in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with its their terms, (iii) the issuance of Company Equity Awards and the issuance of shares of Company Common Stock upon the exercise of such Company Equity Awards (other than directors or (iiexecutive officers of the Company) in accordance with their terms in the Stockholder Rights ordinary course of business consistent with past practice, (iv) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (v) the issuance of shares of Company Common 26995100v.1 Stock upon conversion of any shares of Company Preferred Stock outstanding as of the date of this Agreement;
(el) except as required by applicable Law or pursuant to Section 3.03by any Company Employee Plan or Contract in effect as of the date of this Agreement, (i) increase the compensation of payable or that could become payable by the Company to directors, officers or employees employees, other than increases in compensation made in the ordinary course of the Company or any of its Subsidiariesbusiness consistent with past practice, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except in connection with respect to employees with a base salary of less than $60,000 the Company's annual or quarterly compensation review cycle or 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 accelerate rights under any Company Employee PlansPlans or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this 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;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(gm) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into Person in between or among the Company and/or any excess of its wholly-owned Subsidiaries, (x) trade payables arising $100,000 in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessaggregate;
(hi) transfer, license, sell, lease or otherwise dispose of any material assets (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including provided that the capital stock foregoing shall not prohibit the Company from transferring, licensing, selling, leasing or other equity interests in any Subsidiary of the Company, other than in the case disposing of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(iii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(jo) 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 SubsidiariesCompany, 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into payment of indebtedness that is reflected in between or among the Company and/or any of its wholly-owned SubsidiariesSEC Documents;
(kp) institute anyenter into or amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any Company Material Contract or any Lease with respect to material Leased Real Estate or any other Contract or Lease that, if in effect as of the date hereof would constitute a Company Material Contract or Lease with respect to material Leased Real Estate hereunder;
(q) institute, settle or compromise any Legal Actions pending or threatenedthreatened before any arbitrator, Legal Actions court or other Governmental Entity involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than (i) any Legal Action 26995100v.1 brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub; provided, that neither and (ii) the settlement of claims, liabilities or obligations reserved against on the most recent balance sheet of the Company nor any of its Subsidiaries included in the Company SEC Documents; provided that the Company shall not settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofCompany's business;
(lr) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(ms) enter into (i) settle or compromise any material agreementTax claim, agreement in principleaudit or assessment, letter of intent, memorandum of understanding (ii) make or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material annual Tax accounting period, adopt or change any method of Tax accounting, file (iii) make any material amended amendments to any material Tax ReturnReturns or file claims for material Tax refunds, or (iv) enter into any material closing Tax allocation agreement, settle Tax sharing agreement, Tax indemnity agreement or closing agreement relating to any material claim or assessmentTax, surrender in writing any right to claim a material Tax refund, offset or other reduction in Liability Tax liability or consent to any extension or waiver of the limitations limitation period applicable to any material Tax claim or assessment, in each case, with respect assessment relating to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practiceSubsidiaries;
(qt) adopt, modify from the form existing on the date except in connection with actions permitted by Section 6.04 hereof, take any action to exempt any Person from, or implement a rights planmake any acquisition of securities of the Company by any Person not subject to, “poison pill” any state takeover statute or similar arrangementstatute or regulation that applies to Company with respect to a Takeover Proposal or otherwise, including the restrictions on "business combinations" set forth in Section 203 of the DGCL, except as for Parent, Merger Sub or any of their respective Subsidiaries or Affiliates, or the transactions contemplated by this Agreement;
(ru) enter intoabandon, terminateencumber, modify convey title (in whole or waive in part), exclusively license or grant any right or other licenses to material right under, any Material Contract or PermitCompany IP, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(sv) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 2 contracts
Samples: Merger Agreement (Nanosphere Inc), Merger Agreement (Nanosphere Inc)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement Agreement, the Romulus Reorganization Documents or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of businessbusiness consistent with past practice, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to preserve substantially intact its and its Subsidiaries’ business organizationorganization intact, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement Agreement, the Romulus Reorganization Documents or as set forth in on Section 6.01 5.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld withheld, conditioned or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws bylaws (or other comparable organizational documents);
(b) (i) split, combine or reclassifyreclassify any Company Stock, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
Stock, (ciii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company);stock:
(dc) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights AgreementStock;
(ed) except as required by applicable Law or pursuant to Section 3.03by any Company Employee Plan or Contract in effect as of the date of this Agreement, (i) increase the compensation of payable or that could become payable by the Company to directors, officers or employees employees, other than increases in compensation made in the ordinary course of the Company or any of its Subsidiariesbusiness consistent with past practice, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except in connection with respect to employees with a base salary of less than $60,000 the Company’s annual or quarterly compensation review cycle or 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 accelerate rights under any Company Employee PlansPlans or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this 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;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(ge) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(hf) (i) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in provided that the case foregoing shall not prohibit the Company from transferring, licensing, selling, leasing or disposing of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(iii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(jg) 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 SubsidiariesCompany, 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiariespractice;
(kh) institute anyenter into or amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any Company Material Contract or any Lease with respect to material Real Estate or any other Contract or Lease that, if in effect as of the date hereof would constitute a Company Material Contract or Lease with respect to material Real Estate hereunder;
(i) institute, settle or compromise any Legal Actions pending or threatenedthreatened before any arbitrator, Legal Actions court or other Governmental Entity involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than (i) 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 (ii) the settlement of claims, liabilities or obligations reserved against on the most recent balance sheet of the Company; providedprovided that, that neither the Company nor any of its Subsidiaries shall not settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofCompany’s business;
(lj) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(mk) (i) settle or compromise any material Tax claim, audit or assessment, (ii) make or change any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, (iii) amend any material Tax Returns or file claims for material Tax refunds, or (iv) enter into any material closing agreement, surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company;
(l) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(nm) authorizeexcept in connection with actions permitted by Section 5.04 hereof, take any action to exempt any Person from, or make any commitment with respect acquisition of securities of the Company by any Person not subject to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change state takeover statute or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim similar statute or assessment, surrender any right regulation that applies to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, Company with respect to Taxes;
(p) fail to maintain an Acquisition Proposal or otherwise, including the restrictions on “business combinations” set forth in full force and effect material insurance policies covering Section 203 of the Company DGCL, except for Parent, Merger Sub or its any of their respective Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereofAffiliates, or implement a rights plan, “poison pill” or similar arrangement, except as the transactions contemplated by this Agreement;
(rn) enter intoabandon, terminateencumber, modify convey title (in whole or waive in part), exclusively license or grant any material right under, any Material Contract or Permitother licenses to Company IP, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(so) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Merger Agreement (Romulus Corp.)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries toExcept as contemplated by this Agreement, during the period from the date of this Agreement until hereof to the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent Company will, and will cause each of Parentits subsidiaries to, conduct its business operations in the ordinary course of business, business consistent with past practice and, to the extent consistent therewith, with no less diligence and effort than would be applied in the Company shallabsence of this Agreement, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts seek to preserve substantially intact its and its Subsidiaries’ current business organizationorganizations, seek to keep available the services service of its and its Subsidiaries’ current officers and employees, employees and seek to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees suppliers and other Persons others having business relationships dealings with itit to the end that goodwill and ongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, between the date of and except as otherwise expressly provided in this Agreement and Agreement, prior to the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of neither the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries tosubsidiaries will, without the prior written consent of Parent (Parent, which consent shall not be unreasonably withheld or delayed):withheld:
(a) amend or propose to amend its certificate or articles of incorporation or by-laws bylaws (or other comparable organizational documentssimilar governing instrument);
(b) splitauthorize for issuance, combine issue, sell, deliver or reclassifyagree or commit to issue, repurchasesell or deliver (whether through the issuance or granting of options, redeem warrants, commitments, subscriptions, rights to purchase or otherwise acquireotherwise) any stock of any class or any other securities or equity equivalents (including, or offer to repurchase, redeem or otherwise acquirewithout limitation, any stock options or stock appreciation rights), except for the grant of options to purchase up to 500,000 shares of Company Securities Common Stock to employees under the Company Plans, the sale of up to 191,981 shares of Company Common Stock to employees under the ESPP, the issuance of up to 1,668,571 shares of Company Common Stock pursuant to the conversion of the Convertible Notes in accordance with the terms thereof and the issuance or sale of shares of Company Subsidiary SecuritiesCommon Stock pursuant to options granted under -25- 30 the Company Plans or the Non-Plan Option Agreements (in each case, in the ordinary course of business and consistent with past practice);
(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, stock or property or otherwiseany combination thereof) in respect ofof its capital stock, make any other actual, constructive or enter into any Contract with deemed distribution in respect to the voting of, of any shares of its capital stock (other than dividends or distributions from otherwise make any payments to stockholders in their capacity as such, or redeem or otherwise acquire any of its direct securities or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries any securities of the Company)any of its subsidiaries;
(d) issueadopt a plan of complete or partial liquidation, selldissolution, pledgemerger, dispose of consolidation, restructuring, recapitalization or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees reorganization of the Company or any of its Subsidiariessubsidiaries (other than the Merger);
(e) alter through merger, (ii) enter into any new liquidation, reorganization, restructuring or amend in any material respect, any existing employment, severance, retention other fashion the corporate structure or change in control agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 as the result of the termination or resignation ownership of any officer or employee, or (iv) establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plansubsidiary;
(f) hire (i) incur or assume any officer long-term or employee, short-term debt or issue any debt securities except for borrowings under existing lines of credit in the replacement ordinary course of business and in amounts not material to the Company and its subsidiaries taken as a whole; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any current employee whose employment other person except in the ordinary course of business consistent with past practice and in amounts not material to the Company or any Subsidiary thereof is terminated or who resigns and its subsidiaries, taken as a whole, and except for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
obligations of the wholly owned subsidiaries of the Company; (giii) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to to, or investments in in, any Person, except for other person (w) intercompany loans, advances or capital contributions entered into in between or among other than to the wholly owned subsidiaries of the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising or customary loans or advances to employees in the ordinary course of business, business consistent with past practice and in amounts not material to the maker of such loan or advance); (yiv) advances to employees for expenses reimbursable under pledge or otherwise encumber shares of capital stock of the Company and/or or its Subsidiaries’ business expense reimbursement policysubsidiaries; or (v) mortgage or pledge any of its material assets, tangible or intangible, or create or suffer to exist any material Lien thereupon;
(g) except as may be required by law or as contemplated by this Agreement, enter into, adopt or amend or terminate any bonus, profit sharing, compensation, severance, termination, stock option (except for normal grants to newly hired or current employees, consistent with past practice), stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund, award or other arrangement for the benefit or welfare of any director, officer or employee in any manner, or (except as set forth in Section 4.1(g) of the Company Disclosure Schedule and (z) advances except for normal increases in the ordinary course of businessbusiness consistent with past practice that, in the aggregate, do not result in a material increase in benefits or compensation expense to the Company, and as required under -26- 31 existing agreements or in the ordinary course of business generally consistent with past practice) increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any plan and arrangement as in effect as of the date hereof (including, without limitation, the granting of stock appreciation rights or performance units);
(h) transfer, licenseacquire, sell, lease or otherwise dispose of any assets outside the ordinary course of business or any assets which in the aggregate are material to the Company and its subsidiaries taken as a whole, enter into any commitment or transaction outside the ordinary course of business or grant any exclusive distribution rights;
(whether i) except as may be required as a result of a change in law or in generally accepted accounting principles, change any of the accounting principles or practices used by way it;
(j) revalue in any material respect any of its assets, including, without limitation, writing down the value of inventory or writing-off notes or accounts receivable other than in the ordinary course of business or as required by generally accepted accounting principles;
(i) acquire (by merger, consolidation, sale or acquisition of stock or assets) any corporation, or otherwise), including the capital stock partnership or other business organization or division thereof or any equity interests in interest therein; (ii) enter into any Subsidiary of the Companycontract or agreement, other than in the case ordinary course of obsolete equipment business or assets being replacedamend in any material respect any of the Contracts or the agreements referred to in Section 2.18; (iii) authorize any new capital expenditure or expenditures which, individually, is in excess of $500,000 or, in each case the aggregate, are in excess of $5 million; provided, that none of the foregoing shall limit any capital expenditure already included in the Company's fiscal 1997 capital expenditure budget provided to Parent prior to the date hereof; or (iv) enter into or amend any contract, agreement, commitment or arrangement providing for the taking of any action that would be prohibited hereunder;
(l) make or revoke any tax election or settle or compromise any tax liability material to the Company and its subsidiaries taken as a whole or change (or make a request to any taxing authority to change) any material aspect of its method of accounting for tax purposes;
(m) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its subsidiaries or incurred in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right take (other than to claim a material refund, offset or other reduction Parent in Liability or seeking its consent to the taking of any extension or waiver of the limitations period applicable such action), propose to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereoftake, or implement a rights planagree in writing or otherwise to take, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(s) agree or commit to do any of the foregoing. Nothing actions described in Sections 4.1(a) through 4.1(n) or any action which would make any of the representations or warranties of the Company contained in this Agreement shall give Parent, directly untrue or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsincorrect in any material respect.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement until the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of ParentParent (which consent shall not be unreasonably withheld, conditioned, or delayed), use its reasonable best efforts to conduct its business in the ordinary course of businessbusiness consistent with past practice, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to maintain in effect all necessary licenses, permits, consents, franchises and approvals and authorizations, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees licensees, and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or Agreement, as set forth in Section 6.01 5.01 of the Company Disclosure Letter Letter, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld withheld, conditioned, or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents)Charter Documents;
(b) (i) split, combine combine, or reclassifyreclassify any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem redeem, or otherwise acquire, or offer to repurchase, redeem redeem, or otherwise acquire, any Company Securities or Company Subsidiary Securities;
, or (ciii) declare, set aside aside, or pay any dividend or distribution (whether in cash, stock, property property, or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the CompanySubsidiaries);
(dc) issue, sell, pledge, dispose of of, or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option Equity Award outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(ed) except as required by applicable Law or pursuant to Section 3.03, by any Company Employee Plan or Contract in effect as of the date of this Agreement (i) increase the compensation of directors, officers payable or employees of that could become payable by the Company or any of its SubsidiariesSubsidiaries to directors, officers, or employees, other than increases in compensation made to non-officer employees in the ordinary course of business and consistent with past practice, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except employee promotions made in the ordinary course of business consistent with respect to employees with a base salary of less than $60,000 past practice, including as the result of the termination or resignation of any officer or employee, or (iviii) establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any Company Employee PlansPlans or any plan, agreement, program, policy, trust, fund, or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this 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;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(ge) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances advances, or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into Person in between or among the Company and/or any excess of its wholly-owned Subsidiaries, (x) trade payables arising $250,000 in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessaggregate;
(hf) (i) transfer, license, sell, lease lease, or otherwise dispose of any assets (whether by way of merger, consolidation, sale of stock or assets, or otherwise) or pledge, encumber, or otherwise subject to any Lien (other than a Permitted Lien), any assets, including the capital stock or other equity interests in any Subsidiary of the Company; provided, other than in that the case foregoing shall not prohibit the Company and its Subsidiaries from transferring, selling, leasing, or disposing of obsolete equipment or assets being replaced, or granting non-exclusive licenses under the Company IP, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(iii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, or other reorganization;
(jg) repurchase, prepay, or incur any indebtedness for borrowed money (including any additional indebtedness pursuant to the CARES Act’s Paycheck Protection Program) or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice practice;
(h) enter into or pursuant amend or modify in any material respect, or consent to an existing financing facilitythe termination of (other than at its stated expiry date), any Company Material Contract or any Lease with respect to material Real Estate or any other Contract or Lease that, if in effect as of the date hereof would constitute a Company Material Contract or Lease with respect to material Real Estate hereunder, except for intercompany loans entered into any amendments or modifications in between or among the Company and/or any of its wholly-owned Subsidiariesordinary course consistent with past practices;
(ki) institute anyinstitute, or settle settle, or compromise any pending or threatened, Legal Actions Action involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 250,000 in the aggregate, other than (i) 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 (ii) the settlement of claims, liabilities, or obligations reserved against on the Company Balance Sheet; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofCompany’s business;
(lj) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(mk) (i) settle or compromise any Tax claim, audit, or assessment for an amount materially in excess of the amount reserved or accrued on the Company Balance Sheet (or most recent consolidated balance sheet included in the Company SEC Documents), (ii) make or change any material Tax election, change any annual Tax accounting period, or adopt or change any method of Tax accounting, (iii) amend any Tax Returns or file claims for material Tax refunds, or (iv) enter into any material closing agreement, surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or its Subsidiaries;
(l) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding understanding, or similar Contract with respect to any joint venture, strategic partnership partnership, or alliance;
(nm) authorizeexcept in connection with actions permitted by Section 5.04 hereof, take any action to exempt any Person from, or make any commitment with respect acquisition of securities of the Company by any Person not subject to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change state takeover statute or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim similar statute or assessment, surrender any right regulation that applies to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, Company with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company a Takeover Proposal or its Subsidiaries and its or their propertiesotherwise, assets and businesses in a form and amount consistent with past practice;
(q) adoptexcept for Parent, modify from the form existing on the date hereofMerger Sub, or implement a rights planany of their respective Subsidiaries or Affiliates, “poison pill” or similar arrangement, except as the transactions contemplated by this Agreement;
(rn) enter intoabandon, terminateallow to lapse, modify sell, assign, transfer, grant any security interest in otherwise encumber or waive dispose of any material Company IP, or grant any right under, or license to any Material Contract or Permit, material Company IP other than Contracts pursuant to non-exclusive licenses entered into with customers in the ordinary course of business consistent with past practice practice;
(it being understood thato) terminate or modify in any material respect, for the purposes or fail to exercise renewal rights with respect to, any material insurance policy;
(p) authorize or adopt, or publicly propose, a plan or agreement of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts complete or partial liquidation or dissolution of similar size and scope previously entered into by the Company or any of its Subsidiaries Subsidiaries;
(q) use the proceeds of the PPP Loan in any manner not permitted by applicable Law or take any action that would violate the ordinary course terms of business)the PPP Loan or constitute a violation of applicable Law with respect thereto; or
(sr) agree or commit commit, or announce an intention, to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Merger Agreement (Torotel Inc)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement and the Effective Time, the Company agrees (except as expressly contemplated by this Agreement or as required by applicable Law or with to the prior written extent that Parent shall otherwise consent of Parent, conduct in writing) to carry on its business in the usual, regular and ordinary course of businessin 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 therewithwith such business, the Company shall, and shall cause each of its Subsidiaries to, to use its commercially all reasonable efforts consistent with past practice and policies to preserve substantially intact its and its Subsidiaries’ present business organization, to keep available the services of its and its Subsidiaries’ current present officers and employees, to key employees and preserve its and its Subsidiaries’ present the Company's relationships with customers, suppliers, distributors, licensors, licensees licensees, and other Persons others having business relationships dealings with it. Without limiting , all with the generality goal of the foregoing, between the date of this Agreement preserving unimpaired its goodwill and ongoing businesses 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. Except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable LawAgreement, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Parent:
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter Enter into any Contract with respect to the voting ofcommitment, any shares of its capital stock (other than dividends activity or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company);
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does transaction not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(hb) transferTransfer to any person or entity any rights to any Company Intellectual Property or enter into any agreement with respect to Company Intellectual Property with any person or entity;
(c) Terminate any employees other than for cause or encourage any employees to resign from the Company;
(d) Amend or otherwise modify (or agree to do so), licenseor violate the terms of, the Stock Repurchase Agreement or any other Contract;
(e) Commence or settle any litigation;
(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, or repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock (or options, warrants or other rights exercisable therefor) except for (i) repurchases of Company Capital Stock upon the termination of service of any service providers of Company in accordance with the standard terms set forth in the agreements governing such repurchases, all of which agreements have been provided or made available to Parent, (ii) conversion of Company Preferred Stock, and (iii) exercises or conversion of Company Convertible Securities. Notwithstanding the foregoing, on the day immediately preceding the Closing Date, the Company may pay to its existing shareholders a cash dividend, in an amount approved by Parent, which approval shall not be unreasonably withheld (a) if the Closing Date and other assumptions shown on the projections as to cash available for dividends provided by the Company to Parent are accurate in all material respects, and the cash dividend amount does not exceed the the projected cash dividend amount shown on said projections, or (b) if said Closing Date and other assumptions are not accurate, the cash dividend amount does not exceed the Company's cash on hand and the amount of the dividend is equitably and appropriately adjusted from the projected dividend amount in light of the deviations from the original assumptions.
(g) Except for the issuance of shares of Company Capital Stock upon exercise or conversion of presently outstanding Company Options, Company Preferred Stock or the Note, issue, sell, lease grant, contract to issue, grant or sell, or authorize the issuance, delivery, sale or purchase of any shares of Company Capital Stock, Company Convertible Securities, or any securities, warrants, options or rights to purchase any of the foregoing;
(h) Cause or permit any amendments to its Articles of Incorporation or Bylaws;
(i) 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 business of the Company including any Company Intellectual Property;
(j) Sell, lease, license or otherwise dispose of any 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 Companyassets or properties of Company which are not Company Intellectual Property or create any security interest in such assets or properties;
(k) Grant any loan to any person or entity, other than in 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 case terms of obsolete equipment or assets being replacedany outstanding agreements related to borrowed money, in each case except for advances to employees for travel and business expenses in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofpractices;
(l) Grant any severance or termination pay (i) to any director or officer or (ii) to any employee or consultant, or increase in the salary or other compensation payable or to become payable by Company to any of its officers, directors, employees or advisors other than salary increases in the ordinary course of business consistent as to timing and amount with the prior year's increases, or declare, pay or make any material change in commitment or obligation of any method kind for the payment by Company of financial accounting principles a bonus or practicesother additional salary or compensation to any such person, except for or adopt or amend any change required by a change in GAAP employee benefit plan or applicable Lawenter into any employment contract;
(m) enter into Revalue any material agreementof its assets, agreement in principle, letter including without limitation writing down the value of intent, memorandum of understanding inventory or similar Contract with respect to any joint venture, strategic partnership writing off notes or allianceaccounts receivable;
(n) authorizeTake any action to accelerate the vesting schedule of any of the outstanding Company Options or Company Capital Stock, or make any commitment other than as a consequence of the effect of the transaction herein contemplated upon the Option Plans in accordance with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;their terms.
(o) makePay, change discharge or revoke satisfy, in an amount in excess of $5,000 individually or $10,000 in the aggregate any material Tax electionclaim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the Balance Sheet;
(p) Make or change any material election in respect of Taxes, adopt or change any accounting method in respect of Tax accounting, file any material amended Tax ReturnTaxes, enter into any material closing agreement, settle any material claim or assessmentassessment in respect of Taxes, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations limitation period applicable to any material claim or assessment, assessment in each case, with respect to of Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adoptEnter into any strategic alliance, modify from the form existing on the date hereof, joint development or implement a rights plan, “poison pill” joint marketing arrangement or similar arrangement, except as contemplated by this Agreementagreement;
(r) enter intoFail to pay or otherwise satisfy its monetary obligations as they become due, terminate, modify except such as are being contested in good faith;
(s) Waive or commit to waive any material right under, any Material Contract rights with a value in excess of $5,000 individually or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, $10,000 in the aggregate, substantially inconsistent with the terms and conditions found in ;
(t) Cancel or renew any insurance policy other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries than in the ordinary course of business); consistent with the prior policy.
(u) Alter, or enter into any commitment to alter, its interest in any corporation, association, joint venture, partnership or business entity in which the Company directly or indirectly holds any interest on the date hereof; or
(sv) Take, or agree in writing or commit otherwise to do take, any of the foregoing. Nothing contained actions described in this Agreement shall give ParentSections 4.1(a) through (u) above, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, any other action that would prevent the Company shall exercisefrom performing or cause the Company not to perform its covenants hereunder.
(w) Fail to perform its obligations under, consistent with waive, amend or otherwise modify any rights it may have, or take any other action to relinquish any "Repurchase Right" pursuant to any of the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsStock Repurchase Agreements.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Cypress Semiconductor Corp /De/)
Conduct of Business of the Company. The Company shall(a) Except (i) as expressly required by this Agreement, (ii) as set forth on Schedule 4.1 or (iii) as consented to in writing by the Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed), from and shall cause each of its Subsidiaries to, during the period from after the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality earlier of the foregoing, between Closing Date or the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company);
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date termination of this Agreement in accordance with its terms, the Sellers and the Company shall conduct the Business in the ordinary and regular course consistent with past practice (including any conduct that is reasonably related, complementary or incidental thereto). The Sellers and the Company shall (iiA) keep and maintain the Assets in accordance substantially the same operating condition and repair (normal wear and tear excepted) as currently maintained, but in any event no less than good working condition, (B) maintain and preserve intact the Company’s business organization and Permits, and maintain and preserve their relationships with the Stockholder Rights Agreement;suppliers, contractors, dealers, licensors, licensees, franchisees, distributors, officers, Employees, customers and others having business relations with the Company, (C) continue all existing policies of insurance in full force and effect and at least at such levels as are in effect on the date hereof, or to replace any such policies with equivalent replacements, (D) duly comply with all applicable Laws and Orders, and (E) terminate any warrants, options, agreements, convertible securities, performance units or other commitments or instruments pursuant to which the Company is or may become obligated to issue or sell any of its shares or other securities.
(eb) In addition to the requirements of Section 4.1(a), the Sellers will notify the Purchaser of any material Proceedings brought except as required expressly contemplated by applicable Law this Agreement or pursuant to Section 3.03except with the express prior written approval of the Purchaser, which approval shall not be unreasonably withheld, conditioned or delayed, and the Sellers and the Company shall not:
(i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 as the result of the termination or resignation of any officer or employee, or (iv) establish, adopt, enter into, materially amend, cancel, fail to renew, terminate, exercise renew or extend any discretion underMaterial Contract or Real Property Lease (or any Contract that would be a Material Contract or Real Property Lease if in effect on the date of this Agreement), or take waive, release or assign any action to accelerate material rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, claims thereunder other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiariespractices;
(iii) adopt declare, set aside or effect pay a plan of complete dividend on, or partial liquidationmake any other distribution (whether securities or property) in respect of, dissolution, restructuring, recapitalization or other reorganizationits equity securities;
(jiii) incur (A) issue, sell, transfer, pledge, grant, dispose of, encumber or deliver any indebtedness equity securities of any class or any securities convertible into or exercisable or exchangeable for borrowed money voting or guarantee equity securities of any such indebtedness class (except for the issuance of another Personequity securities upon exercise of options or warrants) or (B) adjust, issue split, combine, recapitalize or sell reclassify any debt securities of the Company’s equity securities;
(iv) redeem, purchase or optionsotherwise acquire any outstanding equity of the Company;
(v) acquire or agree to acquire in any manner (whether by merger or consolidation, warrantsthe purchase of an equity interest in or a material portion of the assets of or otherwise) any business or any corporation, calls partnership, association or other rights to acquire any debt securities of the Company business organization 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 division thereof of any other Person (other than the acquisition of assets (A) in the ordinary course of business consistent with past practices, or (B) not to exceed $25,000 in the aggregate;
(vi) adopt any whollyamendments to Company’s respective Fundamental Documents;
(vii) dissolve or liquidate the Company;
(viii) (i) except as required by the terms of any Benefit Arrangement or Material Contract as in effect on the date hereof and without the exercise of discretion, (A) increase the benefits available to any current or former Employee, director, consultant or other service provider of the Company; (B) increase the base salary, wages or bonus opportunity of any current or former Employee, director, consultant or other service provider of the Company; or (C) grant any severance, bonus, termination pay, equity or equity-owned Subsidiary based awards to any current or former Employee, director, consultant or other service provider of itthe Company; (ii) establish or adopt any plan, agreement, program, policy, trust, fund or other arrangement that would be a Benefit Arrangement if it were in existence as of the date hereof, or amend or terminate any Benefit Arrangement, except as required to comply with requirements of Law; (iii) terminate without “cause” or take any action that would constitute a “constructive termination” of any Employee of the Company at the level of director or above; (iv) except for the hiring or engagement of non-officer employees or individual independent contractors who have aggregate annual compensation that is not in excess of $100,000, hire or engage any employee or individual independent contractor of the Company; or (v) forgive or discharge in whole or in part any outstanding loans or advances to any present or former Employee, director, consultant or other service provider of the Company;
(ix) enter into any arrangement having transaction with any of its Employees or Affiliates (or any directors, managers, officers or Employees of any such Affiliate);
(x) sell or otherwise dispose of any material Assets outside the economic effect ordinary course of business;
(xi) sell, assign, license, transfer, pledge or otherwise dispose of any Intellectual Property rights outside the ordinary course of business.
(xii) (A) commence or settle any Proceeding involving monetary damages in excess of $10,000) or (B) waive or release any material rights or claims except in the ordinary course of business, or agree or consent to the issuance of any Order or settlement restricting or otherwise affecting its business operations in any material manner;
(xiii) except as required by GAAP or by applicable Law, change any of the foregoing, accounting principles or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages practices used by the Company or any of its Subsidiaries write up, write down or write off the book value of any amount exceeding material asset;
(xiv) make any capital expenditures in excess of $25,000 individually or $100,000 50,000 in the aggregate, ;
(xv) incur indemnification obligations (other than in respect of the ordinary course of business consistent with past practice);
(xvi) take any Legal Action brought against Parent action that is intended or Merger Sub arising out may reasonably be expected to result in any of the conditions to the transactions contemplated hereby set forth in ARTICLE V not being satisfied or in a breach or alleged breach material violation of any provision of this Agreement by Parent Agreement;
(xvii) (A) change the independent public accountant of the Company, (B) change the fiscal year of the Company, or Merger Sub; provided, that neither (C) to the Company nor extent any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has such action could have a material restrictive impact on or with respect to the business Tax liabilities of the Company prior to, on or after the Closing Date, make or change any Affiliate thereof;
(l) make Tax election, adopt or change any material change in any accounting method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accountingTaxes, file any material amended Tax Return, enter into any material closing agreement, settle or compromise any material proceeding with respect to any Tax claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability refund of Taxes or consent to any extension or waiver of the limitations limitation period applicable to any material Tax claim or assessmentassessment change any method of Tax accounting, in each casemake or change any Tax election, file any amended Tax Return, settle or compromise any Tax liability, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent closing agreement with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company respect to any Tax or surrender any of its Subsidiaries in the ordinary course of business)right to claim a Tax refund; or
(sxviii) agree or commit to do do, or resolve, authorize or approve any action to do, any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Stock Purchase Agreement (Imprimis Pharmaceuticals, Inc.)
Conduct of Business of the Company. The Except (i) as expressly contemplated by this Agreement, (ii) as described in Section 4.1 of the Company shallDisclosure Schedule, and or (iii) to the extent that Parent shall cause each of its Subsidiaries tootherwise consent in writing (such consent or declination to consent not to be unreasonably delayed), during the period from the date hereof to the earlier of the Effective Time and the termination of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or in accordance with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewithterms, the Company shall, and shall cause each of its Subsidiaries Subsidiary to, use conduct its commercially reasonable efforts operations in the ordinary course of business consistent with past practices and, to the extent consistent therewith, and with no less diligence and effort than would be applied in the absence of this Agreement, seek to preserve substantially intact its and its Subsidiaries’ current business organizationorganizations, to keep available the services service of its and its Subsidiaries’ current officers and employees, to employees and preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensorslessors, licensees creditors, employees, contractors and other Persons others having business relationships dealings with itit with the intention that its goodwill and ongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, between the date of except as otherwise expressly provided in this Agreement and except as described in Section 4.1 of the Company Disclosure Schedule, prior to the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of neither the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries toSubsidiary shall, without the prior written consent of Parent (which such consent shall or declination to consent not to be unreasonably withheld or delayed):) of Parent:
(ai) amend its Certificate of Incorporation or propose to amend its certificate of incorporation or by-laws bylaws (or other comparable organizational documentssimilar governing instrument);
(bii) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), or alter or amend the terms of, any stock of any class or any other debt or equity securities or equity equivalents (including any stock options or stock appreciation rights) except for (A) the issuance and sale of Shares pursuant to options granted under the Company Plans prior to the date hereof, (B) options granted under Company Plans to purchase Shares to new hires of the Company or any Subsidiary up to an aggregate maximum amount of Three Hundred Twenty Thousand (320,000) Shares subject to options, provided that no such options may be issued that will provide for acceleration as a result of the consummation of the transactions contemplated by this Agreement whether or not in connection with any other event, including termination of employment, (C) options granted under Company Plans to purchase Shares to current employees in connection with any adjustments or promotions on a basis consistent with past practices of the Company up to a maximum of Ten Thousand (10,000) Shares subject to options individually and an aggregate maximum of One Hundred Sixty Thousand (160,000) Shares subject to options, provided that no such options may be issued that will provide for acceleration as a result of the consummation of the transactions contemplated by this Agreement whether or not in connection with any other event, including termination of employment;
(iii) split, combine or reclassifyreclassify any shares of its capital stock, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or other distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect ofof its capital stock, make any other actual, constructive or enter into any Contract with deemed distribution in respect to the voting of, any shares of its capital stock or otherwise make any payments to stockholders in their capacity as such, or redeem or otherwise acquire any of its securities or any securities of any Subsidiary (other than dividends the repurchase of Restricted Company Shares and cancellation of Company Stock Options at repurchase price that is less than the last quoted sales price of the Shares on the Nasdaq National Market following termination of employment with, or distributions from its direct or indirect wholly-owned Subsidiaries to provision of services to, the Company or other direct or indirect wholly-owned Subsidiaries of the Companyany Subsidiary);
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 as the result of the termination or resignation of any officer or employee, or (iv) establishadopt a plan of complete or partial liquidation, adoptdissolution, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition restructuring, recapitalization or other reorganization (other than the Merger);
(v) alter through merger, liquidation, reorganization, restructuring or any other fashion the corporate structure of stock any Subsidiary (other than any wholly owned Subsidiary or assetsforeign Subsidiary that would be wholly owned but for a nominal number of director or similar shares being owned by a foreign national as required by the law of the jurisdiction of such foreign Subsidiary’s organization);
(vi) (A) incur or assume any long-term or short-term debt or issue any debt securities in excess of One Million Dollars ($1,000,000) or trade payables arising in the ordinary course of business consistent with past practices; (B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise, ) for the obligations of any other person except for obligations of any Subsidiary incurred in the ordinary course of business or Person or division thereof or consistent with past practices; (C) make any loans, advances or capital contributions to or investments in any Person, except for other person (w) intercompany loans, advances other than to a Subsidiary or capital contributions entered into in between customary loans or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding practices); (D) pledge or otherwise subject to any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more Lien shares of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 capital stock of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” Subsidiary 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, Other Interests; or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice (E) mortgage or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or pledge any of its wholly-owned Subsidiariesmaterial properties or assets, tangible or intangible, or create or suffer to exist any new material Lien (or any increase or expansion of the scope of any existing Lien) thereupon other than as a result of modifications to synthetic lease agreements outstanding on the date hereof;
(kvii) institute anyexcept as may be permitted by clause (viii) below or as may be required by Applicable Law, (A) enter into, adopt, make, amend in any manner or settle or compromise terminate any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company employment agreement or any bonus payments other than bonus payments to any person who is not a participant under the Change in Control Plan and that are not in excess of its Subsidiaries of any amount exceeding Twenty Thousand Dollars ($25,000 20,000) individually or Five Hundred Thousand Dollars ($100,000 500,000) in the aggregate, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement other than (x) offer letters to new hires provided that no such offer letter shall provide (1) for the grant of options under Company Plans that will provide for acceleration, or (2) provide any Legal Action brought against Parent or Merger Sub arising out severance rights, in either case as a result of a breach or alleged breach of the transactions contemplated by this Agreement whether or not in connection with any other event, including termination of employment, or alter any “at will” employment relationship and (y) options under Company Plans to purchase Shares permitted by Parent clause (ii), or Merger Sub; provided(B) enter into, that neither adopt amend in any manner or terminate any pension, retirement, deferred compensation, employment, health, life, or disability insurance, dependent care, severance or other employee benefit plan agreement, trust, fund or other arrangement for the Company nor benefit or welfare of any director, officer, employee or consultant in any manner or (C) increase in any manner the compensation or fringe benefits of its Subsidiaries shall settle any director, officer or employee or pay any benefit not required by any plan and arrangement as in effect as of the date hereof (including the granting of stock options, restricted stock, stock appreciation rights or performance units);
(viii) (A) pay or agree to settle pay any Legal Action which settlement involves a conduct remedy severance or injunctive termination pay to any director, officer, employee or similar relief or has a material restrictive impact consultant, except payments (1) made pursuant to written agreements outstanding on the business of the Company date hereof or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction written policy in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing existence on the date hereof, the terms of which are in all material respects completely and correctly disclosed on Section 4.1(a)(viii) of the Company Disclosure Schedule and copies of which have been provided to Parent, (2) that are set forth in Section 4.1(a)(viii) of the Company Disclosure Schedule with respect to the termination of employees or implement a rights planconsultants or (3) as required by Applicable Law or (B) amend or agree to amend the Change in Control Plan, “poison pill” add any individual to the coverage of the Change in Control Plan or similar arrangement, except as contemplated by this Agreementincrease any person’s benefits under the Change in Control Plan;
(rix) enter intoexercise its discretion with respect to or otherwise voluntarily accelerate the vesting of any Company Stock Option as a result of the Merger, terminateany other change of control of the Company (as defined in the Company Plans) or otherwise;
(x) (A) except as permitted by clause (xiii)(E) below, modify purchase, acquire, lease or waive license-in any material right underassets in any single transaction or series of related transactions having a fair market value in excess of Two Million Dollars ($2,000,000) in the aggregate, or sell, transfer or otherwise dispose of any Material Contract or Permit, material assets other than Contracts entered into with customers sales of its products and other non-exclusive licenses of software in the ordinary course of business consistent with past practice practices; (it being understood thatB) enter into any exclusive license, for distribution, marketing or sales agreements; (C) enter into any commitment to any person to (1) develop software without charge or (2) incorporate any software into any of the purposes Company’s products; (D) sell, transfer or otherwise dispose of this subsection, “any Intellectual Property other than sales of its products and other non-exclusive licenses that are in the ordinary course of business and consistent with past practicepractices or (E) grant “most favored nation” shall not include entering pricing to any Person;
(xi) except as may be required as a result of a change in law or in United States generally accepted accounting principles, change any of the accounting principles, practices or methods used by it;
(xii) revalue any of its assets or properties, including writing down the value of assets or writing-off notes or accounts receivable, other than in the ordinary course of business consistent with past practices or due to changes in GAAP requiring such revaluation that are adopted after the date hereof;
(A) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other person or division or business unit thereof or any equity interest therein; (B) enter into any contract or agreement that would be material to the Company and its Subsidiaries, taken as a whole other than customer contracts in the ordinary course of business consistent with past practices; (C) amend, modify or waive any right under any Material Contract having of the Company or any Subsidiary; (D) modify its standard warranty terms for its products or services or amend or modify any product or service warranties in effect as of the date hereof in any material manner that is adverse to the Company or any Subsidiary; or (E) authorize any additional or new capital expenditure or expenditures that individually or in the aggregate are in excess of One Million One Hundred Thousand Dollars ($1,100,000) per month, provided that the amount by which capital expenditures in any month shall be less than One Million One Hundred Thousand Dollars ($1,100,000) shall be carried over to future months to increase the maximum that may be spent on capital expenditures in such future months;
(xiv) make or rescind any material election relating to Taxes or settle or compromise any material Tax liability or enter into any closing or other agreement with any Tax authority with respect to any material tax liability; or file or cause to be filed any material amended Tax Return, file or cause to be filed any claim for refund of Taxes previously paid, or agree to an extension of a statute of limitations with respect to the assessment or determination of Taxes;
(xv) fail to file any material Tax Returns when due, fail to cause such Tax Returns when filed to be materially true, correct and conditions (including terms and conditions regarding pricing and Liabilities) complete, prepare or fail to file any Tax Return in a manner inconsistent with past practices in preparing or filing similar Tax Returns in prior periods or, on any such Tax Return of the Company, take any position, make any election, or adopt any method that areis inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods, in each case, except to the aggregateextent required by Applicable Law, substantially inconsistent or fail to pay any material Taxes when due;
(xvi) settle or compromise any pending or threatened suit, action or claim that (A) relates to the transactions contemplated hereby or (B) the settlement or compromise of which would involves more than One Million Dollars ($1,000,000) or that would otherwise be material to the Company with the terms respect to non-monetary matters and conditions found in its Subsidiaries or relates to any Intellectual Property matters;
(xvii) enter into any licensing, distribution, sponsorship, advertising, merchant program or other Contracts of similar size and scope previously entered into contracts, agreements, or obligations which provide for payments by the Company or any Subsidiary in an amount in excess of its Subsidiaries One Million Dollars ($1,000,000) over the noncancelable term of the agreement;
(xviii) terminate any material software development project that is currently ongoing, except pursuant to the terms of existing contracts with customers;
(xix) fail to make in a timely manner any filings with the ordinary course SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(xx) subject to Sections 4.2 and 4.3 hereof, engage in any action with the intent to directly or indirectly adversely impact any of business)the transactions contemplated by this Agreement;
(xxi) knowingly take any action that would result in a failure to maintain trading of the Shares on the Nasdaq National Market; or
(sxxii) take or agree in writing or commit otherwise to do take any of the foregoing. Nothing actions described in Sections 4.1(i) through 4.1(xxi) (and it shall use all reasonable efforts not to take any action that would make any of the representations or warranties of the Company contained in this Agreement shall give Parent, directly untrue or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsincorrect).
Appears in 1 contract
Samples: Merger Agreement (Edwards J D & Co)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement until the Effective Time, the Company shall, and shall cause each of its Subsidiaries, except as expressly contemplated by this Agreement or Agreement, as required by applicable Law Law, or with the prior written consent of ParentAmerican Resources (which consent shall not be unreasonably withheld, conditioned, or delayed), to use its reasonable best efforts to conduct its business in the ordinary course of business, and, to business consistent with past practice. To the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees licensees, and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or Agreement, as set forth in Section 6.01 5.01 of the Company Disclosure Letter Schedule, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent American Resources (which consent shall not be unreasonably withheld withheld, conditioned, or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents)Charter Documents;
(b) (i) split, combine combine, or reclassifyreclassify any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem redeem, or otherwise acquire, or offer to repurchase, redeem redeem, or otherwise acquire, any Company Securities or Company Subsidiary Securities;
, or (ciii) declare, set aside aside, or pay any dividend or distribution (whether in cash, stock, property property, or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the CompanySubsidiaries);
(dc) issue, sell, pledge, dispose of of, or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option Equity Award outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(ed) except as required by applicable Law or pursuant to Section 3.03, by any Company Employee Plan or Contract in effect as of the date of this Agreement (i) increase the compensation of directors, officers payable or employees of that could become payable by the Company or any of its SubsidiariesSubsidiaries to directors, officers, or employees, other than increases in compensation made to non-officer employees in the ordinary course of business consistent with past practice, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except in connection with respect to employees with a base salary of less than $60,000 the Company’s annual or quarterly compensation review cycle or as the result of the termination or resignation of any officer or employee, or (iviii) establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any Company Employee PlansPlans or any plan, agreement, program, policy, trust, fund, or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this 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;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(ge) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances advances, or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into Person in between or among the Company and/or any excess of its wholly-owned Subsidiaries, (x) trade payables arising $100,000.00 in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessaggregate;
(hf) (i) transfer, license, sell, lease lease, or otherwise dispose of any assets (whether by way of merger, consolidation, sale of stock or assets, or otherwise) or pledge, encumber, or otherwise subject to any Lien (other than a Permitted Lien), any assets, including the capital stock or other equity interests in any Subsidiary of the Company; provided, other than in that the case foregoing shall not prohibit the Company and its Subsidiaries from transferring, selling, leasing, or disposing of obsolete equipment or assets being replaced, or granting of non-exclusive licenses under the Company IP, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(iii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, or other reorganization;
(jg) 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 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiariespractice;
(kh) institute anyenter into or amend or modify in any material respect, or settle consent to the termination of (other than at its stated expiry date), any Company Material Contract or any Lease with respect to material Real Estate or any other Contract or Lease that, if in effect as of the date hereof would constitute a Company Material Contract or Lease with respect to material Real Estate hereunder;
(i) institute, settle, or compromise any pending or threatened, Legal Actions Action involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 50,000.00 in the aggregate, other than (i) any Legal Action brought against Parent or Merger Sub American Resources arising out of a breach or alleged breach of this Agreement by Parent American Resources, and (ii) the settlement of claims, liabilities, or Merger Subobligations reserved against on the Company Balance Sheet; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofCompany’s business;
(lj) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(mk) (i) settle or compromise any material Tax claim, audit, or assessment for an amount materially in excess of the amount reserved or accrued on the Company Balance Sheet, (ii) make or change any material Tax election, change any annual Tax accounting period, or adopt or change any method of Tax accounting, (iii) amend any material Tax Returns or file claims for material Tax refunds, or (iv) enter into any material closing agreement, surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or its Subsidiaries;
(l) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding understanding, or similar Contract with respect to any joint venture, strategic partnership partnership, or alliance;
(nm) authorizeexcept in connection with actions permitted by Section 5.04 hereof, take any action to exempt any Person from, or make any commitment with respect acquisition of securities of the Company by any Person not subject to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change state takeover statute or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim similar statute or assessment, surrender any right regulation that applies to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, Company with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company a Takeover Proposal or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangementotherwise, except as for American Resources or the transactions contemplated by this Agreement;
(rn) enter intoabandon, terminateallow to lapse, modify sell, assign, transfer, grant any security interest in otherwise encumber or waive dispose of any material Company IP, or grant any right under, or license to any Material Contract or Permit, material Company IP other than Contracts pursuant to non-exclusive licenses entered into with customers in the ordinary course of business consistent with past practice practice;
(it being understood thato) terminate or modify in any material respect, for or fail to exercise renewal rights with respect to, any material insurance policy;
(p) except to the purposes of this subsectionextent expressly permitted by Section 5.04 or Section 7, “consistent with past practice” shall not include entering into take any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) action that areis intended or that would reasonably be expected to, individually or in the aggregate, substantially inconsistent with prevent, materially delay, or materially impede the terms and conditions found in consummation of the Merger, or the other Contracts of similar size and scope previously entered into transactions contemplated by the Company or any of its Subsidiaries in the ordinary course of business)this Agreement; or
(sq) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of businessbusiness consistent with past practice, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to preserve substantially intact its and its Subsidiaries’ ' business organization, to keep available the services of its and its Subsidiaries’ ' current officers and employees, to preserve its and its Subsidiaries’ ' present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with itthe Company or any of its Subsidiaries. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable Law, the transactions contemplated by this Agreement, or the transactions 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, nor shall it permit any of its Subsidiaries to, 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 or delayed):so that the Company can comply with the terms of the same:
(ai) amend or propose to amend its certificate 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 incorporation or by-laws (or other comparable organizational documentsCompany Stock pursuant to the terms of any outstanding Company Stock Options);
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(ciii) declare, set aside aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or otherwisea combination thereof) in with respect ofto, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company)stock;
(div) issuereclassify, sellcombine, pledgesplit, dispose of subdivide or encumber redeem, repurchase or otherwise acquire, directly or indirectly, any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(ev) except as required by applicable Law or pursuant to Section 3.03, acquire (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, including by merger, consolidation, or acquisition of stock or assets, or otherwise, any business or Person or division thereof ) or make any loans, advances or capital contributions to or investments investment in any PersonEquity Interest in any Person or any assets, except for (w) intercompany loansloans or debt securities thereof, advances acquire or capital contributions entered divest any Real Property Leases or other interest in real estate or enter into in between or among the Company and/or amend or modify any of its wholly-owned Subsidiariesmaterial Contract, (x) trade payables arising in the ordinary course of businesspartnership, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policyarrangement, and (z) advances in the ordinary course of businessjoint development agreement or strategic alliance;
(hvi) transferrepurchase, license, sell, lease prepay or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 incur satisfy any Liens other than Permitted Liens in connection with the foregoingLiabilities, other than (i) performance of contractual obligations in accordance with their terms, or (ii) payment, discharge, settlement or satisfaction in accordance with the financing terms of Liabilities that have been (a) disclosed in the most recent Company Financial Statements (or the notes thereto) included in the Company Securities Filings filed prior to the date hereof or contemplated by documents made available to Parent prior to the date hereof or (b) incurred since the date of such financial statements in the ordinary course trade payables of business consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiariespractice;
(kx) institute anyadopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment other reorganization of monetary damages by the Company or any of its Subsidiaries of (other than the Merger);
(xi) institute, settle or compromise any amount exceeding $25,000 individually Legal Actions pending or $100,000 in the aggregatethreatened 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 the most recent balance sheet of the Company included in the Company Securities Filings, in amounts not to exceed those so reserved; provided, provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofCompany's business;
(lxii) transfer, license, 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 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 being replaced, in each case in the ordinary course of business consistent with past practice;
(xiii) 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 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;
(xiv) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(mxv) except as required by applicable Law or by any Company Employee Plan or Contract in effect as of the date of this Agreement, (i) increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors, officers or employees, (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 past or present officers or employees, (iii) promote any officers or employees, 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 accelerate rights under any Company Employee Plans or any plan, agreement, agreement program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in principle, letter existence as of intent, memorandum the date of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorizethis Agreement, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent contribution to any extension or waiver Company Employee Plan, other than contributions required by Law, the terms of the limitations period applicable to any material claim or assessment, such Company Employee Plans as in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, hereof or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers that are made in the ordinary course of business consistent with past practice practice;
(it being understood thatxvi) except in connection with actions permitted by Section 6.4 hereof, for take any action to exempt any Person from, or make any acquisition of securities of the purposes of this subsectionCompany by any Person not subject to, “consistent any state takeover statute or similar statute or regulation that applies to the Company with past practice” shall not include entering into any Contract having terms and conditions (respect to a Takeover Proposal or otherwise, including terms and conditions regarding pricing and Liabilities) that are, the restrictions on "business combinations" set forth in the aggregateBCA, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company except for Parent, Merger Sub or any of its their respective Subsidiaries or Affiliates, or the transactions contemplated by this Agreement;
(xvii) incur any material Liability except in the ordinary course of business)business consistent with past practice; or
(sxviii) commit or agree or commit to do take any of the foregoing. Nothing contained actions described in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.Sections 6.1.1
(i) through 6.1.1
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from From the date of this Agreement until the Effective TimeTime (or such earlier date on which this Agreement may be terminated pursuant to Section 7.01), unless Parent shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed) or except as set forth in Section 5.01 of the Company Disclosure Schedule or as otherwise expressly permitted, contemplated or required by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewithLaw, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company);
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03to, (i) increase the compensation of directors, officers or employees of the Company or any of conduct its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, and (ii) use its commercially reasonable efforts to preserve intact and maintain its business organization and goodwill of material suppliers and customers and other Persons having business relationships with the Company, and to keep available the services of their present officers and employees on terms and conditions substantially comparable to those currently in effect. In addition to and without limiting the generality of the foregoing, except as required by applicable Law or this Agreement or as expressly set forth in Section 5.01 of the Company Disclosure Schedule, from the date hereof until the Effective Time (or such earlier date on which this Agreement may be terminated pursuant to Section 7.01), without the prior written consent of Parent (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit any of the Company Subsidiaries to:
(a) adopt or propose any change to the Company Charter or Company Bylaws or organizational documents of a Company Subsidiary;
(b) (i) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock or property) in respect of any of its capital stock (other than dividends or distributions declared, set aside, made or paid by any wholly-owned Company Subsidiary to the Company or to another wholly-owned Company Subsidiary), (ii) split, combine, subdivide 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, convertible into, or denominated with reference to, such other security) in respect of, in lieu of, or in substitution for, shares of its capital stock, or (iii) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company or any Company Subsidiaries, or any other equity interests or any rights, warrants or options to acquire any such shares or interests except for purchases, redemptions or other acquisitions of capital stock or other securities required (or permitted in connection any net share settlement or Tax withholding) by the terms of the Company Plans or any award thereunder;
(c) issue, sell, grant, pledge or otherwise encumber any shares of its capital stock or other securities (including any options, restricted stock, restricted stock units, performance units, warrants or any similar security exercisable for, or convertible into, such capital stock or similar security) other than pursuant to the exercise of outstanding Stock Options granted under the Equity Plans in accordance with their present terms (as modified or as may be required by applicable Laws) and consistent with past practice;
(d) merge or consolidate with any other Person;
(e) acquire assets with a value or purchase price in the aggregate in excess of $500,000, other than in the ordinary course of business consistent with past practice;
(f) sell, lease, license, subject to a material Lien, or otherwise surrender, relinquish or dispose of any assets with a value or purchase price in the aggregate in excess of $500,000, other than in the ordinary course of business consistent with past practice;
(g) (i) make any loans, advances or capital contributions to, or investments in, any Person other than (x) loans, advances or capital contributions to, or investments in wholly-owned Company Subsidiaries, (y) pursuant to any existing Contract, or (z) advances to employees in the ordinary course of business consistent with past practice, (ii) create, incur, guarantee or assume any indebtedness for borrowed money, issuances of debt securities, guarantees, loans or advances, or (iii) make or commit to make any capital expenditure other than in an aggregate amount not to exceed the amount set forth in the Company’s fiscal 2012 capital expenditure budget, a copy of which has been provided to Parent prior to the date of this Agreement;
(h) materially increase benefits under any Company Plan, accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Plan as currently in effect on the date of this Agreement, fail to make any required contribution to any Company Plan, merge or transfer any Company Plan or the assets or liabilities of any Company Plan, change the sponsor of any Company Plan (other than as would not materially increase the Company’s or any Company Subsidiary’s liabilities or obligations under such Company Plan), or terminate any Company Plan or establish any additional benefit plan that would be a Company Plan, if it were in existence as of the date of this Agreement, in each case excluding any transfer, license, sale, lease except as required by terms of this Agreement or other disposition in connection with any transaction between as required by applicable Law or among the terms of a Company Plan or Contract which the Company and/or one or more any Company Subsidiary is a party as currently in effect on the date of its wholly-owned Subsidiariesthis Agreement;
(i) increase the compensation or benefits provided to any Company Employees, except as required by applicable Law or the terms of a Company Plan or Contract which the Company or any Company Subsidiary is a party as currently in effect on the date of this Agreement or in connection with annual promotion-related or merit-based increases for employees whose annual compensation is less than $100,000;
(j) settle or compromise any Action or enter into any consent, decree, injunction or similar restraint or form of equitable relief in settlement of any Action in any manner that requires the payment of more than $150,000 or limits in any respect the ability of the Company to conduct its business as presently conducted;
(k) (i) make, change or rescind any express or deemed material election relating to Taxes except in the ordinary course of business consistent with past practice, (ii) settle or compromise any material Action relating to Taxes or surrender any right to obtain a material Tax refund or credit, offset or other reduction in Tax liability, (iii) enter into any closing agreement with respect to any material Taxes, or (iv) change any method of reporting income or deductions for federal income tax purposes from those employed in the preparation of its federal income tax returns for the taxable year ending December 31, 2010;
(l) other than in the ordinary course of business consistent with past practice, enter into, renew, extend, amend or terminate any Material Contract (or any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement);
(m) materially change any financial reporting or accounting methods, principles or practices of the Company or any Company Subsidiary, except for any such change required by applicable Law or GAAP;
(n) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 reorganization 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business)Subsidiary; or
(so) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement until the Effective Timeearlier of the Closing Date and the termination of this Agreement, except as expressly contemplated or permitted by this Agreement or as may be required by applicable Law or with the prior written consent of regulation or as consented to in writing by Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, (i) conduct their business only in the ordinary course consistent with past practice in all material respects; and (ii) use its commercially reasonable best efforts to maintain and preserve substantially intact its and its Subsidiaries’ in all material respects their business organization, to keep available employees and advantageous business relationships and retain the services of its and its Subsidiaries’ their current officers and current employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting During the generality of the foregoing, between period from the date of this Agreement until the earlier of the Closing Date and the Effective Timetermination of this Agreement, except as otherwise expressly set forth in Section 6.4 of the Company Disclosure Letter, as contemplated or permitted by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as may be required by applicable LawLaw or regulation, the Company shall not, nor and shall it permit any of cause its Subsidiaries not to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) (i) amend or propose to amend its memorandum of association, articles of association, and certificate or articles of incorporation or by-laws (or other comparable equivalent organizational documents);
; (bii) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
reclassify their outstanding share capital; (ciii) declare, set aside or pay any non-cash dividend or distribution non-cash distribution; or (whether in cashiv) repurchase, stockredeem or otherwise acquire any shares of the share capital or other equity interests of any Subsidiary of the Company;
(b) issue, property sell, pledge or otherwise) in respect dispose of, or enter into any Contract with respect agree to the voting issue, sell, pledge or dispose of, or encumber any additional shares of, or any options, warrants or rights of any kind to acquire any shares of its share capital stock of any class or any debt or equity securities which are convertible into or exchangeable for such share capital, except for transactions between the Company and its Subsidiaries;
(c) (i) incur any indebtedness for borrowed money or assume, guarantee, endorse or otherwise as an accommodation become responsible for the long-term indebtedness of any other Person, other than in the ordinary course of business consistent with past practice; or (ii) enter into any derivative contracts or investments in marketable securities (other than dividends or distributions from its direct or indirect whollygovernment-owned Subsidiaries to backed securities in the Company or other direct or indirect wholly-owned Subsidiaries ordinary course of the Company’s cash management);
(d) issuemerge, sellliquidate, pledgerecapitalize, dispose consolidate or consummate any other business combination involving the Company or any of its Subsidiaries, except any internal reorganizations, liquidations or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as consolidations involving existing Subsidiaries of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights AgreementCompany;
(e) make any expenditures in connection with the purchase of the minority interests in its Subsidiaries (except to the extent reimbursed by the Sellers);
(f) make or agree to make any new capital expenditure or expenditures, other than as required pursuant to any agreement entered into prior to the date hereof or in the ordinary course of business and consistent with the Company’s capital expenditure budget as of the date hereof;
(g) sell, lease, license, mortgage or otherwise encumber or subject to any lien or otherwise dispose of any of the Company’s or any of its Subsidiaries’ material property or material assets other than sales and dispositions of inventory in the ordinary course of business consistent with past practice in all material respects, and other than end licensing of products in the ordinary course of business consistent with past practice;
(h) make any material investment either by purchase of stock or securities, contributions of capital, property transfers, or purchase of any property or assets of any Person, except any internal reorganizations, liquidations or consolidations involving existing Subsidiaries of the Company;
(i) except as required by to comply with applicable Law or pursuant to Section 3.03by the terms of any Employee Benefit Plan, Employment Agreement or other Contract in effect on the date hereof, (iA) increase the compensation of directorsor benefits of, officers or employees pay any bonus to, any current or former director, officer, employee or consultant of the Company or any of its Subsidiaries, other than (ii1) enter into normal increases in cash compensation and employee benefits to employees that are not Senior Executives and (2) payment of bonuses, in each case, in the ordinary course of business consistent with past practice, (B) grant any new current or amend former director, officer, employee or consultant of the Company or any of its Subsidiaries change in any material respect, any existing employmentcontrol, severance, retention or change termination compensation or benefits, or any increase therein, except for payments of severance benefits pursuant to existing plans, policies, programs, practices, agreements and arrangements in control agreement effect as of the date hereof in the ordinary course of business consistent with any of its past or present directors, officers or employeespractice, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 as the result of the termination or resignation of any officer or employee, or (ivC) establish, adopt, enter into, amendmaterially amend or terminate any collective bargaining agreement, terminateEmployee Benefit Plan or Employment Agreement, exercise (D) accelerate the time of payment or vesting of any discretion under, rights or take any action to accelerate rights under any Company Employee Plansbenefits, or make any contribution to material determinations, under any Company Employee Plan;
(f) hire any officer Benefit Plan or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned SubsidiariesEmployment Agreement, (xE) trade payables arising grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Employee Benefit Plan, other than, in the case of employees that are not Senior Executives, in the ordinary course of businessbusiness consistent with past practice, or (yF) advances take any action to fund or in any other way secure the payment of compensation or benefits under any employee plan, agreement, Contract or arrangement, Employee Benefit Plan or Employment Agreement; provided, however, that the foregoing clauses shall not restrict the Company from entering into or making available to newly hired employees or to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course context of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replacedpromotions, in each case in the ordinary course of business consistent with past practice, in each case excluding any transferplans, licenseagreements, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationbenefits and compensation arrangements;
(j) incur settle 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 material Action (i) involving payment by the Company or its Subsidiaries of money damages or waive or release any material rights or claims in excess of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” $400,000 per Action or other Contract to maintain any financial statement condition of any other Person $1.3 million in the aggregate; or (other than any wholly-owned Subsidiary of itii) or enter into any arrangement having the economic effect of any of the foregoing, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among involving receipt by the Company and/or or its Subsidiaries of money damages or waive or release any material rights or claims in excess of its wholly-owned Subsidiaries$1 million per Action or $7.5 million in the aggregate;
(k) institute anyvoluntarily terminate, cancel, renew, or settle request or compromise agree to any pending material amendment or threatenedmaterial modification to, Legal Actions involving injunctive relief material change in, or material waiver under, any Company Material Contract, or enter into any Contract that would have been a Company Material Contract had it been entered into prior to the payment execution of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregatethis Agreement, other than any Legal Action brought against Parent Contract (i) for the sale of products or Merger Sub arising licensing in or out of a breach products in the ordinary course of business; (ii) providing for any capital expenditure to the extent permitted by Section 6.4(f); or alleged breach of this Agreement (iii) for any Contract relating to directors, officers and employees, restrictions on which shall be governed by Parent or Merger Sub; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofSection 6.4(i);
(l) make any material materially change in any method its methods, practices or policies of financial or Tax accounting principles or practicesin effect at December 31, 2008, except for any change as required by a change changes in GAAP IFRS, the Companies Act, Law or applicable Lawregulation, as concurred in by the Company’s independent public accountants in the case of changes in financial accounting;
(m) enter into any material agreementsubject to Section 10.2(a), agreement in principle, letter of intent, memorandum of understanding make or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change election or file or amend any material method Tax Return other than in the ordinary course of Tax accountingbusiness, file make or surrender any claim for a material refund of Taxes, settle or compromise any material amended Tax Returnliability, enter into any material closing agreement, settle agreement or advance pricing agreement relating to any material claim or assessmentTax, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessmentassessment (other than as a result of an extension to file a Tax Return in the ordinary course of business);
(n) enter into transactions with any executive officer or director of the Company or any Person owning five percent (5%) or more of the Shares (or any of such Person’s immediate family members or Affiliates), other than any transaction which involves payment by or to such Person of not more than $175,000 in each casethe aggregate and other than pursuant to employment arrangements or reimbursement of business expenses;
(o) take any action that would be reasonably likely to impair the ability of the Company or its Subsidiaries to perform, with respect to Taxesor materially delay the performance of, their obligations under this Agreement in any material respect, including consummation of the transactions contemplated hereby;
(p) fail to maintain in full force and effect material insurance policies covering the Company enter into any collective bargaining agreement or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practiceany successor collective bargaining agreement;
(q) adoptwrite up, modify from write down or write off the form existing on book value of any assets of the date hereofCompany and its Subsidiaries, or implement a rights plan, “poison pill” or similar arrangementin excess of $5 million in the aggregate, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice and for depreciation and amortization in accordance with IFRS and provisions of the Companies Act consistently applied;
(it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering r) enter into any Contract containing any provisions having terms and conditions (including terms and conditions regarding pricing and Liabilities) the effect of providing that are, in the aggregate, substantially inconsistent consummation of the Sale or any other transactions contemplated by this Agreement or compliance by the Company with the terms and conditions found provisions of this Agreement will conflict with, result in any violation or breach of, or constitute a default (with or without notice or lapse of time or both) under, such Contract, or give rise under such Contract to any right or, or result in, a termination, right of first refusal, material amendment, revocation, cancellation or material acceleration, or a loss of a material benefit or the creation of any material Lien, other Contracts than Permitted Liens, upon any of similar size and scope previously entered into by the properties or assets of the Company or any of its Subsidiaries Subsidiaries, or to any increased, accelerated or additional rights or entitlements of any Person, except to the extent such conflicts, results, defaults, rights, losses or entitlements are required by applicable Law;
(s) take any action that could reasonably be expected to result in any of the ordinary course of business)conditions to the Sale set forth in Article VII not being satisfied in any respect as promptly as reasonably practicable and in any case prior to the Outside Date; or
(st) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Share Purchase Agreement (Watson Pharmaceuticals Inc)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of ParentParent (which consent shall not be unreasonably withheld, delayed, or denied), conduct its business in the ordinary course of businessbusiness consistent with past practice, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between during the period from the date of this Agreement and until the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in on Section 6.01 5.01 of the Company Disclosure Letter Schedule or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld withheld, delayed, or delayed):denied other than with respect to Sections 5.01(b), (c), (g), (j), (m) and (o), for which Parent’s consent shall be given in its sole discretion), directly or indirectly:
(a) amend amend, supplement, modify or otherwise change or propose to amend amend, supplement, modify or otherwise change its certificate of incorporation or by-laws (or other comparable organizational documents)Charter Documents;
(b) (i) split, subdivide, combine or reclassifyreclassify any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
Securities (cunless the acquisition of such Company Securities is pursuant to an escrow arrangement with a Company Subsidiary existing as of the date of this Agreement and in accordance with the terms thereof), (iii) declare, set aside aside, establish a record date for or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends paid to the Company or distributions any of its Subsidiaries from its a direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries Subsidiary of the Company)) or (iv) enter into, modify, amend or supplement any Contract relating to any Company Securities;
(dc) issue, transfer, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities or authorize, propose or agree to the issuance, transfer, sale, pledge, disposition or encumbrance of, any Company Securities or Company Subsidiary Securities, other than (i) in accordance with Section 2.07(c) hereof, (ii) the issuance of shares of Company Common Stock Shares upon the exercise of any Company Stock Option Equity Award outstanding as of the date of this Agreement in accordance with its terms, or (iii) the issuance of Shares in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with its their terms, or (ii) in accordance with the Stockholder Rights Agreement;
(ed) except as required by applicable Law or pursuant by any Company Employee Plan or written Contract that has been disclosed or made available to Section 3.03Parent in effect as of the date of this Agreement and in accordance with the terms thereof, (i) grant or announce any equity or incentive awards or, other than in connection with annual increases of base salary the ordinary course of business consistent with past practice with respect to employees (other than directors and officers), increase the compensation of directors, officers payable or employees of that could become payable by the Company or any of its SubsidiariesSubsidiaries to its directors, officers or employees, (ii) enter into any new new, or amend in any material respectrespect any existing, any existing employment, severance, retention or consulting, bonus, retention, retirement, change in control or similar agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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, materially increase benefits under or take any action to accelerate terminate rights under any Company Employee PlansPlans or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this 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, (fiv) hire any new employees, unless such hiring is in the ordinary course of business consistent with past practice and is with respect to employees having an annual base salary and incentive compensation opportunity not to exceed $150,000 or (v) pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other employee benefit not required by any existing Company Employee Plan in effect on the date of this Agreement to any employee, officer or employee, except for the replacement director of any current employee whose employment with the Company or any Subsidiary thereof is terminated of its Subsidiaries, whether past or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000present;
(ge) acquire, acquire (whether by merger, consolidation, acquisition of stock business combination, recapitalization, sale, liquidation, dissolution, winding-up, spin-off, split-off, share exchange or assetssimilar transaction, or otherwiseby lease, license, long-term supply arrangements or other transaction having the same economic effect as an acquisition), any business or interest in any Person or division thereof or any assets thereof for consideration in excess of $100,000 individually, or $500,000 in the aggregate, or make any loans, advances or capital contributions to or investments in any Person, except for Person (w) intercompany other than loans, advances or capital contributions entered into in between or among the Company and/or any of its to wholly-owned Subsidiaries, (x) trade payables arising fees for services and advancement of reimbursable expenses, in each case in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessconsistent with past practice);
(hf) (i) transfer, license, sell, lease lease, abandon, assign or otherwise dispose of any assets of the Company or any of its Subsidiaries (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 Company, other than in provided that the case foregoing shall not prohibit the Company and its Subsidiaries from transferring, licensing, selling, leasing or disposing of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transferor (ii) adopt, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt enter into or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(jg) repurchase, redeem, defease, cancel, assume, incur or otherwise become responsible for, or acquire or modify the terms of, any indebtedness for borrowed money or guarantee any such indebtedness of another Person, incur any capital lease obligations, 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables and any payments due or borrowings under the Company’s revolving credit facility in the ordinary course of business consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiariespractice;
(ki) institute anyother than as consistent with the Company’s past practice and on customary terms and conditions that do not involve an amount in excess of $250,000 individually, enter into or amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any Customer Contract, Company Material Contract or any Material Lease or any other Contract or Lease that, if in effect as of the date hereof, would constitute a Customer Contract, Company Material Contract or Material Lease, (ii) waive any material default under, or release, settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by material claim against the Company or any of its Subsidiaries or any liability or obligation owing to the Company or any of its Subsidiaries under, any Customer Contract, Company Material Contract or any Material Lease or any other Contract or Lease that, if in effect as of the date hereof, would constitute a Customer Contract, Company Material Contract or Material Lease, or (iii) amend or modify in any material respect the engagement letter with the Company Financial Advisor listed in Section 3.10 of the Company Disclosure Schedule;
(i) settle, release, waive or compromise any pending or threatened Legal Action of or against the Company or any of its Subsidiaries for an amount exceeding in excess of $25,000 100,000 individually or $100,000 500,000 in the aggregate, other than or entailing the incurrence of (x) any Legal Action brought against Parent obligation or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business liability of the Company or any Affiliate thereofof its Subsidiaries in excess of such amounts, or (y) any obligation that would impose any material restrictions on the business or operations of the Company or any of its Subsidiaries;
(lj) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(mk) (i) settle or compromise any Tax claim, audit or assessment, (ii) make or change any Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, (iii) amend any Tax Returns or file claims for Tax refunds, or (iv) enter into any material closing agreement, agreement surrender in principlewriting any right to claim a Tax refund, letter offset or other reduction in Tax liability or consent to any extension or waiver of intentthe limitation period applicable to any Tax claim or assessment relating to the Company or its Subsidiaries;
(l) implement any employee layoffs that would implicate the WARN Act;
(m) except in connection with actions permitted by Section 5.05 hereof, memorandum take any action to exempt any Person from, or make any acquisition of understanding securities of the Company by any Person not subject to, any state takeover statute or similar Contract statute or regulation that applies to Company with respect to a Takeover Proposal or otherwise, including the restrictions on “business combinations” set forth in Section 203 of the DGCL, except for Parent, Merger Sub or any joint ventureof their respective Subsidiaries or Affiliates, strategic partnership or alliancethe transactions contemplated by this Agreement;
(n) authorize, or make any commitment with respect to, any single capital expenditure, except as contemplated by expenditure in excess of $200,000 or capital expenditures for the Company’s existing fiscal year 2012 Capital BudgetCompany and its Subsidiaries in excess of $750,000 in the aggregate;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver new line of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxesbusiness outside of its existing business segments;
(p) pay, discharge, settle or satisfy any material Liabilities, other than (i) performance of contractual obligations in accordance with their terms, or (ii) payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice;
(q) fail to maintain in full force and effect, let lapse or abandon any material Company IP;
(r) fail to maintain in full force and effect material insurance policies covering the Company or and its Subsidiaries and its or their respective properties, assets and businesses in a form and amount consistent with past practice;
(qs) adopt, modify from enter into any transaction that would require disclosure on Section 3.11 of the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this AgreementCompany Disclosure Schedule;
(rt) dismiss the Company’s auditor, unless the Company determines in good faith that there is a business reason for such dismissal and the Company must notify Parent of such proposed dismissal prior to dismissal;
(u) enter into, terminate, modify into any collective bargaining agreement or waive any material right under, any Material other Contract or Permitrelationship with any labor organization, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood thatwork council, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of trade union or similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business)employee representative; or
(sv) agree agree, authorize or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Merger Agreement (Research Pharmaceutical Services, Inc.)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from From the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, Company shall conduct its business and operations in the ordinary course of business, and, to the extent business consistent therewith, the Company shall, with past practice and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to (i) preserve substantially intact its and its Subsidiaries’ present business organization, to (ii) keep available the services of its and its Subsidiaries’ current directors, officers and employees, to preserve its key employees and its Subsidiaries’ present (iii) maintain good relationships with its customers, suppliers, distributors, licensors, licensees lenders and other Persons others having material business relationships with itit in the ordinary course of business consistent with past practice. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the Parent’s prior written consent of Parent (consent, which consent shall not be unreasonably withheld withheld, conditioned or delayed)::
(a) amend its Charter Documents (whether by merger, consolidation or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documentsotherwise);
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, reclassify any Company Securities Capital Stock of the Company (whether by merger, consolidation or Company Subsidiary Securitiesotherwise);
(c) declare, set aside or pay any dividend or other distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company Capital Stock (whether by merger, consolidation or other direct or indirect wholly-owned Subsidiaries of the Companyotherwise);
(d) issuedirectly or indirectly redeem, sell, pledge, dispose of repurchase or encumber otherwise acquire any Company Securities Capital Stock (whether by merger, consolidation or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreementotherwise);
(e) except as required issue, deliver or sell any Company Capital Stock or any securities exercisable for or convertible into Company Capital Stock (whether by applicable Law merger, consolidation or otherwise) other than pursuant to Section 3.03, (i) increase the compensation exercise of directors, officers or employees options outstanding as of the date hereof under the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Option Plan;
(f) hire amend any officer or employee, except for the replacement term of any current employee whose employment with the Company Capital Stock or any Subsidiary thereof is terminated securities exercisable for or who resigns for any reasonconvertible into Company Capital Stock (whether by merger, provided that such replacement employee’s annual base salary does not exceed $60,000consolidation or otherwise);
(g) acquireincur any capital expenditures or any Liabilities in respect thereof, by merger, consolidation, acquisition of stock other than any capital expenditures that do not exceed $100,000 individually or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising $250,000 in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessaggregate;
(h) transfer, license, sell, lease or otherwise dispose of any assets acquire (whether by way of merger, consolidation, sale of stock or assets, consolidation or otherwise), including the capital stock directly or other equity indirectly, any assets, securities, properties, interests in any Subsidiary of the Companyor businesses, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt sell, lease or effect a plan of complete otherwise transfer, or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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, create or incur any Liens other than Permitted Liens in connection with Lien on, any assets, securities, properties or interests of the foregoingCompany, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice practice;
(it being understood thatj) acquire, for sell, lease, license, transfer, pledge, encumber, grant or dispose of (whether by merger, consolidation, purchase, sale or otherwise) any Intellectual Property of the purposes Company, or enter into any Company Material Contract, or take any action, with respect to any Intellectual Property of this subsection, “the Company outside the ordinary course of business consistent with past practice” shall not include entering , or do any act or knowingly omit to do any act whereby any material Intellectual Property of the Company may become invalidated, abandoned, unmaintained, unenforceable or dedicated to the public domain;
(k) other than in connection with actions permitted by Section 4.6(g) or 4.6(h), make any loans, advances or capital contributions to, or investments in, any other Person;
(l) create, incur, assume, suffer to exist or otherwise be liable with respect to any Indebtedness;
(m) adopt, establish, enter into, amend or terminate, or increase the benefits under, any Company Employee Plan, or other employee benefit, plan, practice, program, policy or Contract that would be a Company Employee Plan if in effect on the date of this Agreement, in any case other than as may be required by the terms of such Company Employee Plan or other plan, practice, program, policy or Contract as may be required by applicable Legal Requirement or in order to qualify under Sections 401 and 501 of the Code;
(n) subject to Section 4.19, increase compensation or fringe benefits (including granting of stock options or right to acquire any other Company Capital Stock) of any current or former director, officer or employee of the Company except for annual increases of compensation in the ordinary course of business, consistent with past practice;
(o) grant or increase any severance, retention, change-of-control or similar payments to any current or former director, officer, employee or consultant of the Company;
(p) enter into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that arelimits or otherwise restricts in any material respect the Company or any successor thereto or that would reasonably be expected, after the Effective Time, to limit or restrict in any respect the Company, Parent or any of their respective Affiliates, from engaging or competing in any line of business, in any location or with any Person;
(q) enter into, amend or modify in any material respect or terminate any license of Intellectual Property (other than in the aggregateordinary course of business consistent with past practice) or any Company Material Contract, substantially inconsistent with or otherwise waive, release or assign any material rights, claims or benefits thereto of the terms and conditions found Company;
(r) change any methods of accounting, except as required by changes in other Contracts of similar size and scope previously entered into GAAP as agreed to by its independent public accountants;
(s) settle (i) any material Legal Proceeding involving or against the Company, (ii) any stockholder Legal Proceeding against the Company or any of its Subsidiaries in officers or directors, or (iii) any Legal Proceeding that relates to the ordinary course of business)transactions contemplated by this Agreement; or
(st) agree agree, commit or commit offer to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Merger Agreement (Viggle Inc.)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from From the date of this Agreement until the Effective TimeTime (or such earlier date on which this Agreement may be terminated pursuant to Section 7.01), unless Parent shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed) or except as set forth in Section 5.01 of the Company Disclosure Schedule or as otherwise expressly permitted, contemplated or required by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewithLaw, the Company shall, and shall cause each of the Company Subsidiaries to (i) conduct its Subsidiaries tobusiness in all material respects in the ordinary course of business consistent with past practice, including maintaining its Tower Assets, (ii) use its commercially reasonable efforts to preserve substantially intact its the business organization of the Company and its the Company Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its the current relationships of the Company and its Subsidiaries’ present relationships the Company Subsidiaries with Governmental Entities, customers, suppliers, distributors, licensors, licensees suppliers and other Persons having with which the Company or any Company Subsidiary has material business relationships with itand (iii) if applicable, use any proceeds of insurance recovered to repair or replace any Tower Assets in the event of any damage, loss, destruction or theft to such Tower Assets (provided that the Company shall not be required to make any such repairs or replacement in the event that no insurance proceeds are recovered and, provided, further, that the Merger Consideration shall not be subject to reduction for any such damage, loss, destruction or theft). Without In addition to and without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise required by applicable Law or expressly contemplated by this Agreement or as set forth in Section 6.01 5.01 of the Company Disclosure Letter Schedule, from the date of this Agreement until the Effective Time (or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries tosuch earlier date on which this Agreement may be terminated pursuant to Section 7.01), without the prior written consent of Parent (which such consent shall not to be unreasonably withheld withheld, conditioned or delayed):), the Company shall not, and shall cause the Company Subsidiaries not to:
(a) amend make, adopt or propose any change to amend its certificate the Charter Documents or Company Bylaws or organizational documents of incorporation or by-laws (or other comparable organizational documents)a Company Subsidiary;
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(ci) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stockstock or property) in respect of any of its capital stock or other equity interests (other than dividends or distributions declared, property set aside, made or otherwisepaid by any wholly-owned Company Subsidiary to the Company or to another wholly-owned Company Subsidiary or to the Series A Holders pursuant to the Charter Documents, which in the case of any cash dividends or distributions shall be paid prior to the Closing), (ii) split, combine, subdivide or reclassify any of its capital stock or other equity interests or issue or propose or authorize the issuance of any other securities (including options, warrants or any similar security exercisable for, convertible into, or denominated with reference to, such other security) in respect of, or enter into any Contract with respect to the voting in lieu of, or in substitution for, shares of its capital stock, or (iii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of the Company Subsidiaries, or any other rights, warrants or options to acquire any such shares or interests except for purchases, redemptions or other acquisitions of capital stock or other securities required (or permitted in connection with any net share settlement or Tax withholding) by the terms of any Company Plans or any award thereunder;
(c) issue, sell, grant, pledge or otherwise encumber any shares of its capital stock or other securities (including any options, restricted stock, restricted stock units, performance units, warrants or any similar security exercisable for, or convertible into, such capital stock or similar security) other than dividends additional shares of Series A Preferred Stock to the Series A Holders pursuant to the Charter Documents or distributions from its direct the issuance to the Series A Holders of additional shares of Series A Preferred Stock or indirect wholly-owned Subsidiaries promissory notes on terms no less favorable to the Company or other direct or indirect wholly-owned Subsidiaries than the Notes, in each case solely for fair value and solely for the purpose of financing the ongoing operating expenses of the Company)Company and the Company Subsidiaries and other actions the Company is permitted to take without the consent of Parent pursuant to this Section 5.01, payments required in connection with the Development Tower Sites, and payment obligations with respect to out-of-pocket costs, fees and expenses incurred by the Company and the Company Subsidiaries arising in connection with or related to this Agreement, the Ancillary Documents or the consummation of the transactions contemplated hereby and thereby, prior to the Closing;
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof thereof, or acquire any Tower Assets that fulfill the Outside OCB Criteria;
(e) (i) sell, lease, license, subject to a Lien (other than Permitted Encumbrances or transfers between or among the Company and/or any wholly-owned Company Subsidiaries), or otherwise surrender, relinquish, allow to lapse or expire or dispose of any properties or assets (tangible or intangible) with a value or purchase price in the aggregate in excess of $100,000, other than in the ordinary course of business consistent with past practice or the transfer of any properties or assets to the Company or a wholly-owned Company Subsidiary or (ii) take any other action intended to convert any long-term asset of the Company or any Company Subsidiary into a Current Asset;
(f) except as otherwise permitted by this Agreement (including with respect to the acquisition of Tower Assets pursuant to subclause (d) above), make any capital expenditures or commitments that will create or result in commitments in respect of capital expenditures in excess of the limitations set forth in Schedule 8.09(a)(ii); provided, however, that the Company shall be permitted to make expenditures or commitments that exceed those set forth in Schedule 8.09(a)(ii) (i) by an amount not to exceed $50,000 with respect to any individual Tower Site or Tower Development Site and (ii) by an amount not to exceed (x) $300,000 in the aggregate with respect to all Tower Sites and Development Tower Sites if the Closing occurs within ninety (90) days of the date of this Agreement or (y) $500,000 in the aggregate with respect to all Tower Assets and Development Tower Sites if the Closing has not occurred within ninety (90) days of the date of this Agreement;
(i) make any loans, advances or capital contributions to to, or investments in in, any Person, except for Person other than (wx) intercompany loans, advances or capital contributions entered into in between to, or among investments in, any of the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances as required pursuant to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policyany existing Contract, and or (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case for out-of-pocket expenses to employees in the ordinary course of business consistent with past practice, in each case excluding or (ii) create, incur, guarantee or assume any transferIndebtedness, license, sale, lease or other disposition in connection with any transaction between or among than additional indebtedness to the Company and/or one or more of its wholly-owned SubsidiariesSeries A Holders permitted pursuant to Section 5.01(c);
(i) adopt increase the compensation or benefits under, or increase or accelerate contributions with respect to, any Company Plan, other than in the ordinary course of business, accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Plan as currently in effect on the date of this Agreement or terminate any Company Plan or establish any additional benefit plan that would be a plan Company Plan, if it were in existence as of complete or partial liquidationthe date of this Agreement, dissolution, restructuring, recapitalization or other reorganization;
(jii) incur hire 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 new employee of the Company or any Company Subsidiary that would receive an annual salary in excess of its Subsidiaries$200,000, guarantee or hire 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 new employees of the foregoingCompany or any Company Subsidiary that would receive annual salaries in excess of $500,000 in the aggregate, or incur that upon or following termination of employment could be entitled to any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice payment or pursuant to an existing financing facility, except for intercompany loans entered into in between or among benefit from the Company and/or or any of its wholly-owned Subsidiaries;
Company Subsidiary (k) institute any, including severance or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages unemployment compensation paid by the Company or any Company Subsidiary) becoming due to any such employee in an amount greater than three (3) times any such employee’s monthly base salary, at the rate in effect immediately prior to termination of its Subsidiaries employment (excluding payment of any amount exceeding accrued but unpaid base salary, other compensation, or paid time off, such amounts or benefits that such employee is otherwise entitled to receive under the terms of any employee benefit plan, reimbursement for unreimbursed business expenses properly incurred by such employee, and other amounts or benefits otherwise required to be paid or provided pursuant to applicable Law), (iii) waive any performance condition, or accelerate the vesting conditions, applicable to any compensatory award, in each case, except as required by terms of this Agreement or as required by applicable Law or the terms of a Company Plan to which the Company or any of the Company Subsidiaries is a party as currently in effect on the date of this Agreement and set forth in Section 5.01 of the Company Disclosure Schedule or (iv) amend, modify, terminate or waive any provision of the Company’s 2015 Incentive Bonus Plan or any grant thereunder;
(i) settle or compromise any Action in any manner that requires the payment of more than $25,000 100,000 individually or $100,000 200,000 in the aggregateaggregate or enter into any consent, decree, injunction, restrictive covenant or similar restraint or form of equitable relief in settlement of any Action, other than (i) 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; provided, that neither (ii) the Company nor any settlement of its Subsidiaries shall settle claims, liabilities or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact obligations reserved against on the business most recent balance sheet of the Company included in the Company SEC Reports solely for consideration consisting of a cash payment, (iii) as provided in Section 5.09(b) or (iv) any Affiliate thereofAdverse Action, subject to the terms, conditions and restrictions set forth in the Indemnification Agreement;
(lj) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(oi) make, change or revoke rescind any express or deemed material election relating to Taxes, (ii) settle or compromise any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim Action relating to Taxes or assessment, surrender any right to claim obtain a material refundTax refund or credit, offset or other reduction in Liability or consent Tax liability, (iii) enter into any closing agreement with respect to any material Taxes, (iv) file any amendment to any Tax Return with respect to any material amount of Taxes, (v) agree to any extension or waiver of the statute of limitations period applicable with respect to the assessment or determination of a material amount of Taxes, or (vi) change any material claim method of accounting for Tax purposes or assessmentchange any Tax accounting period; except, in each case, with respect to Taxescase as is required by applicable Law;
(pk) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice practice, enter into, renew, extend, amend or terminate any Material Contract (or any Contract that would have been a Material Contract had it being understood that, for been entered into prior to the purposes date of this subsection, “the Agreement);
(l) other than in the ordinary course of business consistent with past practice” shall not include entering into , enter into, amend, renew, extend or terminate a Tenant Lease or Ground Lease (or any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously would have been a Tenant Lease or Ground Lease had it been entered into by prior to the date of the Agreement);
(m) change in any material respect any financial reporting or accounting methods, principles or practices of the Company or any Company Subsidiary, except for any such change required by applicable Law or GAAP;
(n) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any Company Subsidiary;
(o) add, subtract, modify or relocate any Improvements or Communications Equipment from the Tower Site, other than routine maintenance or replacement of existing equipment with similar equipment and in accordance with the ordinary course of business consistent with past practice, subject to the rights of the Tenants under the Tenant Leases to install or collocate antennas and other equipment;
(p) amend or modify in any material respect, or terminate (other than at its Subsidiaries stated expiration date), any of the Permits held by it as of the date hereof, except for continued prosecution of Permits for Tower Sites and prospective Tower Sites in the ordinary course of business);
(q) enter into any collective bargaining agreement or other agreement with any labor organization;
(r) adopt a “shareholder rights plan” or “poison pill”; or
(s) agree enter into a definitive written agreement or commit legally obligate itself to do take any of the actions set forth in clauses (a) through (r) of this Section 5.01. The acquisition of any additional Tower Assets that fulfill the Outside OCB Criteria shall require the prior written approval of the Parent, which approval shall not be unreasonably withheld, conditioned or delayed. Prior to making any request for approval, the Company shall have entered into a letter of intent with respect to the acquisition of such Tower Assets, which may be conditioned on receipt of Parent’s approval and a copy of which shall be provided to Parent prior to any related request for approval. Notwithstanding the foregoing, in the event that Parent fails to respond in writing to any request for approval of any such acquisition or request for approval pursuant to the first sentence of this paragraph or Section 5.01(d), within five (5) Business Days of the Company’s delivery of request therefor, Parent shall be deemed to have approved such acquisition of such Tower Asset. Nothing contained in this Agreement In the event that Parent expressly denies any such request for approval of an acquisition of a Tower Asset, Parent shall give Parentnot, and shall cause its Affiliates not to, directly or indirectly, acquire any direct or indirect interest or rights in or to any or all the right to control or direct Tower Assets covered by such request until the earlier of (x) nine (9) months after the date of the Company’s initial request for approval and (y) the Closing Date. Notwithstanding the foregoing, nothing in this Section 5.01 shall (A) prevent Parent from acquiring any Tower Assets which Parent is actively pursuing (whether alone or its Subsidiaries’ operations as part of a larger portfolio of Tower Assets) at the time of the Company’s initial request for approval relating to such Tower Assets or (B) prevent the Company from, or require the Company to obtain Parent’s consent prior to, acquiring title to the Effective Timeland upon which any Tower (and/or any buildings, structures, other improvements and facilities) is located. Prior to The Company shall not, and shall cause the Effective TimeCompany Subsidiaries not to, take any action following the delivery of the Estimated Closing Statement that would cause the amounts set forth on the Estimated Closing Statement for the Closing Indebtedness, the Company shall exercise, consistent with 2015 Bonus Amount or the terms and conditions Excess Severance Cost to be inaccurate as of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsthe Closing.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement and continuing until the Effective Time, except as expressly contemplated by earlier of the termination of this Agreement or as required by applicable Law or with the prior written Closing Date, the Company agrees (except to the extent that Parent shall otherwise consent of Parentin writing), conduct to carry on its business in the usual, regular and ordinary course of businessin 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 therewith, the Company shall, and shall cause each of its Subsidiaries towith such business, use its commercially all reasonable efforts consistent with past practice and policies to preserve substantially intact its and its Subsidiaries’ the Company's present business organization, to keep available the services of its and its Subsidiaries’ current present officers and employees, to key employees and preserve its and its Subsidiaries’ present their relationships with customers, suppliers, distributors, licensors, licensees licensees, and other Persons others having business relationships dealings with it, all with the goal of preserving unimpaired the Acquired Assets, including without limitation, the Company's goodwill and ongoing businesses at the Closing Date. Without limiting The Company shall promptly notify Parent of any event or occurrence involving the generality Company or the Acquired Assets, whether or not in the ordinary course of business of the foregoingCompany, between the date of this Agreement and the Effective Time, except which could reasonably be expected to have a Material Adverse Effect. Except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable LawAgreement, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Parent:
(a) amend Enter into any commitment or propose to amend its certificate transaction not in the ordinary course of incorporation business or by-laws (any commitment or other comparable organizational documents)transaction of the type described in Section 3.7 hereof;
(b) Transfer to any person or entity any rights with respect to Company Intellectual Property Rights;
(c) Enter into or amend 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;
(d) Amend or otherwise modify (or agree to do so), except in the ordinary course of business, or violate the terms of, any contract or agreement set forth on Company Schedule 3.12;
(e) Commence any litigation;
(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 reclassifyreclassify 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, or repurchase, redeem or otherwise acquire, directly or offer to repurchase, redeem or otherwise acquireindirectly, any shares of its capital stock (or options, warrants or other rights exercisable therefor); provided that the Company Securities or Company Subsidiary Securities;
(c) may declare, set aside or pay dividends or make any dividend or distribution other distributions (whether in cash, stock, property stock or otherwiseproperty) in respect of any of its capital stock as long as at the Closing Date, the Company's current assets are equal to or greater than its total liabilities less accrued rent as determined in accordance with GAAP;
(g) Issue, grant, deliver or sell or authorize or propose the issuance, grant, delivery or sale of, or enter into any Contract with respect to purchase or propose the voting purchase of, any shares of its capital stock (other than dividends or distributions from its direct securities convertible into, or indirect wholly-owned Subsidiaries subscriptions, rights, warrants or options to the Company acquire, or other direct agreements or indirect wholly-owned Subsidiaries of the Company);
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise commitments of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, character obligating it to issue any such shares or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessother convertible securities;
(h) transferCause or permit any amendments to its Articles of Incorporation or Bylaws;
(i) Acquire or agree to acquire by merging or consolidating with, licenseor by purchasing any assets or equity securities of, sellor by any other manner, lease any business or any corporation, partner ship, 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;
(j) Sell, lease, license or otherwise dispose of any assets (whether by way of merger, consolidation, sale of stock its properties or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, other than in the case of obsolete equipment or assets being replaced, in each case except in the ordinary course of business and consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiariespractices;
(ik) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) incur Incur any indebtedness for borrowed money other than under the Company's existing line of credit consistent with past practice or guarantee any such indebtedness of another Person, or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofothers;
(l) make Grant any material change in any method of financial accounting principles severance or practices, except for any change required by a change in GAAP or applicable Law;
termination pay (mi) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership director or alliance;
officer or (nii) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable other employee except payments made pursuant to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing standard written agreements outstanding on the date hereof. 38 (m) Adopt or amend any employee benefit plan, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that areemployment contract, in pay or agree to pay any special bonus or special remuneration to any director or employee, or increase the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company salaries or any wage rates of its Subsidiaries in the ordinary course of business); or
(s) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.employees;
Appears in 1 contract
Conduct of Business of the Company. (a) The Company shall, covenants and shall cause each of its Subsidiaries toagrees that, during the period from the date of this Agreement hereof until the Effective Time, except (i) as expressly contemplated by this Agreement or Agreement, (ii) as disclosed in Section 6.1 of the Company Disclosure Letter, (iii) as required by applicable Law or with the prior written (iv) unless Parent shall otherwise consent of Parentin writing (which consent shall not be unreasonably withheld, conduct its business in the ordinary course of business, and, to the extent consistent therewithconditioned or delayed), the Company shall, and shall cause each of its Subsidiaries to, conduct in all material respects its business in the ordinary course of business consistent with past practice, to use its commercially reasonable efforts to preserve substantially intact its business organization and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, use commercially reasonable efforts to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees suppliers and other Persons having with which it has material business relationships relations; provided, however, that no action by the Company or its Subsidiaries with it. Without limiting the generality respect to matters specifically addressed by any provision of the foregoing, between Section 6.1(b) shall be deemed a breach of this sentence unless such action constitutes a breach of such provision of Section 6.1(b).
(b) Between the date of this Agreement and the Effective Time, except (w) as otherwise expressly contemplated by this Agreement or Agreement, (x) as set forth disclosed in Section 6.01 6.1 of the Company Disclosure Letter or Letter, (y) as required by applicable Law, the Company or (z) unless Parent shall not, nor shall it permit any of its Subsidiaries to, without the prior written otherwise consent of Parent in writing (which consent shall not be unreasonably withheld withheld, conditioned or delayed):), neither the Company nor any of its Subsidiaries shall:
(ai) amend or propose to amend otherwise change its certificate of incorporation or by-laws (bylaws or other comparable organizational documents)any similar governing instruments;
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company);
(dii) issue, deliver, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon capital stock, or grant to any Person any right to acquire any shares of its capital stock, in each case, or securities convertible into or exchangeable for shares of its capital stock, except pursuant to the exercise of any Company Stock Option outstanding under Options or settlement of Company Stock Plans Rights outstanding as of the date of this Agreement in accordance with its terms, or (ii) hereof and in accordance with the Stockholder terms of such instruments or ESPP Purchased Rights Agreementin accordance with Section 6.18;
(eiii) 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 as required for any dividend or distribution by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees a wholly-owned Subsidiary of the Company to the Company or to another wholly-owned Subsidiary of the Company);
(iv) adjust, split, combine, redeem, repurchase or otherwise acquire any shares of its Subsidiaries, capital stock of the Company (ii) enter into any new except in connection with withholding to satisfy the exercise price or amend in any material respect, any existing employment, severance, retention or change in control agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except Tax obligations with respect to employees with a base salary of less than $60,000 Company Stock Awards outstanding as the result of the termination date hereof or resignation repurchases or reacquisitions of any officer shares of capital stock or shares of capital stock issued upon the exercise or vesting of Company Stock Awards outstanding as of the date hereof pursuant to the Company’s requirement (under written commitments or the terms of the Company Stock Awards in effect as of the date hereof) to purchase or reacquire such shares of capital stock held by a current or former officer, employee, independent contractor, consultant or (iv) establish, adopt, enter into, amend, terminate, exercise any discretion underdirector of or to the Company only upon termination of such Person’s employment or engagement by the Company), or take any action to accelerate rights under any Company Employee Plansreclassify, combine, split, subdivide or make any contribution to any Company Employee Planotherwise amend the terms of its capital stock;
(fA) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
acquire (g) acquire, whether by merger, consolidation, consolidation or acquisition of stock or assets, assets or otherwise), directly or indirectly, any corporation, partnership or other business or Person organization or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case purchases of obsolete equipment or inventory and other assets being replaced, in each case in the ordinary course of business consistent with past practice, or pursuant to Contracts in each case excluding any transfer, license, saleeffect on the date of this Agreement; (B) sell, lease or otherwise dispose of (whether by merger, consolidation or acquisition of stock or assets or otherwise), or create or incur any Lien on, any of its material assets or properties, other disposition than any Permitted Liens, pursuant to Contracts in connection effect on the date of this Agreement;
(vi) other than in the ordinary course of business consistent with past-practice, enter into, materially amend or terminate any transaction between Material Contract; provided, that any license agreements involving XXX-201 (excluding any Standard Contract) shall not be considered, from the date hereof, Material Contracts entered into in the ordinary course of business consistent with past-practice;
(vii) authorize any material new capital expenditures, other than in the ordinary course of business consistent with past practice and in an aggregate amount not greater than $50,000;
(viii) (A) make any loans, advances or among capital contributions to, or investments in, any other Person (other than a wholly-owned Subsidiary of the Company), (B) incur any Indebtedness or issue any debt securities or (C) assume, guarantee, endorse or otherwise become liable or responsible for the Indebtedness or other obligations of another Person (other than a guaranty by the Company and/or one or more on behalf of its wholly-owned Subsidiaries), in each case of (B) and (C), except for Permitted Indebtedness;
(iix) except to the extent required by applicable Law (including Section 409A of the Code) or required by any arrangement in effect as of the date hereof, and except for increases in base salary, other compensation or benefits of employees (other than executive officers) in the ordinary course of business consistent with past practice-associated with a promotion or material increase in responsibilities, (A) increase the compensation or benefits of any director, officer or employee of the Company or its Subsidiaries, (B) amend, modify or adopt (or make any public announcement of an intention to amend, modify or adopt in the future) any compensation or benefit plan or arrangement including any pension, retirement, profit-sharing, bonus or other employee benefit or welfare benefit plan with or for the benefit or its employees, officers or directors, (C) accelerate the vesting of, or the lapsing of restrictions with respect to, any Company Stock Awards (other than as specifically contemplated under this Agreement) or (D) enter into any new, or amend in any material respect any existing, employment, severance, retention or change in control agreement or plan with or for the benefit of any past or present officers or employees;
(x) implement or adopt any material change in its accounting principles, practices or methods, except as may be required by GAAP, the rules or policies of the Public Accounting Oversight Board or applicable Laws;
(xi) compromise, settle or agree to settle any Action, or consent to the same, other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment by the Company or any of its Subsidiaries of money damages not in excess of $50,000 in the aggregate;
(xii) change any material Tax election, file any amended material Tax Return, enter into any “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign Tax law) with respect to any material Taxes, settle any material Tax claim or assessment relating to the Company or any of its Subsidiaries, affirmatively surrender any right to claim a refund of Taxes, enter into any Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or similar Contract, in each case other than customary Tax indemnities or similar obligations contained in credit or other commercial Contracts the primary purpose of which do not relate to Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or material Tax assessment relating to the Company or any of its Subsidiaries (other than in connection with extensions of time to file Tax Returns obtained in the ordinary course of business);
(xiii) adopt or effect enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization restructuring or other reorganizationrecapitalization;
(jxiv) incur change its fiscal year;
(xv) enter into any indebtedness for borrowed money non-compete, exclusivity, non-solicitation or guarantee any such indebtedness of another Personsimilar agreement that would restrict or limit, issue or sell any debt securities or optionsin a material respect, warrants, calls or other rights to acquire any debt securities the operations 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(mxvi) enter into any material agreement, agreement in principle, letter new line of intent, memorandum business outside of understanding or similar Contract with respect to any joint venture, strategic partnership or allianceits existing business;
(nxvii) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle new lease or amend the terms of any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver existing lease of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permitreal property, other than Contracts entered into with customers an annual renewal of an existing lease in the ordinary course of business consistent with past practice (it being understood thatwhich does not result, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, individually or in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts an increase in annual expenditures of similar size and scope previously entered into by the Company by an amount greater than $100,000;
(xviii) convene any regular or special meeting (or any adjournment or postponement thereof) of the stockholders of the Company other than, to the extent required by an order of a court of competent jurisdiction, an annual meeting of stockholders for purposes of election of directors, ratification of the Company’s auditors and other routine matters; provided, that the Company shall use its commercially reasonable efforts to oppose any stockholder proposal presented at any such meeting (provided, for the avoidance of doubt, that nothing in this Section 6.1(b)(xviii)) shall require the directors of the Company to take any action or refrain from taking any action that would reasonably be expected to result in a breach of their fiduciary duties under applicable Law);
(xix) except in connection with actions permitted by Section 6.4, take any action to exempt any Person from, or make any acquisition of securities of the Company by any Person not subject to, any state takeover statute or similar statute or regulation that applies to Company with respect to an Acquisition Proposal or otherwise, including the restrictions on “business combinations” set forth in Section 203 of the DGCL, except for Parent, Merger Sub or any of its their respective Subsidiaries in or Affiliates, or the ordinary course of business)transactions contemplated by this Agreement; or
(sxx) agree or commit to do take any of the foregoing. Nothing contained actions described in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsSection 6.1(b)(i) through Section 6.1(b)(xix).
Appears in 1 contract
Conduct of Business of the Company. The Company shall(a) Unless Purchaser shall otherwise consent in writing (such consent not to be unreasonably withheld, and shall cause each of its Subsidiaries toconditioned or delayed), during the period from the date of this Agreement until the Effective TimeInterim Period, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewithset forth on Schedule 5.2, the Company shall, and shall cause each of its Subsidiaries to, use its (i) conduct their respective businesses, in all material respects, in the ordinary course of business consistent with past practice, (ii) comply with all Laws applicable to the Target Companies and their respective businesses, assets and employees, and (iii) take all commercially reasonable efforts measures necessary or appropriate to preserve substantially intact its and its Subsidiaries’ intact, in all material respects, their respective business organizationorganizations, to keep available the services of its their respective managers, directors, officers, employees and its Subsidiaries’ current officers consultants, and employees, to preserve its the possession, control and its Subsidiaries’ present relationships condition of their respective material assets, all as consistent with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. past practice.
(b) Without limiting the generality of the foregoing, between the date of this Agreement Section 5.2(a) and the Effective Time, except as otherwise expressly contemplated by the terms of this Agreement or as set forth in Section 6.01 of on Schedule 5.2, during the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries toInterim Period, without the prior written consent of Parent Purchaser (which such consent shall not to be unreasonably withheld withheld, conditioned or delayed):), the Company shall not, and shall cause its Subsidiaries to not:
(ai) amend amend, waive or propose otherwise change, in any respect, its Organizational Documents; except as required for internal, organizational purposes in identity, form or place of organization to amend its certificate effectuate the provisions of incorporation or by-laws (or other comparable organizational documents)this Agreement;
(bii) splitauthorize for issuance, combine or reclassifyissue, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company);
(d) issuegrant, sell, pledge, dispose of or encumber propose to issue, grant, sell, pledge or dispose of any of its equity securities or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any of its equity securities, or other securities, including any securities convertible into or exchangeable for any of its shares or other equity securities or securities of any class and any other equity-based awards, or engage in any hedging transaction with a third Person with respect to such securities;
(iii) split, combine, recapitalize or reclassify any of its shares or other equity interests or issue any other securities in respect thereof or pay or set aside any dividend or other distribution (whether in cash, equity or property or any combination thereof) in respect of its equity interests, or directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any of its securities;
(iv) incur, create, assume, prepay or otherwise become liable for any Indebtedness (directly, contingently or otherwise), make a loan or advance to or investment in any third party (other than advancement of expenses to employees in the ordinary course of business), or guarantee or endorse any Indebtedness, Liability or obligation of any Person;
(v) increase the wages, salaries or compensation of its employees other than in the ordinary course of business, consistent with past practice, and in any event not in the aggregate by more than five percent (5%), or make or commit to make any bonus payment (whether in cash, property or securities) to any employee, or materially increase other benefits of employees generally, or enter into, establish, materially amend or terminate any Company Securities Benefit Plan with, for or Company Subsidiary Securitiesin respect of any current consultant, officer, manager director or employee, in each case other than (i) as required by applicable Law, pursuant to the issuance of shares of Company Common Stock upon the exercise terms of any Company Stock Option outstanding under Company Stock Benefit Plans as or in the ordinary course of the date of this Agreement in accordance business consistent with its terms, or (ii) in accordance with the Stockholder Rights Agreementpast practice;
(evi) make or rescind any material election relating to Taxes, settle any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, file any amended Tax Return or claim for refund, or make any material change in its accounting or Tax policies or procedures, in each case except as required by applicable Law or pursuant in compliance with GAAP;
(vii) transfer or license to Section 3.03any Person or otherwise extend, materially amend or modify, permit to lapse or fail to preserve any material Company Registered IP, Company Licensed IP or other Company IP (iexcluding non-exclusive licenses of Company IP to Target Company customers in the ordinary course of business consistent with past practice), or disclose to any Person who has not entered into a confidentiality agreement any Trade Secrets; TABLE OF CONTENTS
(viii) increase the compensation of directorsterminate, officers or employees waive or assign any material right under, any Company Material Contract or enter into any Contract that would be a Target Company Material Contract outside of the Company ordinary course of business consistent with past practice;
(ix) fail to maintain its books, accounts and records in all material respects in the ordinary course of business consistent with past practice;
(x) except in the ordinary course of business, establish any Subsidiary or any of its Subsidiaries, (ii) enter into any new line of business outside of the business currently conducted by the Company or amend its Subsidiaries;
(xi) fail to use commercially reasonable efforts to keep in any material respectforce insurance policies or replacement or revised policies providing insurance coverage with respect to its assets, any existing employment, severance, retention or change operations and activities in control agreement with such amount and scope of coverage as are currently in effect;
(xii) revalue any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, material assets or make any contribution change in accounting methods, principles or practices, except to any Company Employee Planthe extent required to comply with GAAP and after consulting with the Company’s outside auditors;
(fxiii) hire waive, release, assign, settle or compromise any officer claim, action or employeeproceeding (including any suit, except for action, claim, proceeding or investigation relating to this Agreement or the replacement transactions contemplated hereby), other than waivers, releases, assignments, settlements or compromises that involve only the payment of any current employee whose employment with monetary damages (and not the imposition of equitable relief on, or the admission of wrongdoing by, the Company or its Affiliates) not in excess of $50,000 (individually or in the aggregate), or otherwise pay, discharge or satisfy any Subsidiary thereof is terminated Actions, Liabilities or who resigns for any reasonobligations, provided that unless such replacement employee’s annual base salary does not exceed $60,000amount has been reserved in the Company Financials;
(gxiv) close or materially reduce its activities, or effect any layoff or other personnel reduction or change, at any of its facilities;
(xv) acquire, including by merger, consolidation, acquisition of stock or assets, or otherwiseany other form of business combination, any corporation, partnership, limited liability company, other business organization or Person any division thereof, or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any material amount of its wholly-owned Subsidiaries, (x) trade payables arising in assets outside the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessconsistent with past practice;
(hxvi) transfermake capital expenditures in excess of $50,000 (individually for any project (or set of related projects) or $150,000 in the aggregate);
(xvii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(xviii) voluntarily incur any Liability or obligation (whether absolute, accrued, contingent or otherwise) in excess of $100,000 individually or $300,000 in the aggregate other than pursuant to the terms of a Target Company Material Contract or Company Benefit Plan;
(xix) sell, lease, license, selltransfer, lease exchange or swap, mortgage or otherwise pledge or encumber (including securitizations), or otherwise dispose of any material portion of its properties, assets or rights;
(whether by way xx) enter into any agreement, understanding or arrangement with respect to the voting of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary securities of the Company, ;
(xxi) take any action that would reasonably be expected to significantly delay or impair the obtaining of any Consents of any Governmental Authority to be obtained in connection with this Agreement;
(xxii) accelerate the collection of any trade receivables or delay the payment of trade payables or any other liability other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(ixxiii) adopt enter into, amend, waive or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or terminate (other reorganization;
(jthan terminations in accordance with their terms) incur any indebtedness for borrowed money or guarantee transaction with 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 Related Person (other than any wholly-owned Subsidiary compensation and benefits and advancement of it) or enter into any arrangement having the economic effect of any of the foregoing, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessmentexpenses, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers provided in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
or TABLE OF CONTENTS (sxxiv) authorize or agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsforegoing actions.
Appears in 1 contract
Samples: Merger Agreement (Integrated Wellness Acquisition Corp)
Conduct of Business of the Company. The Company shallExcept (x) as expressly required or expressly contemplated by this Agreement or as set forth on Schedule 4(d) or (y) as consented to by the Requisite Buyers, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective TimeClosing Date, the Company will conduct its operations only in the ordinary course of business as it exists on the date of this Agreement and consistent with past practices. Without limiting the generality of the foregoing, except as expressly contemplated by this Agreement or as required by applicable Law or with set forth on Schedule 4(d), from the prior written consent date of Parent, conduct its business in this Agreement until the ordinary course of business, and, to the extent consistent therewithClosing Date, the Company shallshall not, and shall cause each of its the Subsidiaries not to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality take any of the foregoingfollowing actions:
(i) directly or indirectly, between withdraw, change, amend, modify or qualify, or resolve, propose or agree to withdraw, change, amend, modify or qualify (whether publicly or otherwise), in a manner adverse to any Buyer, or otherwise take any action, fail to take any action or make any statement or proposal inconsistent with, the Company Board Recommendation; provided, that the Company Board may withdraw, change, amend, modify or qualify the Company Board Recommendation if it determines in good faith after receiving advice from outside counsel on the matter that, as the result of a material development or change in circumstances that occurs or arises after the date of this Agreement and that was not known or reasonably foreseeable to the Effective Time, except Company as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required date of this Agreement, a failure to take such action would constitute a breach by applicable Law, the Company shall not, nor shall it permit any Board of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents)fiduciary obligations under applicable law;
(bii) split, combine propose or reclassify, repurchase, redeem adopt any changes to the Certificate of Incorporation or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securitiesthe Bylaws;
(ciii) make, declare, set aside aside, or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, on any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company);
(div) issue(A) adjust, sellsplit, combine or reclassify or otherwise amend the terms of any capital stock of the Company, (B) repurchase, redeem, purchase, acquire, encumber, pledge, dispose of or encumber otherwise transfer, directly or indirectly, any shares of capital stock of the Company Securities or any securities or other rights convertible or exchangeable into or exercisable for any such shares of capital stock of the Company Subsidiary Securitiesor such securities or other rights, or offer to do the same, other than (iI) the issuance as permitted under clause (C) of this Section 4(d)(iv) and (II) repurchases of shares of capital stock of the Company Common Stock upon owned or held by employees, consultants, directors or advisors in connection with the termination of their service to the Company at a price no greater than the lesser of fair market value and the purchase price paid for such shares of capital stock of the Company by the holder thereof, (C) issue, grant, deliver or sell any shares of capital stock of the Company or any securities or other rights convertible or exchangeable into or exercisable for any such shares in the Company or such securities or rights (which term, for purposes of this Agreement, will be deemed to include share appreciation rights, “phantom stock” or other commitments that provide any right to receive value or benefits similar to such shares, securities or other rights), other than (I) pursuant to, and in accordance with, the Company’s equity incentive and employee stock purchase plans as in effect on the date of this Agreement, and (II) pursuant to the exercise of any options to purchase Common Stock granted pursuant to, and in accordance with, any such plan, in accordance with the applicable award agreement, (D) enter into any agreement, understanding or arrangement with respect to the sale, voting, pledge, encumbrance, disposition, acquisition, transfer, registration or repurchase of any shares of capital stock of the Company Stock Option outstanding or such securities or other rights, other than any agreement, understanding or arrangement in connection with (I) any repurchases of shares of capital stock of the Company that are permitted under clause (B) above in this Section 4(d)(iv) and (II) the issuance, grant, delivery, sale, disposition or transfer of shares of capital stock and other securities of the Company Stock Plans as that are permitted under clause (C) of this Section 4(d)(iv), or (E) register for sale, resale or other transfer any shares of capital stock of the Company under the Securities Act on behalf of the Company or any other Person, except pursuant to the exercise of registration rights by any Person pursuant to the Fifth XXX; provided, that each of the Buyers that is party to the Fifth XXX hereby covenants and agrees that, from the date of this Agreement until the earlier of the effectiveness of the initial registration statement to be prepared and filed by the Company with the SEC pursuant to the Registration Rights Agreement and the termination of this Agreement pursuant to, and in accordance with its termswith, Section 8 hereof, such Buyer will not exercise or (ii) participate in accordance with any registration rights provided for under the Stockholder Rights AgreementFifth XXX;
(ev) except as required by applicable Law merge or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of consolidate the Company or any of its Subsidiaries, (ii) enter into any new or amend in any material respect, any existing employment, severance, retention or change in control agreement the Subsidiaries with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for or consummate any other Fundamental Transaction (w) intercompany loansas defined below), advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any assets (whether or securities of the Company or any of the Subsidiaries, including by way of merger, consolidation, sale asset sale, other business combination or other Fundamental Transaction (including formation of stock a joint venture) or assetsby property transfer (or initiate, solicit or encourage (including by way of providing information) the submission of any inquiries, proposals or offers or any other efforts or attempts that constitute, or otherwisemay reasonably be expected to lead to, any of the foregoing); provided, that, notwithstanding Section 4(e) hereof (but provided that the Company has complied with clause (i) of Section 4(e)), including the foregoing provisions of this clause (v) shall not be applicable (1) if the Company receives an unsolicited inquiry, proposal or offer from a third party to purchase all of the capital stock or other equity interests in any Subsidiary of the CompanyCompany (by merger, other than in tender offer or otherwise) (each, a “Takeover Transaction”), and (2) if and to the case of obsolete equipment or assets being replacedextent that the Company Board, in each case in good faith and after receiving advice of outside counsel on the ordinary course matter, determines that failure of business consistent with past practicethe Company Board to cause the Company to pursue any such unsolicited inquiry, proposal or offer would reasonably be expected to constitute a breach by the Company Board of its fiduciary obligations under applicable law; provided, further, however, that, notwithstanding the foregoing proviso, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among no event shall the Company and/or one consummate any such Takeover Transaction unless and until (A) the Closing shall have occurred, or more (B) this Agreement will have terminated pursuant to, and in accordance with, Section 8 hereof (and, for the avoidance of its wholly-owned Subsidiariesdoubt, the parties acknowledge and agree that, if the Closing occurs, the provisions of Section 8(b) of the Certificate of Designation shall apply to such Takeover Transaction);
(ivi) adopt or effect a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 reorganization of the Company or any of its the 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;; and
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(svii) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Securities Purchase Agreement (Proteon Therapeutics Inc)
Conduct of Business of the Company. The During the period from the date of this Agreement until the earlier of the termination of this Agreement (in accordance with its terms) or the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or Agreement, as set forth in Section 5.01 of the Company Disclosure Letter, as required by applicable Law Law, or with the prior written consent of ParentParent (which consent shall not be unreasonably withheld, conditioned, or delayed), use commercially reasonable efforts to conduct its business in all material respects in the ordinary course of business, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees licensees, and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or Agreement, as set forth in Section 6.01 5.01 of the Company Disclosure Letter Letter, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld withheld, conditioned, or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents)Charter Documents;
(b) (i) split, combine combine, or reclassifyreclassify any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem redeem, or otherwise acquire, or offer to repurchase, redeem redeem, or otherwise acquire, any Company Securities or Company Subsidiary Securities;
, or (ciii) declare, set aside aside, or pay any dividend or distribution (whether in cash, stock, property property, or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-wholly owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the CompanySubsidiaries);
(dc) issue, sell, pledge, dispose of of, or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(ed) except as required by applicable Law or pursuant to Section 3.03, by any Company Employee Plan or Contract in effect as of the date of this Agreement (i) increase the compensation of directors, officers payable or employees of that could become payable by the Company or any of its Subsidiaries, (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 past or present Subsidiaries to directors, officers officers, or employees, (iii) promote any officers or employeesin each case, except with respect to employees an annual base compensation in excess of $100,000 other than increases in compensation in the ordinary course of business consistent with a base salary of less than $60,000 as the result of the termination or resignation of any officer or employeepast practice, or (ivii) establish, adopt, enter into, materially amend, terminate, exercise any discretion under, or terminate or take any action to accelerate rights under any Company Employee PlansPlans or any plan, agreement, program, policy, trust, fund, or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this 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;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(ge) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances advances, or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into Person in between or among the Company and/or any excess of its wholly-owned Subsidiaries, (x) trade payables arising $1,000,000 in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessaggregate;
(hf) (i) transfer, license, sell, lease lease, or otherwise dispose of any assets (whether by way of merger, consolidation, sale of stock or assets, or otherwise) or pledge, encumber, mortgage, or otherwise subject to any Lien (other than a Permitted Lien), any assets, including the capital stock or other equity interests in any Subsidiary of the Company; provided, other than in that the case foregoing shall not prohibit the Company and its Subsidiaries from transferring, selling, leasing, or disposing of obsolete equipment or assets being replaced, or granting non-exclusive licenses under the Company IP, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(iii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, or other reorganization;
(jg) 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 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-wholly owned Subsidiary of it) or enter into any arrangement having the economic effect of any of the foregoing, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiariespractice;
(kh) institute anyenter into or amend or modify in any material respect, or settle consent to the termination of (other than at its stated expiry date), any Company Material Contract or any Lease with respect to material Real Estate or any other Contract or Lease that, if in effect as of the date hereof would constitute a Company Material Contract or Lease with respect to material Real Estate hereunder;
(i) institute, settle, or compromise any pending or threatened, Legal Actions Action involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than (i) 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 (ii) the settlement of claims, liabilities, or obligations reserved against on the Company Balance Sheet; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofCompany’s business;
(lj) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(mk) (i) settle or compromise any material Tax claim, audit, or assessment for an amount materially in excess of the amount reserved or accrued on the Company Balance Sheet (or most recent consolidated balance sheet included in the Company SEC Documents), (ii) make or change any material Tax election, change any annual Tax accounting period, or adopt or change any method of Tax accounting, (iii) amend any material Tax Returns or file claims for material Tax refunds, or (iv) enter into any material closing agreement, surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or its Subsidiaries;
(l) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding understanding, or similar Contract with respect to any joint venture, strategic partnership partnership, or alliance;
(nm) authorizeexcept in connection with actions permitted by Section 5.03 hereof, take any action to exempt any Person from, or make any commitment with respect acquisition of securities of the Company by any Person not subject to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change state takeover statute or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim similar statute or assessment, surrender any right regulation that applies to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, Company with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company a Takeover Proposal or its Subsidiaries and its or their propertiesotherwise, assets and businesses in a form and amount consistent with past practice;
(q) adoptexcept for Parent, modify from the form existing on the date hereofMerger Sub, or implement a rights planany of their respective Subsidiaries or Affiliates, “poison pill” or similar arrangement, except as the transactions contemplated by this Agreement;
(rn) enter intoabandon, terminateallow to lapse, modify sell, assign, transfer, grant any security interest in otherwise encumber or waive dispose of any material Company IP, or grant any right under, or license to any Material Contract or Permit, Company IP other than Contracts pursuant to non-exclusive licenses entered into with customers in the ordinary course of business consistent with past practice practice;
(it being understood thato) terminate or modify in any material respect, for the purposes of this subsectionor fail to exercise renewal rights with respect to, “any material insurance policy;
(p) except as is materially consistent with past practice” shall not include entering such transactions described in the Company SEC Documents, engage in any transaction with, or enter into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that areagreement, in the aggregatearrangement or understanding with, substantially inconsistent with the terms and conditions found in other Contracts any Affiliate of similar size and scope previously entered into by the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC;
(q) adopt or implement any of its Subsidiaries in the ordinary course of business)shareholder rights plan or similar arrangement; or
(sr) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Conduct of Business of the Company. The (a) Except as expressly contemplated by this Agreement or as set forth in the Company Letter, during the period from the date of this Agreement to the earlier to occur of (i) the date of the termination of this Agreement or (ii) the Effective Time, the Company shall, and shall cause each of its Subsidiaries subsidiaries to, in all material respects conduct its business in the ordinary and usual course consistent with past practice and shall use commercially reasonable efforts to preserve substantially intact the business organization of the Company and its subsidiaries and to keep available the services of its and their current officers and employees and to preserve the current relationships of the Company and its subsidiaries with customers, suppliers and other persons with which the Company or any of its subsidiaries has significant business relationships.
(b) Except as expressly contemplated by this Agreement or as set forth in the Company Letter, the Company shall not, and it shall cause its subsidiaries not to, during the period from the date of this Agreement until to the earlier to occur of (i) the date of the termination of this Agreement or (ii) the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Parent:
(ai) amend other than pursuant to the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their current terms, issue, sell or pledge, or authorize or propose to amend its certificate the issuance, sale or pledge of, any shares of incorporation or by-laws (Company Common Stock or other comparable organizational documents)Company Equity Interests;
(bii) split, combine or reclassify, repurchase, redeem purchase or otherwise acquire, or offer propose to repurchase, redeem purchase or otherwise acquire, any outstanding Shares, except for Restricted Shares pursuant to the terms and conditions of the issuance of such Restricted Shares and except for the withholding of shares of Company Securities Common Stock in connection with taxes payable in respect of the exercise of Company Stock Options or in connection with the “cashless” exercise of Company Subsidiary SecuritiesStock Options);
(ciii) declare, set aside or pay any dividend or other distribution (whether in cash, stock, property stock or otherwiseother property) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company);
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any assets (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in Company Equity Interests, effect any Subsidiary share split, share combination, share reclassification, reverse share split, share dividend, recapitalization or other similar transaction;
(iv) propose or adopt any amendments to its Articles of the Company, Incorporation or bylaws or equivalent organizational documents;
(v) (A) other than pursuant to a written agreement or Company Benefit Plan disclosed in the case Company Letter in the amount required thereunder and other than payment of obsolete equipment bonuses and increases in salaries or assets being replacedwage rates or fringe benefits to non-officer employees, in each case contractors or consultants in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease modify the compensation or other disposition in connection with any transaction between benefits payable or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages become payable by the Company or any of its Subsidiaries of subsidiaries to any amount exceeding $25,000 individually or $100,000 in the aggregateCompany Personnel, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(mB) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
employment (n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts offer letters and letter agreements entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, with employees who are terminable “consistent with past practiceat-will” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by without liability to the Company or any of its Subsidiaries subsidiaries);
(vi) establish, adopt, enter into, amend or terminate any Company Benefit Plan or any collective bargaining, thrift, compensation or other plan, agreement, trust, fund, policy or arrangement for the benefit of any Company Personnel;
(vii) other than sales of assets or inventory in the ordinary course of business); orbusiness substantially consistent with past practice, sell, lease, transfer or assign any property or assets of the Company or any of its subsidiaries that have a value in excess of $250,000 individually or $500,000 in the aggregate;
(sviii) agree other than the financing of ordinary course trade payables or commit other short-term borrowings incurred in the ordinary course of business consistent with past practice and pre-payable without penalty (A) assume, incur or guarantee any Indebtedness, other than endorsements for collection in the ordinary course of business or (B) modify the terms of any existing Indebtedness in any material respect;
(ix) other than Permitted Liens and Liens granted pursuant to do credit facilities existing on the date of this Agreement in connection with borrowings permitted under subparagraph (viii), pledge or permit to become subject to Liens any properties or assets of the Company or any of its subsidiaries;
(x) other than travel loans or other advances in the foregoing. Nothing contained ordinary course of business consistent with past practice, make any loans, advances or capital contributions to, or investments in, any other Person;
(xi) cancel any debts or waive any material claims or rights of substantial value (except for debts, claims or rights as are determined by the Company to be doubtful of collection, consistent with past practice);
(xii) (A) amend, modify or terminate, or waive, release or assign any rights under, any Company Material Contract in this Agreement shall give Parent, directly or indirectly, a manner that is adverse to the right to control or direct the Company’s Company or its Subsidiaries’ operations subsidiaries, or (B) enter into any Contract which, if entered into prior to the Effective Time. Prior date hereof, would have been required to the Effective Time, be disclosed pursuant to Section 4.13; provided that the Company shall exercisemay enter into (1) Contracts described in Section 4.13(a)(i), (ii), (v) and (xii) provided such Contracts are entered into in the ordinary course of business and consistent with past practice, (2) any Contract described in Section 4.13(a)(i), (ii) and (v) that are not entered into in the terms ordinary course of business or consistent with past practice provided any such Contract does not involve amounts in excess of $250,000, (3) distribution, dealer, representative and conditions of this Agreement, complete control sales agency agreements that are terminable by the Company without penalty on not more than 30 days’ notice and supervision over its and its Subsidiaries’ operations.(4) the Contracts described in Schedule 6.01(b)(xii);
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to(a) Except as expressly contemplated by this Agreement, during the period from the date of this Agreement until to the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewith, Stock Sellers shall cause the Company shalland its Subsidiaries to conduct, and the Company shall conduct and shall cause each of its Subsidiaries toto conduct, its operations according to its ordinary and usual course of business consistent with past practice, and the Stock Sellers shall cause the Company and its Subsidiaries to use, and the Company shall use and shall cause each of its commercially reasonable Subsidiaries to use, its best efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, employees and to preserve its the goodwill of and its Subsidiaries’ present maintain satisfactory relationships with customers, suppliers, distributors, licensors, licensees those Persons and other Persons entities having business relationships with itthe Company and its Subsidiaries, and the Stock Sellers and the Company shall promptly advise Parent in writing of any material change in the Company's or any of its Subsidiaries' business, condition (financial or otherwise), properties, customer or supplier relationships, assets, liabilities, prospects or results of operations. Without limiting the generality of the foregoing, between the date of this Agreement foregoing and the Effective Time, except as otherwise expressly provided in or contemplated by this Agreement or as set forth Agreement, during the period specified in Section 6.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries topreceding sentence, without the prior written consent of Parent (which consent Parent, the Company shall not be unreasonably withheld or delayed):and shall not permit any of its Subsidiaries to:
(ai) amend other than as expressly required pursuant to the terms of Company Stock Options outstanding on the date hereof and the Stock Plans as in effect on the date hereof, 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, or grant or accelerate any right to convert or exchange any Company Securities or Subsidiary Securities.
(ii) acquire or redeem, directly or indirectly, or amend its certificate the terms of incorporation any Company Securities or by-laws (or other comparable organizational documents)Subsidiary Securities;
(biii) split, combine or reclassify, repurchase, redeem reclassify its capital stock or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside aside, make or pay any dividend or distribution (whether in cash, stock, property stock or otherwiseproperty) in respect of, or enter into any Contract with respect to the voting of, on any shares of its capital stock (other than cash dividends or distributions from paid to the Company by its direct or indirect wholly-owned Subsidiaries with regard to the Company or other direct or indirect wholly-owned Subsidiaries of the Companytheir capital stock);
(dA) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement except in accordance with its terms, or (ii) in accordance connection with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation purchase of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising Automobile Finance Contracts in the ordinary course of businessbusiness consistent with past practice (other than portfolio purchases of such contracts), make or offer to make any acquisition, by means of a merger or otherwise, of assets or securities, or any sale, lease, encumbrance or other disposition of assets or securities, or (yB) advances enter into any material contract, agreement, commitment, arrangement, lease (including with respect to employees for expenses reimbursable personal property), instrument or understanding or amend any Material Contract, or grant any release or relinquishment of any rights under any Material Contract; provided, that nothing in this Section 5.1 shall prohibit the Company and/or its Subsidiaries’ business expense reimbursement policyfrom entering into any agreement pursuant to which the Company has the right, and but not the obligation, to purchase Automobile Finance Contracts, if such agreement may be terminated by the Company without any material payment or penalty;
(zA) advances except for borrowings under any Credit Facility incurred in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose business consistent with past practice in amounts so that the aggregate amount of any assets (whether by way of merger, consolidation, sale of stock or assets, or otherwiseprincipal outstanding thereunder does not exceed the maximum principal amount set forth with respect to such Credit Facility on Schedule 2.2(c), including the capital stock incur or other equity interests in assume any Subsidiary of the Company, other than long-term debt or short-term debt except for short-term accounts payable and accrued liabilities (as such term is used in the case of obsolete equipment or assets being replaced, in each case Financial Statements) incurred in the ordinary course of business consistent with past practice, in each case excluding or (B) enter into any transferfinancing arrangements or modify the terms of any existing indebtedness or financing arrangements (including the Credit Facilities); provided, license, sale, lease or other disposition in connection with any transaction between or among that the Company and/or one may enter into an amendment of the Specified Credit Facility (as defined on Schedule 2.2(c)) in order to increase the maximum principal amount that may be outstanding thereunder (I) by up to $20 million at any time on or after August 10, 1998, and prior to September 10, 1998, and (II) by up to $30 million (in addition to any increase made pursuant to the preceding clause (I)) at any time on or after September 10, 1998, and prior to the Closing; provided, further, that the Company shall not enter into either such amendment unless not more of its wholly-owned Subsidiariesthan seven business days nor less than five business days prior thereto, the Company shall have offered Parent (a "Parent Offer") the right to provide the financing contemplated by such amendment on substantially similar terms as set forth in such amendment (including, without limitation, fees payable to the lenders thereunder), and Parent shall have refused to provide such financing; and provided, further, that the terms set forth in any such amendment shall be no more favorable to the lenders thereunder, in any material respect, than those offered to Parent pursuant to the relevant Parent Offer;
(ivi) adopt assume, guarantee, endorse or effect a plan of complete otherwise become liable or partial liquidationresponsible (whether directly, dissolution, restructuring, recapitalization contingently or other reorganization;
(jotherwise) 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 obligations of any other Person (other than any except wholly-owned Subsidiary of it) or enter into any arrangement having the economic effect of any Subsidiaries of the foregoing, or incur any Liens other than Permitted Liens Company;
(vii) except in connection with the foregoing, other than the financing purchase of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Automobile Finance Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood thatother than portfolio purchases of such contracts), for make any loans, advances or capital contributions to, or investments in, any other Person (other than wholly- owned Subsidiaries of the purposes Company);
(viii) materially change any of this subsectionthe accounting principles or practices used by it;
(ix) make any tax election or settle or compromise any material federal, “consistent with past practice” shall not include entering into state or local income tax liability;
(x) propose or adopt any Contract having terms and conditions amendments to its Articles of Incorporation or By-Laws (including terms and conditions regarding pricing and Liabilitiesor similar governing documents);
(xi) that aregrant any stock-related, in the aggregateperformance or similar awards or bonuses;
(xii) forgive any loans to employees, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company officers or directors or any of its Subsidiaries their respective affiliates or associates;
(xiii) except for the Employment Agreements, enter into any new, or amend any existing, employment, severance, consulting or salary continuation agreements with any officers, directors or employees, or grant any increases in the compensation or benefits payable to officers, directors or employees, except for regularly-scheduled increases to employees in the ordinary course of business)business consistent with past practice;
(xiv) enter into any collective bargaining or other labor agreement;
(xv) adopt, amend or terminate any Plan or other employee benefit plan or arrangement;
(xvi) 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 pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise) other than the payment, discharge or satisfaction of liabilities (A) reflected or reserved against in full in the Financial Statements as at March 31, 1998, or incurred in the ordinary course of business subsequent to March 31, 1998, or (B) in an aggregate amount not to exceed $50,000;
(xvii) consummate, or enter into any agreement with respect to, any Securitization; or
(sxviii) agree or commit to do take any of the foregoing. Nothing contained foregoing actions or any action which would make any representation or warranty in this Agreement untrue or incorrect as of the date when made or as of a future date or which would result in any of the conditions set forth in Section 6.3 hereof not being satisfied.
(b) No Seller shall give Parent, directly take any action which would make any representation or indirectly, warranty in this Agreement untrue or incorrect as of the right date when made or which would result in any of the conditions set forth in Section 6.3 hereof not being satisfied.
(c) Neither the Company nor any of its Subsidiaries shall make a general distribution of any communication to control or direct the Company’s or its Subsidiaries’ operations prior their respective employees relating to the Effective Time. Prior to transactions contemplated hereby, without the Effective Time, the Company prior consent of Parent which consent shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsnot be unreasonably withheld.
Appears in 1 contract
Conduct of Business of the Company. The During the period from the date of this Agreement until the earlier of the termination of this Agreement (in accordance with its terms) or the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or Agreement, as set forth in Section 5.01 of the Company Disclosure Letter, as required by applicable Law Law, or with the prior written consent of ParentParent (which consent shall not be unreasonably withheld, conditioned, or delayed), use commercially reasonable efforts to conduct its business in all material respects in the ordinary course of business, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees licensees, and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or Agreement, as set forth in Section 6.01 5.01 of the Company Disclosure Letter Letter, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld withheld, conditioned, or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents)Charter Documents;
(b) (i) split, combine combine, or reclassifyreclassify any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem redeem, or otherwise acquire, or offer to repurchase, redeem redeem, or otherwise acquire, any Company Securities or Company Subsidiary Securities;
, or (ciii) declare, set aside aside, or pay any dividend or distribution (whether in cash, stock, property property, or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-wholly owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the CompanySubsidiaries);
(dc) issue, sell, pledge, dispose of of, or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(ed) except as required by applicable Law or pursuant to Section 3.03, by any Company Employee Plan or Contract in effect as of the date of this Agreement (i) increase the compensation of directors, officers payable or employees of that could become payable by the Company or any of its Subsidiaries, (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 past or present Subsidiaries to directors, officers officers, or employees, (iii) promote any officers or employeesin each case, except with respect to employees an annual base compensation in excess of $100,000 other than increases in compensation in the ordinary course of business consistent with a base salary of less than $60,000 as the result of the termination or resignation of any officer or employeepast practice, or (ivii) establish, adopt, enter into, materially amend, terminate, exercise any discretion under, or terminate or take any action to accelerate rights under any Company Employee PlansPlans or any plan, agreement, program, policy, trust, fund, or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this 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;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(ge) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances advances, or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into Person in between or among the Company and/or any excess of its wholly-owned Subsidiaries, (x) trade payables arising $1,000,000 in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessaggregate;
(hi) transfer, license, sell, lease lease, or otherwise dispose of any assets (whether by way of merger, consolidation, sale of stock or assets, or otherwise) or pledge, encumber, mortgage, or otherwise subject to any Lien (other than a Permitted Lien), any assets, including the capital stock or other equity interests in any Subsidiary of the Company; provided, other than in that the case foregoing shall not prohibit the Company and its Subsidiaries from transferring, selling, leasing, or disposing of obsolete equipment or assets being replaced, or granting non-exclusive licenses under the Company IP, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(iii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, or other reorganization;
(jg) 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 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-wholly owned Subsidiary of it) or enter into any arrangement having the economic effect of any of the foregoing, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiariespractice;
(kh) institute anyenter into or amend or modify in any material respect, or settle consent to the termination of (other than at its stated expiry date), any Company Material Contract or any Lease with respect to material Real Estate or any other Contract or Lease that, if in effect as of the date hereof would constitute a Company Material Contract or Lease with respect to material Real Estate hereunder;
(i) institute, settle, or compromise any pending or threatened, Legal Actions Action involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than (i) 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 (ii) the settlement of claims, liabilities, or obligations reserved against on the Company Balance Sheet; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofCompany’s business;
(lj) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(mk) (i) settle or compromise any material Tax claim, audit, or assessment for an amount materially in excess of the amount reserved or accrued on the Company Balance Sheet (or most recent consolidated balance sheet included in the Company SEC Documents), (ii) make or change any material Tax election, change any annual Tax accounting period, or adopt or change any method of Tax accounting, (iii) amend any material Tax Returns or file claims for material Tax refunds, or (iv) enter into any material closing agreement, surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or its Subsidiaries;
(l) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding understanding, or similar Contract with respect to any joint venture, strategic partnership partnership, or alliance;
(nm) authorizeexcept in connection with actions permitted by Section 5.03 hereof, take any action to exempt any Person from, or make any commitment with respect acquisition of securities of the Company by any Person not subject to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change state takeover statute or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim similar statute or assessment, surrender any right regulation that applies to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, Company with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company a Takeover Proposal or its Subsidiaries and its or their propertiesotherwise, assets and businesses in a form and amount consistent with past practice;
(q) adoptexcept for Parent, modify from the form existing on the date hereofMerger Sub, or implement a rights planany of their respective Subsidiaries or Affiliates, “poison pill” or similar arrangement, except as the transactions contemplated by this Agreement;
(rn) enter intoabandon, terminateallow to lapse, modify sell, assign, transfer, grant any security interest in otherwise encumber or waive dispose of any material Company IP, or grant any right under, or license to any Material Contract or Permit, Company IP other than Contracts pursuant to non-exclusive licenses entered into with customers in the ordinary course of business consistent with past practice practice;
(it being understood thato) terminate or modify in any material respect, for the purposes of this subsectionor fail to exercise renewal rights with respect to, “any material insurance policy;
(p) except as is materially consistent with past practice” shall not include entering such transactions described in the Company SEC Documents, engage in any transaction with, or enter into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that areagreement, in the aggregatearrangement or understanding with, substantially inconsistent with the terms and conditions found in other Contracts any Affiliate of similar size and scope previously entered into by the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC;
(q) adopt or implement any of its Subsidiaries in the ordinary course of business)shareholder rights plan or similar arrangement; or
(sr) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date ---------------------------------- of this Agreement and continuing until the Effective Time, except as expressly contemplated by earlier of the termination of this Agreement or as required by applicable Law or with the prior written Closing Date, the Company (including Company Sub) agrees (except to the extent that Parent shall otherwise consent in writing) to carry on the business of Parent, conduct its business the Company in the usual, regular and ordinary course of businessin substantially the same manner as heretofore conducted, that the Company will pay its debts and Taxes when due, to pay or perform other obligations when due, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries towith business, use its commercially reasonable their best efforts consistent with past practice and policies to preserve substantially intact its and its Subsidiaries’ their present business organization, to keep available the services of its and its Subsidiaries’ current present officers and employees, to key employees and preserve its and its Subsidiaries’ present their relationships with customers, suppliers, distributors, licensors, licensees licensees, and other Persons others having business relationships dealings with itthem, all with the goal of preserving unimpaired the goodwill and ongoing businesses of the Company at and following the Closing Date. The Company will promptly notify Parent of any event or occurrence or emergency not in the ordinary course of the business of the Company, and any material event involving the Company. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or and as set forth in Section 6.01 of on Schedule 4.1, the Shareholders and the Company Disclosure Letter or as required by applicable Lawwill take all action necessary to ensure that, the Company shall (including Company Sub) will not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Parent:
(a) amend Enter into any commitment or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents)transaction;
(b) Transfer to any person or entity any Company Intellectual Property Rights (other than pursuant to end user licenses in the ordinary course of business);
(c) Enter into or amend 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;
(d) Amend or otherwise modify (or agree to do so), except in the ordinary course of business, or violate the terms of, any of the agreements set forth or described in the Shareholder Disclosure Schedules;
(e) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, Shares or property) in respect of any of its capital Shares, or split, combine or reclassifyreclassify any of its 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 Shares of the Company, or repurchase, redeem or otherwise acquire, directly or offer to repurchase, redeem or otherwise acquireindirectly, any Company Securities shares of its capital Shares (or Company Subsidiary Securitiesoptions, warrants or other rights exercisable therefor);
(cf) declareIssue, set aside grant, deliver or pay any dividend sell or distribution (whether in cashauthorize or propose the issuance, stockgrant, property delivery or otherwise) in respect sale of, or enter into any Contract with respect to purchase or propose the voting purchase of, any shares of its capital stock (other than dividends Shares or distributions from its direct securities convertible into, or indirect wholly-owned Subsidiaries subscriptions, rights, warrants or options to the Company acquire, or other direct agreements or indirect wholly-owned Subsidiaries of the Company);
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise commitments of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, character obligating it to issue any shares or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000other convertible securities;
(g) acquire, Cause or permit any amendments to the Organizational Documents;
(h) Acquire or agree to acquire by merger, consolidation, acquisition of stock merging or assetsconsolidating with, or otherwiseby purchasing any assets or equity securities of, or by any other manner, any business or Person any corporation, partnership, association or other business organization or division thereof thereof, or make otherwise acquire or agree to acquire any loansassets which are material, advances individually or capital contributions in the aggregate, to the business of the Company;
(i) Sell, lease, license or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or otherwise dispose of any of its wholly-owned Subsidiariesproperties or assets, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances except in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) incur Incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, or issue or sell any of its 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiariesothers;
(k) institute any, Grant any severance or settle termination pay (i) to any director or compromise officer or (ii) to any pending other employee or threatened, Legal Actions involving injunctive relief consultant or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree except payments made pursuant to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact written agreements outstanding on the business date hereof or requirements of the Company or any Affiliate thereofapplicable law;
(l) make any material change in any method of financial accounting principles or practices, except for any change Except as required by a change in GAAP applicable law, adopt or applicable Lawamend 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 employees;
(m) enter into Revalue any material agreementof its assets, agreement including writing down the value of inventory or writing off notes or accounts receivable other than in principle, letter the ordinary course of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliancebusiness;
(n) authorize, Make or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material election in respect of Taxes, adopt or change any accounting method in respect of Tax accounting, file any material amended Tax ReturnTaxes or otherwise, enter into any material closing agreement, settle any material claim or assessmentassessment in respect of Taxes, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations limitation period applicable to any material claim or assessment, assessment in each case, with respect to of Taxes;
(o) Enter into any strategic alliance or joint marketing arrangement or agreement;
(p) fail Incur any indebtedness other than in the ordinary course of its business as it has been run prior to maintain the date hereof, but in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses no event for an amount in a form and amount consistent with past practice;excess of $10,000; or
(q) adopt, modify from Pass any resolution by its directors in general meeting other than any resolution or resolutions which may be necessary so as to implement in full the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by terms and provisions of this Agreementagreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or Knowingly permit any of its Subsidiaries in the ordinary course insurance to lapse or knowingly do anything to make any policy of business); orinsurance void or voidable;
(s) Enter into indemnities, guarantees or suretyships except those implied by law or given in relation to the products manufactured by it;
(t) Take, or agree in writing or commit otherwise to do take, any of the foregoing. Nothing contained actions described in this Agreement shall give ParentSections 4.1(a) through (s) above, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, any other action that would prevent the Company shall exercise, consistent with from performing or cause the terms and conditions of this Agreement, complete control and supervision over Company not to perform its and its Subsidiaries’ operationscovenants hereunder.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except Except as expressly contemplated by this Agreement or as may be required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent may be consented in writing by Buyer (which consent shall not be unreasonably withheld or delayed):
), and may be expressed by this Agreement (a) amend or propose to amend its certificate including, for the avoidance of incorporation or by-laws (or other comparable organizational documents);
(b) splitdoubt, combine or reclassifyany action set forth in Section 6.10, repurchase, redeem or otherwise acquireSection 6.1 of the Company Disclosure Schedules, or offer to repurchaseExhibit C), redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to from and after the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to date hereof until the Company or other direct or indirect wholly-owned Subsidiaries earlier of the Company);
(d) issue, sell, pledge, dispose of Closing Date or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date termination of this Agreement in accordance with its terms, the Company shall, and shall cause each other Group Company to, and Lux Seller shall cause each of the Group Companies to, (a) conduct its business in all material respects in the ordinary course consistent with past practice and (b) use commercially reasonable efforts to (i) preserve substantially intact its business organization and to preserve the present commercial relationships of the Group Companies with significant customers, suppliers and other third parties with whom the Group Companies have significant business relations and (ii) retain the services of the Group Companies’ key employees. Without limiting the generality of the foregoing, except as may be required by Law or any Governmental Entity, may be consented in writing by Buyer (which consent shall not be unreasonably withheld or delayed), or expressed by this Agreement (including, for the avoidance of doubt, any action set forth in Section 6.10, Section 6.1 of the Company Disclosure Schedules or Exhibit C), from the date hereof until the earlier of the Closing Date and the Termination Date, the Company shall not and shall cause each other Group Company not to, and Lux Seller shall cause the Group Companies not to, do any of the following:
(a) issue, sell or pledge, dispose of, encumber, deliver or authorize or propose the issuance, sale or pledge, disposition, encumbrance or delivery of (i) any shares of capital stock or voting securities of any class of any of the Group Companies (including the Shares and the USco Shares), or securities convertible into or exchangeable for any such shares, or any rights, warrants or options to acquire any such shares or other convertible securities of any of the Group Companies or (ii) any other securities in accordance respect of, in lieu of, or in substitution for shares of capital stock of any of the Group Companies (including the Shares and the USco Shares) outstanding on the date hereof;
(b) (i) make any payments in cash or in kind, or advance or loan any funds to Sellers or any of their Affiliates, otherwise 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 or equity interests, except for dividends or other distributions by any Subsidiary of the Stockholder Rights AgreementCompany to the Company or any other Subsidiary of the Company, or (ii) adjust, split, combine, or reclassify any of its capital stock or other voting securities or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other securities;
(c) redeem, purchase or otherwise acquire any outstanding shares of the capital stock of the Company or any of the Group Companies which are not wholly-owned, directly or indirectly, by the Company;
(d) (i) sell, lease, license, transfer or otherwise dispose of (by merger, consolidation or sale of stock or assets or otherwise) any material corporation, partnership or other business organization or division or any of its material property or material assets or (ii) create any Lien (other than a Permitted Lien) on any material property or assets, other than sales, leases, licenses, transfers and dispositions in the ordinary course of business, as may be required by applicable Law or any Governmental Authority in order to permit or facilitate the consummation of the transactions contemplated hereby;
(e) adopt any amendment to the Governing Documents of any of the Material Group Companies;
(f) incur any Indebtedness not repayable in connection with the Closing (other than letters of credit to secure supplies of goods in the ordinary course consistent with past practice and letters of credit in Europe in an individual amount not in excess of €100,000 for security on leases and property related transactions, in each case entered into in the ordinary course of business);
(g) except as to the extent required by applicable Law or pursuant to Section 3.03by Company Material Contracts or the terms of the Company Benefits Plans (each as in existence as of the date hereof), (i) increase the compensation of or benefits payable or to become payable to the directors, officers officers, consultants or employees of any Group Company, other than for increases in annual base salary in the Company or any ordinary course of its Subsidiariesbusiness consistent with past practice (including, for this purpose, the normal salary review process conducted each year), (ii) enter into any new or amend in any material respectbecome a party to, any existing employment, severance, retention or change in control agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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, into or take any action to accelerate rights under amend any Company Benefit Plan, any arrangement that would be a Company Benefit Plan if it were in effect on the date hereof or any collective bargaining, (iii) accelerate the vesting or payment or cause to be funded or otherwise secure the payment of any compensation and/or benefits, (iv) grant any cash or equity based bonus or incentive awards, (v) hire any officers or managers at any Group Company except to the extent such hires are reasonably necessary to replace officers or managers in key positions who are no longer employed after the date hereof, (vi) terminate the employment of any officers of any Group Company or any Management Employee Plans, or make (vii) materially change any contribution actuarial or other assumptions used to calculate funding obligations with respect to any Company Employee PlanBenefit Plan or materially change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by the Accounting Principles;
(fh) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions contributions, other than loans or advances in the ordinary course of business consistent with past practice (including advances for travel and other normal business expenses to directors, officers and employees, but excluding loans or investments other advances to officers and directors);
(i) directly or indirectly engage in any PersonAffiliate Transaction (other than (i) between Group Companies or (ii) with respect to employment relationships and compensation, except for (w) intercompany loansbenefits, travel advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising and employee loans in the ordinary course of business);
(j) merge or consolidate with or into any other Person, dissolve or liquidate or acquire any businesses or assets (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances other than acquisitions of inventory in the ordinary course of businessconsistent with past practice);
(hk) transfermake any change in any method of accounting other than those required by changes in Accounting Principles as contemplated by this Agreement;
(l) enter into a written contract that would be a Company Material Contract if entered into prior to the date hereof; provided that such restriction shall not apply with respect to contracts of the type described in Sections 3.6(a)(ii), license(xi) and (xii) entered into with respect to business of the Company conducted outside of the United States in the ordinary course consistent with past practice, sellprovided, lease that the Company shall consult with Buyer reasonably in advance of entering into any such contract.
(i) with respect to the business of the Company conducted in the United States, authorize or otherwise dispose make any capital expenditures (A) relating to information technology, in excess of $100,000, (B) relating to store maintenance, development or expansion in excess of $500,000, or (C) relating to all other matters, in excess of $250,000 and (ii) with respect to the business of the Company conducted outside of the United States, authorize or make any capital expenditures in excess of the amounts set forth in the Company’s fiscal 2011 capital expenditure budget as provided to Buyer;
(n) enter into any settlement or release with respect to any claim relating to the business of any 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 Group Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transferbut not, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method individual case, in excess of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget€250,000;
(o) (i) make, change or revoke any material Tax election, (ii) change any material method of reporting income or deductions for Tax accountingpurposes, (iii) settle or compromise any material Tax claim, audit or dispute, (iv) file any material amended Tax Return, (v) extend or waive the period of limitations for the payment or assessment of any material Tax of any Group Company, (vi) obtain any material ruling with respect to Taxes or enter into any material closing agreementagreement with any taxing authority, settle any material claim or assessment, (vii) make or surrender any right to claim for a material refund, offset or other reduction in Liability or consent to any extension or waiver refund of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;; or
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereofauthorize any, or implement a rights plancommit or agree to take any, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(s) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsforegoing actions.
Appears in 1 contract
Conduct of Business of the Company. (a) The Company shall, covenants and shall cause each of its Subsidiaries toagrees that, during the period from the date of this Agreement hereof until the Effective Time, except (i) as expressly contemplated required by this Agreement or Agreement, (ii) as disclosed in Section 5.1(a) of the Company Disclosure Letter, (iii) as required by applicable Law (including any Public Health Measures) or with as otherwise taken in good faith by the prior written Company or any of its Subsidiaries in response to COVID-19 or (iv) unless Parent shall otherwise consent of Parentin writing (which consent shall not be unreasonably withheld, conduct its business in the ordinary course of business, and, to the extent consistent therewithconditioned or delayed), the Company shall, and shall cause each of its Subsidiaries to, (w) conduct their respective business in the ordinary course of business in all material respects and (x) use its commercially reasonable best efforts to preserve substantially intact its their respective business organizations and its Subsidiaries’ business organizationmaterial assets, to keep available the services of its and its Subsidiaries’ current officers and key employees, to preserve its and its Subsidiaries’ their respective present relationships with customers, suppliers, distributors, licensors, licensees Material Customers and other Persons having business relationships Material Suppliers and comply in all material respects with it. all applicable Laws.
(b) Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except (w) as otherwise expressly contemplated required by this Agreement or Agreement, (x) as set forth disclosed in Section 6.01 5.1(b) of the Company Disclosure Letter or Letter, (y) as required by applicable Law, the Company Law (including any Public Health Measures) or (z) unless Parent shall not, nor shall it permit any of its Subsidiaries to, without the prior written otherwise consent of Parent in writing (which consent shall not be unreasonably withheld withheld, conditioned or delayed):), the Company shall not, and the Company shall cause each of its Subsidiaries not to:
(ai) amend or propose to amend otherwise change its certificate of incorporation or bybylaws or any similar governing instruments (other than amendments to the governing documents of any wholly-laws (owned Subsidiary of the Company that would not prevent, materially delay or materially impair the Merger or the other comparable organizational documentstransactions contemplated by this Agreement);
(bii) split, combine or reclassify, repurchase, redeem amend or otherwise acquirechange or grant any waiver under the SPAC Warrant Agreement, the Series B Warrant Agreement, the Pre-Funded Warrant Agreement or offer any other Contracts to repurchase, redeem which the Company or otherwise acquire, any of its Subsidiaries is a party with respect to the Company Securities or Company Subsidiary SecuritiesWarrants;
(ciii) issue, deliver, sell, pledge, dispose of or encumber any shares of the Company’s or any of its Subsidiaries’ capital stock 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 of its Subsidiaries or any other securities in respect of, in lieu of, or in substitution for the Company’s or any of its Subsidiaries’ capital stock, or grant to any Person any right to acquire any shares of the Company’s or any of its Subsidiaries’ capital stock, except (A) pursuant to the exercise of Company Stock Options or Company Warrants or settlement of other awards outstanding as of the date hereof (or permitted hereunder to be granted after the date hereof) and in accordance with the terms of such instruments as in effect as of the date hereof, (B) the issuances in accordance with the terms of the Equity Commitment Agreements and the Preferred Stock Exchange Agreement in effect as of the date hereof of Anti-Dilution Warrants to purchase no more than 813,288 Shares and (C) transactions solely between the Company and a wholly-owned Subsidiary of the Company or solely between wholly owned Subsidiaries of the Company;
(iv) declare, set aside aside, make or pay any dividend or distribution (whether other distribution, payable in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, Company’s or any shares of its Subsidiaries’ capital stock (other than dividends except for any dividend or distributions from its direct or indirect distribution by a wholly-owned Subsidiaries Subsidiary of the Company to the Company or to other direct or indirect wholly-owned Subsidiaries of the Company);
(dv) issueadjust, sellsplit, pledgecombine, dispose of redeem, repurchase or encumber otherwise acquire any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees capital stock of the Company or any of its Subsidiaries, non wholly-owned Subsidiaries (ii) enter into any new except for cashless exercises or amend in any material respect, any existing employment, severance, retention similar transactions pursuant to the exercise of Company Stock Options or change in control agreement with any Company Warrants or settlement of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 Company RSUs and Company PSUs outstanding as the result of the termination or resignation date hereof and, in each case, in accordance with the terms of any officer or employeesuch instruments as in effect as of the date hereof (as applicable)), or (iv) establishreclassify, adoptcombine, enter intosplit, amend, terminate, exercise any discretion under, subdivide or take any action to accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Planotherwise amend the terms of their respective capital stock;
(fvi) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(gA) acquire, acquire (whether by merger, consolidation, consolidation or acquisition of stock or assets, assets or otherwise) any corporation, any partnership or other business or Person organization or division thereof or make any loansassets, advances in each case, having a value in excess of $10,000,000 individually or capital contributions $25,000,000 in the aggregate, other than purchases of supplies and other assets in the ordinary course of business or as required pursuant to commitments under existing Contracts or investments in after written notice (including email) to Parent, purchases of assets necessary to be purchased to address an operational emergency during the two-day period after the commencement of such emergency; or (B) sell, license, lease or otherwise dispose of (whether by merger, consolidation or acquisition of stock or assets or otherwise) any Personcorporation, except for partnership or other business organization or division thereof or any assets (w) intercompany loansother than the sale of inventory and other assets, advances or capital contributions entered into in between or among and the Company and/or any grant of its whollynon-owned Subsidiariesexclusive licenses, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business);
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(ivii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(jviii) except as set forth on Section 5.1(b)(viii) of the Company Disclosure Letter, enter into, materially amend or modify or terminate (other than terminations without material penalty or loss of material benefit to the Company), or grant any material consent, or waive any material right under, (A) any Material Contract, any other Contract that, if in effect as of the date hereof, would constitute a Material Contract or any material Contract with a Material Customer, in each case (except with respect to any Contract of the type described in clauses (ii) or (viii) of Section 3.15(a)) other than in the ordinary course of business (including ordinary course change orders), (B) any Contract that would require approval of the BRC pursuant to the terms of the BRC Charter in effect as of the date hereof, (C) any customer Contract relating primarily to the civil division of the Company and its Subsidiaries, reasonably likely to involve payments to or from the Company and its Subsidiaries in excess of $95,000,000 or (D) any Contract with a duration reasonably likely to exceed 24 months, that is not terminable by the Company upon 30 days’ written notice (or less) without penalty;
(ix) make, or agree or commit to make, any capital expenditure, except (A) in accordance with the capital expenditure budget set forth in Section 5.1(b)(ix) of the Company Disclosure Letter, plus a 7% variance for each principal category set forth in such capital expenditure budget, (B) capital expenditures necessary to address operational emergencies or (C) as required by Law or a Governmental Entity; provided, that in the case of clauses (B) and (C), the Company shall, to the extent practicable, prior to taking any of the actions contemplated thereby, consult with Parent and shall provide Parent with notice of such action taken as soon as reasonably practicable thereafter;
(x) except (x) as permitted in Section 5.1(b)(vi) of the Company Disclosure Letter or (y) in accordance with the capital expenditure budget set forth on Section 5.1(b)(ix) of the Company Disclosure Letter (plus a 7% variance for each principal category set forth in such capital expenditure budget), (A) make any loans, advances or capital contributions to, or investments in, any other Person (other than a wholly-owned Subsidiary of the Company); (B) incur, assume, endorse, issue, sell, guaranty or otherwise become liable for or modify the terms of any Indebtedness (except that (i) the Company may incur any indebtedness borrowings under the Company’s revolving credit facility included as of the date hereof under the Existing Company Credit Agreement in the ordinary course of business, provided, that no more than $100,000,000, in the aggregate, for borrowed money is outstanding under such revolving credit facility at any time, and (ii) the Company may post letters of credit under the Company’s revolving credit facility included as of the date hereof under the Existing Company Credit Agreement, or guarantee any such enter into parent guarantees, to customers in support of performance by the Company and/or its wholly owned Subsidiaries under Contracts in the ordinary course of business); (C) assume, guarantee, endorse or otherwise become liable or responsible for the indebtedness or other obligations of another Person, issue Person (other than (i) a guaranty by the Company of obligations of its Subsidiaries or sell any debt securities (ii) a guaranty by the Company of obligations of its joint ventures so long as such guaranty together with all other guaranties by the Company of its joint ventures entered into after the date hereof do not exceed $1,000,000 in the aggregate); (D) post or options, warrants, calls or other rights permit to acquire any debt securities be posted Surety Bonds in respect of which the Company or any of its Subsidiaries, guarantee Subsidiaries have any debt securities contingent liability other than Surety Bonds posted to customers in support of another Person, performance by the Company and/or its Subsidiaries under Contracts; (E) enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person (other than any wholly-wholly owned Subsidiary of itthe Company); (F) repurchase or enter into repay any arrangement having Indebtedness, other than the economic effect repayment of indebtedness under the Company’s existing revolving credit facility under the Existing Company Credit Agreement or (G) incur or assume any obligations with respect to any deferred purchase price of property or services (other than trade payables incurred in the foregoingordinary course of business), any conditional sale or other title retention agreement with respect to acquired property, any lease that is required under GAAP to be recorded as a capital lease or finance lease (excluding leases required to be recorded under GAAP as operating leases), or incur any Liens purchase money financing or other than Permitted Liens indebtedness incurred in connection with the foregoing, other than the financing purchase or lease of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiariesequipment;
(kxi) institute anyexcept to the extent required by applicable Law (including Section 409A of the Code), any Company Plan listed on Section 3.11(a) of the Company Disclosure Letter or settle as contemplated by Section 5.8, (A) increase in any manner the compensation (including severance, change-in-control and retention compensation) or compromise benefits of any pending employee or threatened, Legal Actions involving injunctive relief or the payment director of monetary damages by the Company or any of its Subsidiaries Subsidiaries, except for increases in base salary or wage rates of employees (other than executive officer employees) of up to 5% in the ordinary course of business in connection with the Company’s annual merit review process or in connection with promotions of any amount exceeding $25,000 individually employee (other than executive officer employees) or, after written notice (including email) to Parent, providing overtime pay to non-executive employees to be paid to address an operational emergency during the two-day period after the commencement of such emergency, (B) establish, amend or $100,000 adopt any compensation or benefit plan including any pension, retirement, profit-sharing, bonus or other employee benefit or welfare benefit plan (other than renewals of health plans in the aggregateordinary course of business) with or for the benefit or its employees or directors, (C) accelerate the vesting of, or the lapsing of restrictions with respect to, any Company Stock Options, Company RSUs, Company PSUs or other stock-based compensation, (D) hire any new executive officer or any new employee who is not an executive officer other than any non-executive officer employee with a target base salary of not more than $250,000 or terminate any executive officer, other than for cause or (E) other than in the ordinary course of business, enter into, amend, extend or renew a Labor Agreement;
(xii) implement or adopt any Legal Action brought against Parent material change in its methods of accounting, except as may be appropriate to conform to changes in statutory or Merger Sub arising out of a breach regulatory accounting rules or alleged breach of this Agreement by Parent GAAP or Merger Sub; providedregulatory requirements with respect thereto;
(xiii) compromise, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which (including any Action relating to this Agreement or the transactions contemplated hereby), or consent to the same, other than compromises, settlements or agreements that involve only the payment of money damages (A) for an amount (in excess of insurance proceeds) for each such compromise or settlement involves a conduct remedy that is, individually, less than $1,000,000 and for all such compromises or injunctive settlements that is, in the aggregate, less than $5,000,000 or similar relief or has a material restrictive impact on (B) consistent with the business of reserves reflected in the Company or any Affiliate thereofCompany’s balance sheet at March 31, 2022;
(lxiv) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(oA) make, change or revoke any material election with respect to Taxes, (B) change any annual Tax electionaccounting period, (C) adopt or change any material method of Tax accounting, file (D) amend any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, (E) surrender any right to claim a material Tax refund, offset or other reduction in Liability or (F) consent to any extension or waiver of the limitations limitation period applicable to any material Tax claim or assessment, in each case, with respect to Taxes;
assessment (p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business), or (G) agree to settle any material Tax claim or assessment;
(xv) abandon, allow to lapse, sell, assign, transfer, grant any security interest in otherwise encumber or dispose of any Company Registered IP, or grant any right or license to any Company Registered IP other than pursuant to non-exclusive licenses entered into in the ordinary course of business;
(xvi) terminate or modify in any material respect, or fail to exercise renewal rights with respect to, any material insurance policy;
(xvii) enter into, materially amend or modify or terminate, any leases of real property for which the annual rental exceeds $10,000,000.
(xviii) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC; or
(sxix) agree or commit to do take any of the foregoing. Nothing contained actions described in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsSections 5.1(b)(i) through 5.1(b)(xviii).
Appears in 1 contract
Samples: Merger Agreement (Infrastructure & Energy Alternatives, Inc.)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement and the Effective Time, the Company agrees (except as expressly contemplated by this Agreement or as required by applicable Law or with to the prior written extent that Parent shall otherwise consent of Parent, conduct in writing) to carry on its business in the usual, regular and ordinary course of businessin 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 therewithwith such business, the Company shall, and shall cause each of its Subsidiaries to, to use its commercially all reasonable efforts consistent with past practice and policies to preserve substantially intact its and its Subsidiaries’ present business organization, to keep available the services of its and its Subsidiaries’ current present officers and employees, to key employees and preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees licensees, and other Persons others having business relationships dealings with it. Without limiting , all with the generality goal of the foregoing, between the date of this Agreement preserving unimpaired its goodwill and ongoing businesses at the Effective Time. The Company shall promptly notify Parent of any event or occurrence or emergency not in the ordinary course of business, except and any material event involving or adversely affecting the Company or its business. Except as otherwise expressly contemplated by this Agreement Agreement, or as set forth disclosed in Section 6.01 of the Company Disclosure Letter or as required by applicable LawSchedule 4.1, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Parent:
(a) amend Enter into any commitment or propose transaction not in the ordinary course of business.
(b) Transfer to amend its certificate any person or entity any rights to the Company Intellectual Property Rights (other than pursuant to End-User Licenses in the ordinary course of incorporation or by-laws (or other comparable organizational documentsbusiness);
(bc) Enter into or amend in any material respect any 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;
(d) Amend or otherwise modify in any material respect (or agree to do so), except in the ordinary course of business, or violate the terms of, any of the agreements set forth or described in the Company Schedules where such violation would have a Material Adverse Effect;
(e) Commence any litigation;
(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 reclassifyreclassify 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, or repurchase, redeem or otherwise acquire, directly or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting ofindirectly, any shares of its capital stock (or options, warrants or other rights exercisable therefor), other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries pursuant to the Company or other direct or indirect wholly-owned Subsidiaries of the Company)'s repurchase right under employee restricted stock purchase agreements;
(dg) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) Except for the issuance of shares of Company Common Stock upon exercise or conversion of the exercise presently outstanding Series A and Series B Preferred Stock, the Warrants and Company Options, issue, grant, deliver or sell or authorize or propose the issuance, grant, delivery or sale of, or purchase or propose the purchase of, any shares of its capital stock or securities convertible into, or subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, character obligating it to issue any such shares or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessother convertible securities;
(h) transfer, license, sell, lease Cause or otherwise dispose permit any amendments to its Certificate of any assets (whether by way of merger, consolidation, sale of stock Incorporation or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned SubsidiariesBylaws;
(i) adopt Acquire or effect a plan of complete agree to acquire by merging or partial liquidationconsolidating with, dissolutionor by purchasing any assets or equity securities of, restructuringor by any other manner, recapitalization any business or any corporation, partnership, association or other reorganization;
(j) incur any indebtedness for borrowed money business organization or guarantee any such indebtedness of another Persondivision thereof, issue or sell any debt securities otherwise acquire or options, warrants, calls or other rights agree to acquire any debt securities of the Company or any of its Subsidiariesassets which are material, 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofCompany;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(s) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Conduct of Business of the Company. The Company shallhereby covenants and agrees that, and shall cause each of its Subsidiaries to, during the period from the date of this Merger Agreement until the Effective Time, except as the Company, unless otherwise expressly contemplated by this Merger Agreement or as required consented to in writing by applicable Law or with Acquiror, will, and will cause the prior written consent of Parent, conduct its business in the ordinary course of business, Subsidiaries to and, to the extent consistent therewithextent, and only to the extent, such action is permitted by law and the partnership agreements and will not cause the Company shallor its Subsidiary, and shall as the case may be, to become or be treated as a general partner rather than a limited partner, will endeavor to cause each of its Subsidiaries the Cellular Partnerships to, carry on their respective businesses only in the Ordinary Course of Business, use its commercially reasonable their respective best efforts to preserve substantially intact its their business organizations and its Subsidiaries’ business organizationAssets, to keep available maintain their rights and franchises, retain the services of its and its Subsidiaries’ current their officers and employees, to preserve its key employees and its Subsidiaries’ present maintain their relationships with customers, suppliers, distributors, licensors, licensees and other Persons others having business relationships dealings with itthem, and use their respective 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, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Merger Agreement, from the date of this Merger Agreement or as set forth in Section 6.01 of until the Company Disclosure Letter or as required by applicable Law, Effective Time the Company shall not, nor and shall it not permit any of its the Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed)::
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company);
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase in any manner the compensation or fringe benefits of, or pay any bonus or other form of directors, officers or employees of the Company or any of its Subsidiaries, (ii) enter into any new or amend in any material respectspecial compensation to, any existing employmentdirector, severance, retention or change in control agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for (A) increases or bonuses in the replacement Ordinary Course of Business to employees who are not directors or officers, (B) customary year-end bonuses to officers in accordance with amounts provided for in the Company's 1997 budget, and (C) Bonuses; (ii) grant any current employee whose employment with severance or termination pay (other than pursuant to the normal severance, change-in-control, or similar policy of the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and LiabilitiesMerger Agreement) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(s) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.to,
Appears in 1 contract
Conduct of Business of the Company. The Company shallExcept as otherwise expressly permitted by the terms of this Agreement, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until hereof to the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, carry on their respective businesses in the ordinary course in substantially the same manner as presently conducted (including with respect to advertising, promotions and capital expenditures) and in compliance in all material respects with Applicable Laws, use its commercially their reasonable best efforts to preserve substantially intact its and its Subsidiaries’ business organization, consistent with past practices to keep available the services of its the present employees of the Company and its Subsidiaries’ current officers Subsidiaries and employees, to preserve its and its Subsidiaries’ present their relationships with customers, supplierssuppliers and others with whom the Company and its Subsidiaries deal to the end that their goodwill and ongoing businesses shall not be materially impaired in any material respect at the Closing Date. The Company shall not, distributorsand shall cause its Subsidiaries not to, licensorstake any action that would, licensees or that is reasonably likely to, result in any of the representations and other Persons having business relationships with itwarranties of the Company set forth in Article IV being untrue in any material respect as of the date made or in any of the conditions to the consummation of the Merger set forth herein not being satisfied. Without In addition, and without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated permitted by the terms of this Agreement or as set forth in Section 6.01 6.1 of the Company Disclosure Letter or as required by applicable LawLetter, during the period from the date hereof to the Effective Time, the Company shall not, nor not (and shall it permit any of cause its Subsidiaries not to), without the prior written consent of Parent Acquiror, which decision regarding consents shall be made promptly (which consent shall not be unreasonably withheld or delayed):in light of its circumstances) after receipt of notice seeking such consent:
(ai) amend or propose to except for the Charter Amendment, amend its certificate Restated Certificate of incorporation or by-laws (Incorporation, Bylaws or other comparable organizational documents);
(bii) split, combine or reclassify, repurchasesubject to Sections 7.7 and 7.14(b), redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, acquire any shares of its capital stock, or issue any capital stock or any option, warrant or right relating thereto or any securities convertible into or exchangeable for any shares of its capital stock, or split, combine or reclassify any of its capital stock or issue any securities in exchange or in substitution for shares of its capital stock;
(iii) subject to Section 7.14(b), (A) grant or agree to grant to any employee any increase in wages or bonus, severance, profit sharing, retirement, deferred compensation, insurance or other compensation or benefits, or establish any new compensation or benefit plans or arrangements, or amend or agree to amend any existing Benefit Plans or Equity Appreciation Rights Plans, except as may be required under existing agreements or in the ordinary course of business consistent with past practices or (B) enter into any new RSPA or amend the terms of any existing RSPA or accelerate the vesting of any shares of Class B Common Stock issued thereunder;
(iv) merge, amalgamate or consolidate with any other entity in any transaction in which the Company is not the surviving corporation (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned mergers between Subsidiaries of the Company), sell all or substantially all of its business or assets, or acquire all or substantially all of the business or assets of any other Person;
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (iiv) enter into any new or amend in any material respect, any existing employment, severanceconsulting, retention severance or change in control similar agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employeesindividual, except with respect to employees with severance gifts or payments of a base salary of less than $60,000 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 nominal nature to accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its whollypersons holding non-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case officer/executive level positions in the ordinary course of business consistent with past practice;
(vi) subject to Section 7.7, declare, set aside or make any dividends, payments or distributions in cash, securities or property to the stockholders of the Company, whether or not upon or in respect of any share of Company Capital Stock;
(vii) incur or assume any Indebtedness other than as specifically set forth in Section 6.1(vii) of the Company Disclosure Letter;
(viii) voluntarily grant any material Encumbrance on any of its material assets, other than Encumbrances that are incurred in the ordinary course of business;
(ix) make any change in any method of accounting or accounting practice or policy, except as required by Applicable Laws or by GAAP;
(x) make or incur any capital expenditures that are not set forth in Section 6.1(x) of the Company Disclosure Letter or that, individually, are in excess of $25 million or, in each case excluding the aggregate, in excess of $50 million;
(xi) subject to Section 7.7, sell, lease, swap or otherwise dispose of any transferassets, licenseother than (A) sales, leases, swaps or other dispositions of such assets not having a fair market value in excess of $15 million individually or $30 million in the aggregate (so long as the Company provides notice to Acquiror of any sale, lease lease, swap or other disposition of any asset having a fair market value of greater than $5 million) or (B) swaps of Systems or assets of Systems in connection with any transaction between order to facilitate the clustering of Systems or among dispose of Systems located in the Company and/or one or Acquiror Region; PROVIDED, HOWEVER, that (1) such swaps shall not in the aggregate involve more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 than 500,000 Subscribers of the Company or any of its Subsidiaries, guarantee (2) 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages cable television systems acquired by the Company or any of its Subsidiaries in any such swap shall not be located in the Acquiror Region, (3) any cable television systems acquired by the Company in any such swap shall not be in a franchise area where there is a substantial overbuild with any other CATV system owned by the Company, Acquiror or any of their respective Affiliates, (4) the aggregate amount of cash paid by the Company or any amount exceeding of its Subsidiaries in any such swap shall not exceed $25,000 individually or $100,000 50 million in the aggregate, other than (5) any Legal Action brought against Parent or Merger Sub arising out such swap shall require the approval of a breach or alleged breach of this Agreement by Parent or Merger Sub; providedAcquiror, which approval shall not be unreasonably withheld and Acquiror shall be reasonably satisfied that neither the Company nor has received substantially equivalent value including cash or other assets and (6) to the extent that the Company or any Subsidiary must apply for the consent of its Subsidiaries the Governmental Authority as a condition to the transfer of control or assignment of any Franchise associated with any such swap, such application shall settle or agree include an application to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business Governmental Authority, and relevant information relating to the proposed transaction, requesting contemporaneous approval for the anticipated acquisition of the Company or its Subsidiary by Acquiror as contemplated herein and the transfer of control of said Franchise to the Surviving Corporation in accordance with the terms hereof; and PROVIDED, FURTHER, that any Affiliate thereofconsent required from a Governmental Authority as a condition to consummating such swap shall be deemed a Required Franchise Consent;
(lxii) make acquire or agree to acquire by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or equity in, or by any material change other manner, any business of any Person or acquire or agree to acquire any assets (other than supplies, raw materials and inventory in any method of financial accounting principles or practicesthe ordinary course, except for any change required capital expenditures permitted by a change in GAAP or applicable Lawclause (x) above and asset swaps permitted by clause (xi) above);
(mxiii) enter into abandon, avoid, dispose, surrender, fail to file for timely renewal, terminate or amend in any materially adverse manner the terms of any material agreementFranchises, agreement in principleany FCC license that would have a material adverse effect on the operation of a System or the Social Contract Order, letter except as amended by virtue of intentthe proposed Social Contract Amendment, memorandum of understanding or similar Contract or, with respect to any joint ventureMaterial Franchise, strategic partnership or alliancefail to file for renewal pursuant to Section 626(a) of the Cable Act;
(nxiv) authorize, delete any programming service on the Systems or make any commitment with respect to, any capital expenditure, except material change in the programming services offered on the Systems other than in the ordinary course of business or as contemplated required by the Company’s existing fiscal year 2012 Capital BudgetCable Act, the Social Contract Order or any amendments thereto;
(oxv) makeexcept as otherwise permitted by clauses (xi) and (xii), change modify, amend, terminate, renew or revoke fail to use reasonable efforts to renew any material Tax electioncontract or agreement necessary to continue the Company's business in the ordinary course or waive, change release or assign any material method rights or claims, other than in the ordinary course of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxesbusiness;
(pxvi) fail offer free or reduced-price service as an inducement to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangementany Person, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice practice;
(it being understood thatxvii) except as permitted by Applicable Law, for including the purposes Social Contract Order and any amendments thereto, and (A) as disclosed to Acquiror in writing at least 30 days prior to any rate change, implement any rate change, retiering or repackaging of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into CATV programming offered by the Company or any of its Subsidiaries Subsidiaries, (B) and as disclosed in writing to Acquiror at least 30 days prior to any cost-of-service rate change make any cost-of-service election under the rules and regulations adopted under the Cable Act, (C) determine a method of refund pursuant to 47 C.F.R. Section 76.942(d) or 76.961(c) or (D) amend any Franchise or agree to make any payments or commitments, including commitments to make future capital improvements or provide future services, in connection with any renewal of any Franchise other than that which the Company would make in the ordinary course of business;
(xviii) enter into any agreement, understanding or commitment that restrains, limits or impedes the Company's or Acquiror's ability to compete with or conduct any business or line of business;
(xix) invest or enter into any agreement, understanding or commitment, whether written or oral, by or on behalf of the Company or its Subsidiaries, to invest or provide additional capital in respect of assets, businesses or entities; PROVIDED, HOWEVER, that the restrictions contained in this clause shall not apply to existing commitments as set forth in Section 6.1(xix) of the Company Disclosure Letter or to any investments in excess of $10 million individually or $20 million in the aggregate;
(xx) except as otherwise provided in clause (xix) above or Section 7.14, enter into any material contract or agreement with, or make any loan or advance to, any Affiliate (other than a wholly owned Subsidiary) of the Company or any stockholder or Affiliate thereof;
(xxi) enter into, or amend the terms of, any agreement relating to interest rate swaps, caps or other hedging or derivative instruments relating to Indebtedness of the Company and its Subsidiaries, except as required under agreements relating to existing Indebtedness and Indebtedness permitted by clause (vii) above;
(xxii) conduct its business in a manner or take, or cause to be taken, any other action (including, without limitation, effecting or agreeing to effect or announcing an intention or proposal to effect, any acquisition, business combination, merger, consolidation, restructuring or similar transaction) that would or might reasonably be expected to prevent Acquiror or the Company from consummating the transactions contemplated hereby in accordance with the terms of this Agreement (regardless of whether such action would otherwise be permitted or not prohibited hereunder), including, without limitation, any action which may limit the ability of Acquiror or the Company to consummate the transactions contemplated hereby as a result of antitrust or other regulatory concerns;
(xxiii) purchase, sell or trade (or announce any intention or proposal to purchase, sell or trade) any shares of Media Stock, or take any other action a principal purpose of which is to affect the calculation of the Determination Price; or
(sxxiv) agree agree, whether in writing or commit otherwise, to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Timedate hereof, Acquiror has delivered to the Company shall exercise, consistent with a list (which the terms and conditions Acquiror may update from time to time) designating certain individuals of the Acquiror to whom the Company may direct requests for consents under this Agreement, complete control and supervision over its and its Subsidiaries’ operationsSection 6.1.
Appears in 1 contract
Samples: Merger Agreement (Us West Inc)
Conduct of Business of the Company. (1) The Company shall, covenants and shall cause each of its Subsidiaries toagrees that, during the period from the date of this Agreement until the earlier of the Effective TimeTime and the time that this Agreement is terminated in accordance with its terms, except as expressly contemplated by this Agreement (a) with the express prior written consent of the Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned), (b) as required by applicable Law or an Order from a Governmental Entity, or (c) as required or expressly permitted by this Agreement (including pursuant to any Pre-Acquisition Reorganization pursuant to and in accordance with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewithSection 4.6), the Company shall, and shall cause each of its Subsidiaries to, conduct its business in the Ordinary Course and in accordance with applicable Law in all material respects, use its commercially reasonable efforts to maintain and preserve substantially intact its and its Subsidiaries’ the business organization, to keep available assets, properties and goodwill of the services of its Company and its Subsidiaries’ current officers Subsidiaries and employeesmaintain relations with the Company Employees and the suppliers, to preserve its and its Subsidiaries’ present relationships with customers, supplierslandlords, distributorscreditors, licensorspartners, licensees members, Governmental Entities and other Persons having business relationships with it. the Company or its Subsidiaries.
(2) Without limiting the generality of Section 4.1(1), the foregoingCompany covenants and agrees that, between during the period from the date of this Agreement until the earlier of the Effective Time and the Effective Timetime that this Agreement is terminated in accordance with its terms, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of (a) with the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the express prior written consent of Parent the Purchaser (which consent shall not be unreasonably withheld withheld, delayed or delayed):conditioned), (b) as required by applicable Law (including, for greater certainty, Antitrust Laws) or an Order from a Governmental Entity, (c) as required or expressly permitted by this Agreement or (d) as set forth in Section 4.1(2) of the Company Disclosure Letter, the Company shall not, and shall cause its Subsidiaries not to, directly or indirectly:
(a) amend its Constating Documents or propose to amend the Constating Documents of any of its certificate of incorporation or by-laws (or other comparable organizational documents)Subsidiaries;
(b) split, combine or reverse split, subdivide, combine, reclassify, repurchasemodify or amend the terms of any shares or other securities of the Company or of any of its Subsidiaries, redeem including any debt securities, options, equity or otherwise acquireequity-based compensation, restricted stock, restricted stock units, warrants, convertible securities or offer other rights of any kind to repurchase, redeem or otherwise acquire, acquire any Company Securities or Company Subsidiary Securitiesof such securities;
(c) except to the extent covered by the adjustment set forth in Section 2.6 of the Plan of Arrangement (and in such event, only following consultation in good faith with the Parent), declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock, property or otherwiseany combination thereof) in respect of, or enter into any Contract with respect to on the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company);
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 other than (i) cash dividends paid by wholly owned Subsidiaries of the Company to the Company or its other wholly owned Subsidiaries and (ii) interest payments pursuant to the Trust Indenture;
(d) redeem, repurchase, or otherwise acquire or offer to redeem, repurchase or otherwise acquire, directly or indirectly, any debt shares or securities of another Personthe Company or any of its Subsidiaries, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person (other than any wholly-owned Subsidiary redemption of itDSU Awards, PSU Awards, or RSU Awards, in each case in accordance with their terms as of the date hereof;
(e) (i) issue, grant or sell or enter into any agreement or arrangement having encumbering any shares or other securities of the economic effect of Company or any of its Subsidiaries, including any securities, options, warrants or similar rights exercisable or exchangeable for or convertible into shares or other securities of the foregoingCompany or any of its Subsidiaries, except pursuant to the conversion of Debentures in accordance with their terms as of the date hereof or the exercise, redemption or settlement of Options, DSU Awards, PSU Awards or RSU Awards, in each case in accordance with their terms as of the date hereof, or incur (ii) pledge any Liens shares or other than Permitted Liens in connection with securities of the foregoingCompany’s Subsidiaries, other than any pledges in existence as of the financing date hereof as collateral under the Credit Facility;
(f) acquire (by merger, consolidation, acquisition of ordinary course trade payables consistent with past practice shares or assets or otherwise), directly or indirectly, in one transaction or in any series of related transactions, assets (other than the purchase of supplies, inventories and materials in the Ordinary Course), securities, properties or businesses, other than acquisitions that (i) are limited to the CAG Group, (ii) are for a price, on a per transaction or series of related transactions basis, not in excess of US$25,000,000 individually or US$50,000,000 in the aggregate (it being acknowledged and agreed that the transactions set forth on Section 4.1(2)(f) of the Company Disclosure Letter shall, if entered into, count toward such amounts) and (iii) would not and would not reasonably be expected to impede, prevent or delay the consummation of the transactions contemplated by this Agreement; provided that this Section 4.1(2)(f) shall not prohibit any expenditure otherwise permitted pursuant to an existing financing facilitySection 4.1(2)(l);
(g) adopt a plan of liquidation or resolutions providing for the liquidation, except for intercompany loans entered into in between dissolution or among winding up of the Company and/or or any of its whollySubsidiaries;
(h) amalgamate, merge or combine with any Person;
(i) enter into, or resolve to enter into, any agreement that has the effect of creating a joint venture, partnership, shareholders’ agreement, profit-owned sharing arrangement, collaboration agreement or co-development agreement;
(j) reduce the stated capital of the shares of the Company or any of its Subsidiaries;
(k) institute anysell, pledge, lease or settle otherwise dispose of or compromise transfer any pending assets, properties or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business businesses of the Company or of any Affiliate thereofof its Subsidiaries, or any interest therein, other than (i) sales of inventory in the Ordinary Course, (ii) sales, dispositions or transfers (A) having a value of less than US$10,000,000 individually or US$20,000,000 in the aggregate and (B) involving only assets, properties or businesses of the CAG Group and (iii) any pledges required to be made as collateral under the Credit Facility pursuant to an agreement or undertaking in effect on the date hereof;
(l) make any material change capital expenditures that in any method the aggregate exceed 110% of financial accounting principles or practicesthe Company’s annual budget for the fiscal year ending December 31, except for any change required by a change in GAAP or applicable Law2023, as set forth on Section 4.1(2)(l) of the Company Disclosure Letter;
(m) enter into any material agreement, agreement make (other than in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) makeOrdinary Course), change or revoke any material Tax election, change settle or compromise any material method audit, claim, action, investigation, examination, assessment, deficiency, litigation, proceeding or proposed adjustment in respect of Tax accountingany Taxes, file any material amended Tax Return, enter into any material closing agreementagreement with a Governmental Entity with respect to Taxes, settle make or request any Tax ruling from a Governmental Entity with respect to material claim or assessmentTaxes, surrender any right to claim a material Tax abatement, reduction, deduction, exemption, credit or refund, offset or other reduction in Liability or consent to any the extension or waiver of the statutory period of limitations period applicable to any material claim Tax matter (other than in the Ordinary Course), enter into any Tax indemnity agreement, Tax sharing agreement, Tax allocation agreement or assessmentsimilar Contract or arrangement (other than such commercial Contract entered into in the Ordinary Course the principal subject of which is not Taxes) (a “Tax Sharing Agreement”), or adopt, amend or change in any material respect any of its methods of reporting income and deductions, any Tax accounting period or any material Tax accounting method;
(n) incur, issue, redeem or prepay any Indebtedness, except for (i) drawings or repayments under the Credit Facility and local overdraft USD and GPD facilities and the replacement of existing surety bonds in each case in the Ordinary Course and (ii) any borrowings incurred in the Ordinary Course between the Company and any of its wholly owned Subsidiaries or between any of such wholly owned Subsidiaries;
(o) make any loan or advance to, or any capital contribution or investment in, or assume, guarantee or otherwise become liable with respect to the liabilities or obligations of, any Person, except (i) any advance or other investment made by the Company to a customer in the Ordinary Course based on sales volume or purchase commitments (typically known as customer investments) and (ii) between the Company and any of its wholly owned Subsidiaries or between any of such wholly owned Subsidiaries, in each case, with respect to Taxescase in the Ordinary Course;
(p) fail enter into, amend, otherwise modify or terminate any Derivatives Transactions (or Contracts relating thereto), other than interest rate or currency xxxxxx entered into, amended, otherwise modified or terminated in the Ordinary Course;
(q) make any material change in the Company’s or any of its Subsidiaries’ methods, policies or procedures of accounting, except as required by changes in GAAP after the date hereof or pursuant to maintain orders of a Securities Authority;
(r) make any bonus or profit sharing distribution or similar payment of any kind, other than in full accordance with an Employee Plan as in force as of the date hereof;
(s) grant any general increase in the rate of wages, salaries, commissions, bonuses or other remuneration of any Company Employees other than as provided for in the Company’s annual budget for the fiscal year ending December 31, 2023, as set forth on Section 4.1(2)(s) of the Company Disclosure Letter;
(t) enter into, amend, increase or accelerate any severance, notice, termination, retention or change of control agreement with any director or Company Employee, other than the payment of severance or termination pay to Company Employees with base compensation less than $250,000 in the Ordinary Course and the entering into of severance agreements with Company Employees with base compensation less than $250,000 in the Ordinary Course. (u) (i) adopt, enter into, amend or terminate any material Employee Plan; (ii) provide any material employee benefit to any director or Company Employee that is not required under the terms of any Contract or Employee Plan in effect on the date of this Agreement, other than non-cash benefits provided in the Ordinary Course; (iii) grant, accelerate, fund, secure, increase or otherwise amend any payment, award or other benefit payable to, or for the benefit of, any director or Company Employee other than as required by an Employee Plan as in effect as of the date hereof; (iv) hire any executive officer or promote any Company Employee to an executive officer position; or (v) terminate the employment of any executive officer of the Company other than for cause;
(v) enter into, amend or modify in any material insurance policies covering respect any Collective Agreement;
(w) (i) enter into any settlement agreement or consent decree with any Governmental Entity or (ii) commence, cancel, settle or compromise any Action, except for (A) any settlement or compromise that results solely in monetary relief in an amount not greater than $500,000 individually or $5,000,000 in the aggregate or (B) any commencement, cancellation, settlement or compromise of any Action by the Company or its Subsidiaries for the collection of past due accounts receivable in the Ordinary Course, in the case of each of clauses (A) and its (B), that (I) does not impose any material future restrictions or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing requirements on the date hereofCompany or any of its Subsidiaries and (II) would not reasonably be expected to impede, prevent or implement a rights plan, “poison pill” or similar arrangement, except as delay the consummation of the transactions contemplated by this Agreement;
(rx) enter into, terminatematerially amend or modify, terminate or renew or extend (other than automatic renewals or extensions pursuant to the terms thereof) any existing Material Contract or Contract that if entered into prior to the date hereof would be a Material Contract, other than entry into, or amendment, modification, renewal or extension of, any Material Contracts of the type set forth in clauses (i), (ii), (vi), (vii), (x), (xi), (xiv), (xv) and (xvi) of the definition of “Material Contract”, in each case in the Ordinary Course and not otherwise restricted by this Section 4.1(2);
(y) except as contemplated in Section 4.9 and except for scheduled renewals in the Ordinary Course, materially amend, modify or terminate any material insurance policy of the Company or any of its Subsidiaries in effect on the date of this Agreement, unless, concurrently with any such termination, replacement policies providing substantially equivalent coverage for substantially similar premiums are in full force and effect;
(i) acquire real or immovable property, other than acquisitions solely in the CAG Group on a per transaction or series of related transactions basis not in excess of US$5,000,000 individually or US$10,000,000 in the aggregate, or (ii) dispose of any Owned Property or other real or immovable property, other than dispositions having a cost or value on a per transaction or series of related transactions basis not in excess of US$5,000,000 individually or US$10,000,000 in the aggregate; provided, that this Section 4.1(2)(z) shall not prohibit any acquisition otherwise permitted pursuant to Section 4.1(2)(f) or any expenditure otherwise permitted pursuant to Section 4.1(2)(l);
(aa) (i) sell, assign, license or transfer all or any portion of the Intellectual Property Rights owned by or exclusively licensed to the Company or any of its Subsidiaries, other than non-exclusive licenses in connection with the sale of products or services entered into in the Ordinary Course or (ii) abandon or cease to maintain any material Intellectual Property Rights owned by or exclusively licensed to the Company or any of its Subsidiaries;
(bb) enter into, amend, modify or waive any material right under, provision of any Material Contract Related Party Agreement;
(cc) enter into any new line of business or Permit, abandon or discontinue any existing line of business;
(dd) knowingly take any action or enter into any transaction (other than Contracts entered into with customers the transactions contemplated in this Agreement and the ordinary course Plan of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and LiabilitiesArrangement) that are, could reasonably be expected to have the effect of materially reducing or eliminating the amount of the Tax cost “bump” pursuant to paragraphs 88(1)(c) and 88(1)(d) of the Tax Act in respect of the aggregate, substantially inconsistent with securities of any Subsidiaries of the terms Company and conditions found in other Contracts of similar size and scope previously entered into non-depreciable capital property owned by the Company or any of its Subsidiaries on the date hereof, upon an amalgamation or winding up of the Company or any of its Subsidiaries or any of their respective successors; or (ee) authorize, agree, resolve or otherwise commit, whether or not in the ordinary course of business); or
(s) agree or commit writing, to do any of the foregoing. Nothing contained .
(3) Without limiting the provisions of this Agreement, nothing in this Agreement shall give Parentis intended to allow the Parent or the Purchaser the right to control, directly or indirectly, the right to control operations of the business of the Company or direct the Company’s or any of its Subsidiaries’ operations Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Arrangement Agreement (LKQ Corp)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from From the date of this Agreement until the Effective TimeTime or the earlier termination of this Agreement, except as expressly contemplated by this Agreement unless Parent shall otherwise consent in writing or as required by applicable Law or with the prior written consent of Parent, conduct its business otherwise expressly provided for in the ordinary course of business, and, to the extent consistent therewiththis Agreement, the Company shall, and shall cause each of its the Company Subsidiaries to, conduct its business only in the ordinary course of business consistent with past practice and shall use its commercially reasonable efforts to preserve substantially intact its business organization and its Subsidiaries’ goodwill and relationships with customers, suppliers and others having business organization, dealings with it and to keep available the services of its and its Subsidiaries’ current officers and employeeskey employees on terms and conditions substantially comparable to those currently in effect, in each case, in the ordinary course consistent with past practice and to preserve its timely file all reports required to be filed with the SEC. In addition to and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by provided for in this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable LawConversion and Contribution Agreement, from the Company shall not, nor shall it permit any of its Subsidiaries todate hereof until the Effective Time, without the prior written consent of Parent (which consent shall not be unreasonably withheld Table of Contents withheld, conditioned or delayed):, except with respect to any Proceedings described in clause (m) of this Section 5.01 that relate to this Agreement, the Merger or any other transactions contemplated herein, in which case such consent may be withheld, conditioned or delayed in Parent’s absolute discretion), the Company shall not and shall not permit any of its Subsidiaries to:
(a) amend adopt or propose to amend any change in its certificate Constituent Documents in effect as of incorporation or by-laws (or other comparable organizational documents)the date hereof, except the Restated Articles contemplated herein;
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(ci) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock, property stock or otherwiseproperty) in respect of, or enter into of any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct declared, set aside, made or indirect paid by any Company Subsidiary wholly-owned Subsidiaries to by the Company or other direct or indirect wholly-owned Subsidiaries of another Company Subsidiary to the Company), (ii) split, combine or reclassify any of its capital stock or issue or propose or authorize the issuance of any other securities (including options, warrants or any similar security exercisable for, or convertible into, such other security) in respect of, in lieu of, or in substitution for, shares of its capital stock, or (iii) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company or any Company Subsidiary, or any other equity interests or any rights, warrants or options to acquire any such shares or interests;
(dc) issue, sell, pledgegrant, dispose of pledge or otherwise encumber any Company Securities shares of its capital stock or Company Subsidiary Securitiesother securities (including any options, warrants or any similar security exercisable for or convertible into such capital stock or similar security) other than (i) the issuance of shares of Company Common Stock upon pursuant to the exercise of any Company Options outstanding on the date hereof under the Company Stock Option Plans or any Company Warrants outstanding under on the date hereof, in each case in accordance with their respective terms in effect on the date hereof, (ii) issuances by a wholly-owned Company Subsidiary of capital stock to such Company Subsidiary’s parent or another wholly-owned Company Subsidiary, (iii) delivery of capital stock upon the vesting of any Company Restricted Shares or (iv) issuances of shares of Common Stock Plans as issuable upon conversion of any shares of Series D Preferred Stock or Series E Preferred Stock outstanding on the date of this Agreement in accordance with its termsthe terms of the Company Articles of Incorporation in effect on the date hereof;
(d) merge or consolidate with any other Person or acquire an amount of assets or equity of any other Person in excess of $50,000 individually or in the aggregate;
(e) sell, lease, license, subject to a Lien (other than a Permitted Lien), encumber or otherwise surrender, relinquish or dispose of any assets, property or rights (including capital stock of a Company Subsidiary) except (i) as set forth on Section 5.01(e) of the Company Disclosure Letter, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice;
(f) make any loans, in each case excluding advances or capital contributions to, or investments in, any transfer, license, sale, lease or other disposition in connection with Person other than (i) from any transaction between or among the Company and/or one or more of its wholly-owned SubsidiariesSubsidiaries of Table of Contents the Company to the Company or (ii) advances to employees in the ordinary course of business consistent with past practice not to exceed $10,000 in each individual case;
(g) create, incur, guarantee or assume any Indebtedness, issuances of debt securities, guarantees, loans or advances, other than any of the foregoing created, incurred, guaranteed or assumed in the ordinary course of business consistent with past practice for working capital and cash management purposes under any revolving credit agreement in existence as of the date hereof or lease obligations incurred in the ordinary course of business consistent with past practice;
(h) make any capital expenditure other than in accordance with the budget of the Company and the Company Subsidiaries for the fiscal year ending December 31, 2007;
(i) materially amend or otherwise materially modify benefits under any Company Benefit Plan, materially accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Benefit Plan as currently in effect on the date hereof, fail to make any required contribution to any Company Benefit Plan, merge or transfer any Company Benefit Plan or the assets or liabilities of any Company Benefit Plan, change the sponsor of any Company Benefit Plan, or terminate or establish any Company Benefit Plan, in each case except as required by an existing agreement, plan or applicable Law;
(j) grant any increase in the compensation or benefits of directors, officers, employees, consultants, representatives or agents of the Company or any Company Subsidiary other than as required by any Company Benefit Plan in effect on the date hereof and payments and increases in the ordinary course of business consistent with past practice;
(k) enter into or amend or modify any change of control, severance, consulting, retention or employment agreement with any officer or employee, or any change of control, severance, consulting, retention or employment plan, program or arrangement;
(l) hire or terminate the employment or contractual relationship of any officer or employee of the Company or any Company Subsidiary, as the case may be, other than hirings or terminations in the ordinary course of business consistent with past practice or that, individually and in the aggregate, would not result in (i) a material increase in the number of persons providing services to the Company and the Company Subsidiaries in all such capacities, (ii) in the case of hirings, a material increase in the aggregate payroll and other benefits costs to the Company or such Company Subsidiary, and (iii) in the case of terminations, material liability to the Company or any Company Subsidiaries in excess of the costs savings, if any, directly derived from such terminations;
(m) settle or compromise any action, suit, claim, litigation, proceeding, arbitration, investigation, audit or controversy involving claims, liabilities or obligations Table of Contents (each, a “Proceeding”), or enter into any consent, decree, injunction or similar restraint or form of equitable relief in settlement of any Proceeding;
(n) make or rescind any material election relating to Taxes, settle or compromise any Proceeding relating to Taxes, make a request for a written ruling of a Taxing Authority relating to Taxes, enter into a material written and legally binding agreement with a Taxing Authority relating to Taxes, or change any of its material methods of reporting income or deductions for federal income Tax purposes (other than as required by applicable Law) from those employed in the preparation of its federal income Tax returns for the taxable year ending December 31, 2006;
(o) modify, amend, fail to renew or terminate any Company Contract, enter into any successor agreement to an expiring Company Contract that changes the terms of the expiring Company Contract in a way that is materially adverse to the Company or any Company Subsidiary, or modify, amend or enter into any new agreement that would have been considered a Company Contract if it were entered into at or prior to the date hereof;
(p) enter into or renew or extend any agreements or arrangements that limit or otherwise restrict the Company or any of the Company Subsidiaries or any of their respective Affiliates or any successor thereto, or that could reasonably be expected to, after the Effective Time, limit or restrict the Surviving Corporation or any of its Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(q) change any method of accounting or accounting principles or practices by the Company or any Company Subsidiary, except for any such change required by a change in GAAP;
(r) terminate, cancel, amend or modify any material insurance policies maintained by it covering the Company or the Company Subsidiaries or their respective properties which is not replaced by a comparable amount of insurance coverage;
(s) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 reorganization 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(kt) institute any, take any actions or settle omit to take any actions that would or compromise would be reasonably likely to (i) result in any pending or threatened, Legal Actions involving injunctive relief or of the payment representations and warranties of monetary damages by the Company and the Company Subsidiaries set forth in this Agreement being or becoming untrue or incorrect in any material respect; (ii) result in any of its Subsidiaries the conditions to the consummation of any amount exceeding $25,000 individually the Merger and the other Transactions set forth in Sections 6.01 and 6.02 not being satisfied or $100,000 in (iii) materially impair the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business ability of the Company or any Affiliate thereof;
(l) make any material change Parent to consummate the Merger and the other Transactions in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent accordance with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company hereof or any of its Subsidiaries in the ordinary course of business)materially delay such consummation; or
or (su) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Merger Agreement (Critical Path Inc)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of businessbusiness consistent with past practice, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to preserve substantially intact its and its Subsidiaries’ ' business organization, to keep available the services of its and its Subsidiaries’ ' current officers and employees, to preserve its and its Subsidiaries’ ' present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in on Section 6.01 5.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):): 15 3270196v3
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(b) (i) split, combine or reclassifyreclassify any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
, (ciii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the CompanySubsidiary);
(dc) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock Option in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with its their terms, or (iiiii) the issuance of Company Equity Awards and the issuance of shares of Company Common Stock upon the exercise of such Company Equity Awards (other than directors or executive officers of the Company) in accordance with their terms in the Stockholder Rights Agreementordinary course of business consistent with past practice;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(gd) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into Person in between or among the Company and/or any excess of its wholly-owned Subsidiaries, (x) trade payables arising $25,000 in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessaggregate;
(hi) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in provided that the case foregoing shall not prohibit the Company and its Subsidiaries from transferring, licensing, selling, leasing or disposing of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(iii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(jf) 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiariespractice;
(kg) institute anyenter into or amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any Company Material Contract or any other 3270196v3 Contract that, if in effect as of the date hereof would constitute a Company Material Contract hereunder;
(h) institute, settle or compromise any Legal Actions pending or threatenedthreatened before any arbitrator, Legal Actions court or other Governmental Entity involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than (i) 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 (ii) the settlement of claims, liabilities or obligations reserved against on the most recent balance sheet of the Company included in the Company SEC Documents; provided, provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofCompany's business;
(li) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(mj) (i) settle or compromise any material Tax claim, audit or assessment, (ii) make or change any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, (iii) amend any material Tax Returns or file claims for material Tax refunds, or (iv) enter into any material closing agreement, surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or its Subsidiaries;
(k) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(nl) authorizeexcept in connection with actions permitted by Section 5.04 hereof, take any action to exempt any Person from, or make any commitment with respect acquisition of securities of the Company by any Person not subject to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change state takeover statute or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim similar statute or assessment, surrender any right regulation that applies to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, Company with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company a Takeover Proposal or its otherwise, except for Parent, Merger Sub or any of their respective Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereofAffiliates, or implement a rights plan, “poison pill” or similar arrangement, except as the transactions contemplated by this Agreement;
; or (r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(sm) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from From the date of this Agreement until the Effective Time, unless Parent shall otherwise consent in writing or except as expressly contemplated by this Agreement set forth in Section 5.01 of the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent, conduct its business otherwise expressly provided for in the ordinary course of business, and, to the extent consistent therewiththis Agreement, the Company shall, and shall cause each of its the Company Subsidiaries to, conduct its business in the ordinary course of business consistent with past practice and shall use its commercially reasonable efforts to preserve substantially intact its business organization and its Subsidiaries’ goodwill and relationships with customers, suppliers and others having business organization, dealings with it and to keep available the services of its and its Subsidiaries’ current officers and employeeskey employees on terms and conditions substantially comparable to those currently in effect and maintain its current rights and franchises, in each case, consistent with past practice. In addition to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 5.01 of the Company Disclosure Letter or as required by applicable Lawotherwise expressly provided for in this Agreement or the Exchange Agreement, from the Company shall not, nor shall it permit any of its Subsidiaries todate hereof until the Effective Time, without the prior written consent of Parent (which consent shall Parent, not to be unreasonably withheld or delayed):, the Company shall not and shall not permit any Company Subsidiary to:
(a) amend adopt or propose to amend any change in its certificate of incorporation or by-laws (bylaws or other comparable organizational documents);
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(ci) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock, property stock or otherwiseproperty) in respect of, or enter into of any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct declared, set aside, made or indirect paid by any Subsidiary wholly-owned Subsidiaries by the Company or another Subsidiary to the Company or such other direct Subsidiary), (ii) split, combine or indirect 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, or (iii) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company or any Company Subsidiary, or any other equity interests or any rights, warrants or options to acquire any such shares or interests, provided that nothing in this Section 5.01(b) shall prevent the Partnership from making or paying any dividend or distribution required to be made or paid pursuant to Section 4.1(a) of the Partnership Agreement;
(c) issue, sell, grant, pledge or otherwise encumber any shares of its capital stock or other securities (including any options, warrants or any similar security exercisable for or convertible into such capital stock or similar security) other than (i) pursuant to the exercise of existing grants of options under the Incentive Plan in accordance with their present terms, (ii) issuances by a wholly owned Company Subsidiary of capital stock to such Company Subsidiary’s parent or another wholly-owned Subsidiaries Company Subsidiary, (iii) delivery of capital stock upon the vesting of any Company Restricted Shares or Company Deferred Shares or (iv) matching grants under the Company)’s 401(k) plan in accordance with past practice;
(d) issue, sell, pledge, dispose merge or consolidate with any other Person or acquire an amount of assets or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise equity of any Company Stock Option outstanding under Company Stock Plans as other Person in excess of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement$5,000,000;
(e) sell, lease, license, subject to a Lien, other than a Permitted Lien, encumber or otherwise surrender, relinquish or dispose of any assets, property or rights (including capital stock of a Company Subsidiary) except as required by applicable Law or pursuant to Section 3.03, (i) increase pursuant to existing written contracts or commitments (the compensation terms of directors, officers or employees of which have been disclosed in writing to Parent prior to the Company or any of its Subsidiariesdate hereof), (ii) enter into any new or amend sales of network capacity in any material respectthe ordinary course, any existing employment, severance, retention or change in control agreement consistent with any of its past or present directors, officers or employeespractice, (iii) promote any officers or employees, except with respect to employees with a base salary sales of less than $60,000 as the result assets listed in Section 5.01(e) of the termination or resignation of any officer or employee, Company Disclosure Letter or (iv) establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Planin an amount not in excess of $5,000,000 in the aggregate;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(gi) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to to, or investments in in, any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, other Person other than (x) trade payables arising by the Company or any Company Subsidiary to or in the ordinary course of business, Company or any Company Subsidiary or (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, not to exceed $10,000 in each individual case, (ii) create, incur, guarantee or assume any Indebtedness, issuances of debt securities, guarantees, loans or advances, other than any of the foregoing created, incurred, guaranteed or assumed in an aggregate amount not exceeding the amount outstanding as of December 31, 2004 as reflected in the Company Financial Statements (and excluding any such Indebtedness incurred in the ordinary course of business consistent with past practice for working capital and cash management purposes under any revolving credit agreement in existence as of the date hereof), or (iii) make any capital expenditure other than (x) (together with capital expenditures made to date in fiscal year 2005) in an aggregate amount not to exceed $220 million through December 31, 2005 or (y) from and after January 1, 2006, in accordance with the budget of the Company and the Company Subsidiaries for such fiscal year, and in any event no more than $200 million in the aggregate for such fiscal year, and no more than $40 million in any calendar month and no more than $75 million in any calendar quarter;
(g) materially amend or otherwise materially modify benefits under any Company Benefit Plan, materially accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Benefit Plan as currently in effect on the date hereof, fail to make any required contribution to any Company Benefit Plan, merge or transfer any Company Benefit Plan or the assets or liabilities of any Company Benefit Plan, change the sponsor of any Company Benefit Plan, or terminate or establish any Company Benefit Plan, in each case excluding except as required by an existing agreement, plan or applicable Law;
(h) grant any transferincrease in the compensation or benefits of directors, licenseofficers, saleemployees, lease consultants, representatives or other disposition in connection with any transaction between or among agents of the Company and/or one or more any Company Subsidiary other than as required by any plan or arrangement in effect on the date hereof and payments and increases in the ordinary course of its wholly-owned Subsidiariesbusiness consistent with past practice (other than to directors and Senior Officers);
(i) enter into or amend or modify any change of control, severance, consulting, retention or employment agreement with any Senior Officer, or any change of control, severance, consulting, retention or employment plan, program or arrangement;
(j) hire or terminate the employment or contractual relationship of any officer or employee of the Company or any Company Subsidiary, as the case may be, other than hirings or terminations in the ordinary course of business consistent with past practice or that, individually and in the aggregate, would not result in (i) a material increase in the number of persons providing services to the Company and the Company Subsidiaries in all such capacities, (ii) in the case of hirings, a material increase in the aggregate payroll and other benefits costs to the Company or such Company Subsidiary (such increase to be determined, in the case of a hiring to replace an employee or other service provider in a pre-existing position based solely on the costs in excess of the costs associated with the replaced service provider), and (iii) in the case of terminations, material liability to the Company or any of its Subsidiaries in excess of the costs savings, if any, directly derived from such terminations;
(k) other than in the ordinary course of business consistent with past practice, settle or compromise any action, suit, claim, litigation, proceeding, arbitration, investigation, audit or controversy involving claims, liabilities or obligations in excess of $3 million or otherwise material to the Company and the Company Subsidiaries taken as a whole (each, a “Proceeding”), or enter into any consent, decree, injunction or similar restraint or form of equitable relief in settlement of any material Proceeding other than such settlements and compromises that relate to Taxes (which are the subject of Section 5.01(k)) or that, individually or in the aggregate, are not material to the Business or the Company and the Company Subsidiaries, taken as a whole;
(l) other than in the ordinary course of business, and except as are not, individually or in the aggregate, material to the Business or the Company and the Company Subsidiaries, taken as a whole, (i) make or rescind any material election relating to Taxes, (ii) settle or compromise any Proceeding relating to Taxes, (iii) make a request for a written ruling of a Taxing Authority relating to Taxes, other than any request for a determination concerning qualified status of any Company Benefit Plan intended to be qualified under Code Section 401(a), (iv) enter into a material written and legally binding agreement with a Taxing Authority relating to Taxes, or (v) except as required by Law, change 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 returns for the taxable year ending December 31, 2003;
(m) other than in the ordinary course of business consistent with past practice, (i) modify, amend or terminate any Company Contract, (ii) enter into any successor agreement to an expiring Company Contract that changes the terms of the expiring Company Contract in a way that is materially adverse to the Company or any Company Subsidiary, or (iii) modify, amend or enter into any new agreement that would have been considered a Company Contract if it were entered into at or prior to the date hereof;
(n) enter into or renew or extend any agreements or arrangements that limit or otherwise restrict the Company or any of the Company Subsidiaries or any of their respective Affiliates or any successor thereto, or that could, after the Effective Time, limit or restrict the Surviving Corporation or any of its Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area, which agreements or arrangements, individually or in the aggregate, would reasonably be expected to have a material adverse effect on the Business or the Company and the Company Subsidiaries, taken as a whole, after giving effect to the Merger;
(o) change any method of accounting or accounting principles or practices by the Company or any Company Subsidiary, except for any such change required by a change in GAAP;
(p) terminate, cancel, amend or modify any material insurance policies maintained by it covering the Company or the Company Subsidiaries or their respective properties which is not replaced by a comparable amount of insurance coverage;
(q) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 reorganization 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify take any actions or waive omit to take any material right under, actions that would or would be reasonably likely to (i) result in any Material Contract of the conditions to the consummation of the Merger set forth in Article VI not being satisfied or Permit, other than Contracts entered into with customers (ii) materially impair the ability of the Company or Parent to consummate the Merger in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent accordance with the terms hereof or materially delay such consummation;
(s) take any action that would be reasonably be expected to result in a material modification of the Company’s (and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in Subsidiaries’) rights under the ordinary course of business)Partnership Agreement; or
(st) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement until the Effective Timeearlier of the Closing or the termination of this Agreement in accordance with the terms set forth in Article 8 (the “Pre-Closing Period”), the Company shall, except as expressly contemplated by this Agreement or Agreement, as required by applicable Law law, or with the prior written consent of ParentPurchaser (which consent shall not be unreasonably withheld, conditioned, or delayed), conduct its business in the ordinary course of business, and, to business consistent with past practice. To the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees licensees, and other Persons having significant business relationships with it. Without limiting the generality of the foregoing, between during the date of this Agreement and the Effective TimePre-Closing Period, except as otherwise 36 expressly contemplated by this Agreement or Agreement, as set forth in Section 6.01 Part 4.1 of the Company Disclosure Letter Schedule, or as required by applicable Lawlaw, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent Purchaser (which consent shall not be unreasonably withheld withheld, conditioned, or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents)Charter Documents;
(b) (i) split, combine combine, or reclassifyreclassify any capital stock of the Company, (ii) repurchase, redeem redeem, or otherwise acquire, or offer to repurchase, redeem redeem, or otherwise acquire, any Company Securities capital stock of the Company, or Company Subsidiary Securities;
(ciii) declare, set aside aside, or pay any dividend or distribution (whether in cash, stock, property property, or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company)stock;
(dc) issue, sell, pledge, dispose of of, or encumber any Company Securities or Company Subsidiary Securitiescapital stock of the Company, other than (i) the issuance of shares of Company Common Stock upon the exercise of any stock or stock-related awards under any Company Stock Option Employee Plan outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(ed) except as required by applicable Law law or pursuant to Section 3.03, by any Company Employee Plan or Contract in effect as of the date of this Agreement (i) increase the compensation of payable or that could become payable by the Company to directors, officers officers, or employees, other than increases in compensation made to non-officer employees in the ordinary course of the Company or any of its Subsidiariesbusiness consistent with past practice, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except in connection with respect to employees with a base salary of less than $60,000 the Company’s annual or quarterly compensation review cycle or as the result of the termination or resignation of any officer or employee, or (iviii) establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any Company Employee PlansPlans or any plan, agreement, program, policy, trust, fund, or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this 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;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(ge) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances advances, or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(hf) (i) transfer, license, sell, lease lease, or otherwise dispose of any assets (whether by way of merger, consolidation, sale of stock or assets, or otherwise) or pledge, encumber, or otherwise subject to any lien (other than a Permitted Lien), any assets, including the capital stock or other equity interests in any Subsidiary of the Company; provided, other than in that the case foregoing shall not prohibit the Company from transferring, selling, leasing, or disposing of obsolete equipment or assets being replaced, or granting of non-exclusive licenses under the Company IP, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(iii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, or other reorganization;
(jg) repurchase, prepay, or incur any indebtedness Indebtedness for borrowed money or guarantee any such indebtedness Indebtedness of another Person, issue or sell any debt securities or options, warrants, calls calls, or other rights to acquire any debt securities of the Company or any of its SubsidiariesCompany, 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice practice; 37
(h) enter into or amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any material Contract of the Company or any Lease with respect to material Leased Real Property or any other Contract or Lease that, if in effect as of the date hereof would constitute a material Contract of the Company or a Lease with respect to material Leased Real Property hereunder, other than pursuant to an existing financing facility, except for intercompany loans non-exclusive licenses entered into in between or among the Company and/or any ordinary course of its wholly-owned Subsidiariesbusiness consistent with past practice;
(ki) institute anyinstitute, or settle settle, or compromise any pending or threatened, Legal Actions Proceeding involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 50,000 in the aggregate, other than (i) any Legal Action Proceeding brought against Parent Purchaser, Merger Sub I or Merger Sub II arising out of a breach or alleged breach of this Agreement by Parent Purchaser, Merger Sub I or Merger SubSub II, and (ii) the settlement of claims, liabilities, or obligations reserved against on the Balance Sheet; provided, that neither the Company nor any of its Subsidiaries shall not settle or agree to settle any Legal Action Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofCompany’s business;
(lj) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Lawlaw;
(mk) (i) settle or compromise any material Tax claim, audit, or assessment for an amount materially in excess of the amount reserved or accrued on the Balance Sheet, (ii) make or change any material Tax election, change any annual Tax accounting period, or adopt or change any method of Tax accounting, (iii) amend any material Tax Returns or file claims for material Tax refunds, or (iv) enter into any material closing agreement, surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company;
(l) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding understanding, or similar Contract with respect to any joint venture, strategic partnership partnership, or alliance;
(nm) authorizeexcept in connection with actions permitted by Section 4.3 hereof, take any action to exempt any Person from, or make any commitment with respect acquisition of securities of the Company by any Person not subject to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change state takeover statute or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim similar statute or assessment, surrender any right regulation that applies to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, Company with respect to Taxes;
(p) fail to maintain a proposed Alternative Transaction or otherwise, including the restrictions on “business combinations” set forth in full force and effect material insurance policies covering Section 203 of the Company DGCL, except for Purchaser, Merger Sub I, Merger Sub II or its any of their respective Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereofAffiliates, or implement a rights plan, “poison pill” or similar arrangement, except as the transactions contemplated by this Agreement;
(rn) enter intoabandon, terminateallow to lapse, modify sell, assign, transfer, grant any security interest in otherwise encumber or waive dispose of any material Company IP, or grant any right under, or license to any Material Contract or Permit, Company IP other than Contracts pursuant to non-exclusive licenses entered into with customers in the ordinary course of business consistent with past practice practice;
(it being understood thato) terminate or modify in any material respect, for or fail to exercise renewal rights with respect to, any material insurance policy;
(p) except to the purposes of this subsectionextent expressly permitted by Section 4.3 or Article 8, “consistent with past practice” shall not include entering into take any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) action that areis intended or that would reasonably be expected to, individually or in the aggregate, substantially inconsistent with prevent, materially delay, or materially impede the terms and conditions found in consummation of the Mergers, or the other Contracts of similar size and scope previously entered into transactions contemplated by the Company this Agreement; or any of its Subsidiaries in the ordinary course of business); or
(sq) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Merger Agreement (Instructure Inc)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except (a) Except as expressly contemplated by this Agreement (including with respect to the Reorganization), or as set forth on Schedule 6.1, from and after the date hereof until the earlier of the Closing or the termination of this Agreement in accordance with Article 8, except as consented to in writing by Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed) or as required by applicable Law or with law (including any Health and Safety Measures), (w) Blocker Corp and the prior written consent of ParentCompany shall, and the Company shall cause each other Group Company to, conduct its business in the ordinary course Ordinary Course of Business, (x) Blocker Corp and the Company shall, and the Company shall cause each other Group Company to, use commercially reasonable efforts to preserve intact (A) its business organization and to preserve the present commercial relationships with Persons with whom it has a material business relationship, and (B) its material assets owned, leased or used in the conduct of its business, and, to the extent consistent therewith, ; (y) the Company shall, and shall cause each of its Subsidiaries the Group Companies to, use its commercially reasonable efforts to preserve substantially intact its have and its Subsidiariesmaintain an aggregate amount of Store Cash as of immediately prior to the Closing of at least $250,000; provided, however, that notwithstanding anything to the contrary herein, but without derogation of, or limiting, the Group Companies’ business organizationobligations in the preceding provisions of this clause (y), to keep available and for the services avoidance of its and its Subsidiaries’ current officers and employeesdoubt, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting in no event shall the generality maintenance of the foregoing, between aggregate amount of Store Cash as of immediately prior to the date Closing of this Agreement at least $250,000 constitute a condition to Purchaser’s obligation to consummate the Closing; and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable Law, (z) Blocker Corp and the Company shall not, nor and the Company shall it permit cause each other Group Company not to:
(i) amend, waive or otherwise modify any provision of its Subsidiaries toGoverning Documents (whether by merger, without the prior written consent of Parent (which consent shall not be unreasonably withheld consolidation or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documentsotherwise);
(bii) make or declare any dividend or distribution in respect of its equity interests, except dividends and distributions by a Group Company (A) to any other Group Company or dividends or distributions solely in cash (other than Store Cash) from excess cash balances not needed for operations in the Ordinary Course of Business or (B) subject to Section 6.1(a)(iii), to distribute Cash and Cash Equivalents in excess of the Cash Cap;
(iii) transfer Store Cash out of the Stores, except in the Ordinary Course of Business; provided, that notwithstanding the foregoing, the Company shall use commercially reasonable efforts to not, and to cause each other Group Company not to, transfer, spend or otherwise utilize Store Cash if such transfer, expenditure or utilization would reasonably be expected to cause the aggregate amount of Store Cash as of immediately prior to the Closing to be less than $250,000; provided, however, that notwithstanding anything to the contrary herein, but without derogation of, or limiting, the Group Companies’ obligations in the preceding provisions of this clause (iii), and for the avoidance of doubt, in no event shall the maintenance of the aggregate amount of Store Cash as of immediately prior to the Closing of at least $250,000 constitute a condition to Purchaser’s obligation to consummate the Closing.
(iv) issue or sell, or authorize the issuance or sale of, any equity securities, securities convertible into, exchangeable for, or exercisable for equity securities, or any other rights to purchase any Group Company’s equity securities;
(v) split, combine combine, redeem or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem purchase or otherwise acquire, any Company Securities or Company Subsidiary Securitiesof its equity interests;
(cvi) declare, set aside or pay make any dividend or distribution (whether material change in cash, stock, property or otherwise) in respect of, or enter into any Contract the policies and practices of such Group Company with respect to the voting ofpayment of accounts payable or accrued expenses or the collection of the Accounts Receivable or other receivables, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries including with respect to the Company or other direct or indirect wholly-owned Subsidiaries of the Company)timing thereof;
(dvii) issuemake any material change in its cash management practices or in the financial or tax accounting methods, sellprinciples or practices used by such Group Company, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by law or GAAP, as applicable;
(viii) make, rescind or change any material Tax election, adopt or change any Tax accounting period or material Tax accounting method, enter into any closing agreement in respect of Taxes, agree to any extension or waiver of the statute of limitation period applicable Law to any Tax claim or assessment, settle any Tax claim or assessment, amend any material Tax Return, fail to timely file any material Tax Return required to be filed, fail to pay any material amount of Tax as it becomes due, surrender any right to claim a Tax refund, take any action to seek relief pursuant to Section 3.03any COVID-19 law, including, but not limited to, incurring any indebtedness pursuant to any COVID-19 law, seeking forgiveness for any such indebtedness or deferring any payroll, employment or similar Taxes;
(iix) sell, license, lease, transfer, assign, dedicate to the public domain, permit to lapse, grant any option or other right in, abandon or otherwise dispose of any of its material assets (including any Leased Real Property or Company Owned IP Rights), or mortgage, pledge, or impose any Lien (other than a Permitted Lien) upon any of its material assets (including any Leased Real Property or Company Owned IP Rights), in each case, other than in the Ordinary Course of Business;
(x) except as may be required by law or contract, or in the Ordinary Course of Business, increase the compensation or benefits of directorsany employee of such Group Company;
(xi) make any material change in the manner in which such Group Company extends discounts, officers rebates or employees of the Company credits to customers or to any of its Subsidiaries, loyalty or rewards program;
(iixii) enter into any new amend or amend modify in any material respect, renew or fail to renew, enter into or voluntarily terminate or rescind any existing employmentMaterial Contract, severanceFranchise Agreement, retention Multi-Unit Development Agreement or change Insurance Policy or exercise, waive, release or assign any material rights, claims or benefits under any Material Contract or Insurance Policy, in control agreement with any each case, except in the Ordinary Course of its past Business;
(xiii) other than as required by an Employee Benefit Plan set forth on Schedule 3.10(a), or present directors, officers or employeesas explicitly contemplated hereunder, (iiiA) promote accelerate the vesting or payment of any officers compensation or employeesbenefits of any employee or other individual service provider of any Group Company, except with respect (B) enter into, amend or terminate any Employee Benefit Plan (or any plan, program, agreement or arrangement that would be an Employee Benefit Plan if in effect on the date hereof) or grant, amend or terminate any awards thereunder, other than on account of changes in law, (C) fund any payments or benefits that are payable or to be provided under any Employee Benefit Plan, (D) terminate without “cause” any employee of any Group Company other than in the Ordinary Course of Business for employees with who are eligible to earn a base salary of less than $60,000 as 200,000, (E) promote or change the result title of, or hire or engage any new employee or other individual service provider of any Group Company other than in the Ordinary Course of Business (1) for any employee or other individual service provider at a level below vice present and who is eligible to earn a base compensation of less than $200,000 and (2) to the extent that following the promotions, changes in title or hiring of such employees or other service providers the compensation expense of the termination Group Companies would remain within the budgets of the Group Companies provided to the Purchaser, (F) make any loan to any present or resignation former employee or other individual service provider of any officer Group Company (other than advancement of expenses in the Ordinary Course of Business or employeeunder and in accordance with any qualified retirement plan), or (ivG) establish, adopt, enter into, amendamend or terminate any collective bargaining agreement or other agreement with a labor union, terminateworks council or similar organization (or enter into negotiations to do any of the foregoing); provided, exercise that for the avoidance of doubt the restrictions set forth in this Section 6.1(a)(xiii) shall not apply to sale, success, change of control or similar bonuses granted or agreed to be granted to employees of any discretion underGroup Company to the extent such bonuses would be included in the calculation of Seller Expenses; provided, or take any action to accelerate rights under any further, that the Company Employee Plans, or make any contribution to any Company Employee Planfirst provides Purchaser with at least two (2) Business Days’ prior written notice of such bonuses;
(fxiv) hire any officer (A) incur, assume, guarantee or employeeotherwise become liable or responsible for (whether directly, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, contingently or otherwise) any Funded Indebtedness in the Ordinary Course of Business in excess of $250,000, any business individually or Person or division thereof or in the aggregate, (B) make any loans, advances or capital contributions to to, or investments in, any Person (other than advances of travel expenses in the Ordinary Course of Business) in excess of $50,000 or (C) amend or modify any terms or contracts in respect of any Funded Indebtedness in any Personmaterial respect;
(xv) cancel or forgive any Funded Indebtedness in excess of $250,000 owed to Blocker Corp or any Group Company;
(xvi) enter into, renew, modify or revise any Company Affiliated Transaction or Seller Affiliated Transaction, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or termination of any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances such transaction pursuant to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessSection 6.27;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(ixvii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(jxviii) incur any indebtedness for borrowed money grant or guarantee any such indebtedness of another Person, issue otherwise create or sell any debt securities or options, warrants, calls or other rights consent 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 creation of any other Person Lien (other than a Permitted Lien) on any whollymaterial assets or any Leased Real Property;
(xix) waive, release, assign, settle or compromise any claim, action, or proceeding (whether civil, criminal, administrative or investigative) (A) involving payments in excess of $250,000 in any single instance or $250,000 in the aggregate or (B) which imposes any restrictions on the operations of Blocker Corp or any Group Company;
(xx) implement or announce any employee layoffs, plant closings, reductions in force, furloughs, temporary layoffs, salary or wage reductions, work schedule changes or other such actions that could implicate the Worker Adjustment and Retraining Notification Act of 1988, as amended, or any similar state or local law, rule or regulation;
(xxi) waive or release any non-owned Subsidiary competition, non-solicitation, non-disclosure, non-interference, non-disparagement or other restrictive covenant obligation of it) any current or former employee, independent contractor or other service provider or enter into any arrangement having agreement that restricts the economic effect ability of Blocker Corp or any Group Company, as applicable, to engage or compete in any line of the foregoingbusiness;
(xxii) purchase or otherwise acquire (by merger, consolidation, acquisition of stock or incur assets or otherwise), directly or indirectly, any Liens other than Permitted Liens in connection with the foregoingassets, securities, properties, interests or businesses, other than (A) inventory and supplies in the financing Ordinary Course of ordinary course trade payables consistent with past practice Business or pursuant (B) other assets in an amount not to an existing financing facility, except for intercompany loans entered into exceed $200,000 individually or $1,000,000 in between or among the Company and/or any of its wholly-owned Subsidiariesaggregate;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(mxxiii) enter into any material agreement, agreement in principle, letter new line of intent, memorandum business or exit any existing line of understanding or similar Contract with respect to any joint venture, strategic partnership or alliancebusiness;
(nxxiv) authorize(A) make or commit to make any capital expenditures in excess of $250,000, in each case except to the extent in accordance with any annual budget or similar strategic budgetary plan approved by the Board of Managers of PSP Holdings, or (B) fail to make any commitment capital expenditures in accordance with respect to, any capital expenditureannual budget or similar strategic budgetary plan approved by the Board of Managers of PSP Holdings, except as contemplated by for capital expenditures of less than $200,000, individually or in the Company’s existing fiscal year 2012 Capital Budgetaggregate;
(oxxv) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, (A) enter into any material closing agreementnew rent deferral arrangement in connection with any Real Property Lease, settle (B) modify or amend the terms of any material claim Existing Relief Arrangement or assessment, surrender (C) modify or amend the terms of any right rent concession arrangement or agreement existing as of the date hereof which would be reasonably likely to claim a material refund, offset result in any adverse impact or other reduction in Liability or consent increased expense to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business)Group Company; or
(sxxvi) agree agree, whether orally or commit in writing, to do any of the foregoing. .
(b) Notwithstanding anything to the contrary contained in this Agreement, at any time and from time to time prior to the Closing, the Group Companies shall be permitted (but not obligated) to take any actions that the Company reasonably believes in good faith is necessary for the Group Companies to (x) mitigate the adverse effects of COVID-19 on the business of the Group Companies, or (y) comply with any laws or orders of any Governmental Entity issued in response to COVID-19 (including any Health and Safety Measures) and any such action taken in accordance with this Section 6.1(b) shall in no event be deemed to result in a breach of Section 6.1(a); provided, that prior to taking any such measure or action, the Company shall reasonably consult in advance with Purchaser in good faith with respect to any such measure or action taken, keep Purchaser reasonably informed as to any such measure or action, provide Purchaser with reasonable advance written notice and a reasonable opportunity to review and comment on any resulting policies, procedures, and protocols, and consider in good faith any comments or suggestions by Purchaser, unless such consultation in advance is not practicable due to exigent circumstances, in which case the Company shall provide Purchaser with prompt written notice of such measures or actions taken.
(c) Nothing contained in this Agreement Section 6.1 shall be deemed to give ParentPurchaser, directly or indirectly, the right to control or direct Blocker Corp or the Company’s Company or its Subsidiaries’ any operations of Blocker Corp or any Group Company prior to the Effective Time. Prior Closing and prior to the Effective TimeClosing, Blocker Corp and the Company shall exercise, consistent with the terms and conditions hereof, control over the respective businesses and operations of Blocker Corp and the Group Companies; provided, that in each case, Blocker Corp and the Company shall, and shall cause the Group Companies to, comply with the provisions of clauses (a) and (b) of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsSection 6.1 prior to the Closing.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement until the Effective Timeearlier of the Closing or the termination of this Agreement in accordance with the terms set forth in Article 8 (the “Pre-Closing Period”), the Company shall, except as expressly contemplated by this Agreement or Agreement, as required by applicable Law law, or with the prior written consent of ParentPurchaser (which consent shall not be unreasonably withheld, conditioned, or delayed), conduct its business in the ordinary course of business, and, to business consistent with past practice. To the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees licensees, and other Persons having significant business relationships with it. Without limiting the generality of the foregoing, between during the date of this Agreement and the Effective TimePre-Closing Period, except as otherwise expressly contemplated by this Agreement or Agreement, as set forth in Section 6.01 Part 4.1 of the Company Disclosure Letter Schedule, or as required by applicable Lawlaw, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent Purchaser (which consent shall not be unreasonably withheld withheld, conditioned, or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents)Charter Documents;
(b) (i) split, combine combine, or reclassifyreclassify any capital stock of the Company, (ii) repurchase, redeem redeem, or otherwise acquire, or offer to repurchase, redeem redeem, or otherwise acquire, any Company Securities capital stock of the Company, or Company Subsidiary Securities;
(ciii) declare, set aside aside, or pay any dividend or distribution (whether in cash, stock, property property, or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company)stock;
(dc) issue, sell, pledge, dispose of of, or encumber any Company Securities or Company Subsidiary Securitiescapital stock of the Company, other than (i) the issuance of shares of Company Common Stock upon the exercise of any stock or stock-related awards under any Company Stock Option Employee Plan outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(ed) except as required by applicable Law law or pursuant to Section 3.03, by any Company Employee Plan or Contract in effect as of the date of this Agreement (i) increase the compensation of payable or that could become payable by the Company to directors, officers officers, or employees, other than increases in compensation made to non-officer employees in the ordinary course of the Company or any of its Subsidiariesbusiness consistent with past practice, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except in connection with respect to employees with a base salary of less than $60,000 the Company’s annual or quarterly compensation review cycle or as the result of the termination or resignation of any officer or employee, or (iviii) establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any Company Employee PlansPlans or any plan, agreement, program, policy, trust, fund, or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this 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;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(ge) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances advances, or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(hf) (i) transfer, license, sell, lease lease, or otherwise dispose of any assets (whether by way of merger, consolidation, sale of stock or assets, or otherwise) or pledge, encumber, or otherwise subject to any lien (other than a Permitted Lien), any assets, including the capital stock or other equity interests in any Subsidiary of the Company; provided, other than in that the case foregoing shall not prohibit the Company from transferring, selling, leasing, or disposing of obsolete equipment or assets being replaced, or granting of non-exclusive licenses under the Company IP, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(iii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, or other reorganization;
(jg) repurchase, prepay, or incur any indebtedness Indebtedness for borrowed money or guarantee any such indebtedness Indebtedness of another Person, issue or sell any debt securities or options, warrants, calls calls, or other rights to acquire any debt securities of the Company or any of its SubsidiariesCompany, 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice practice;
(h) enter into or amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any material Contract of the Company or any Lease with respect to material Leased Real Property or any other Contract or Lease that, if in effect as of the date hereof would constitute a material Contract of the Company or a Lease with respect to material Leased Real Property hereunder, other than pursuant to an existing financing facility, except for intercompany loans non-exclusive licenses entered into in between or among the Company and/or any ordinary course of its wholly-owned Subsidiariesbusiness consistent with past practice;
(ki) institute anyinstitute, or settle settle, or compromise any pending or threatened, Legal Actions Proceeding involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 50,000 in the aggregate, other than (i) any Legal Action Proceeding brought against Parent Purchaser or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent Purchaser or Merger Sub, and (ii) the settlement of claims, liabilities, or obligations reserved against on the Balance Sheet; provided, that neither the Company nor any of its Subsidiaries shall not settle or agree to settle any Legal Action Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofCompany’s business;
(lj) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Lawlaw;
(mk) (i) settle or compromise any material Tax claim, audit, or assessment for an amount materially in excess of the amount reserved or accrued on the Balance Sheet, (ii) make or change any material Tax election, change any annual Tax accounting period, or adopt or change any method of Tax accounting, (iii) amend any material Tax Returns or file claims for material Tax refunds, or (iv) enter into any material closing agreement, surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company;
(l) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding understanding, or similar Contract with respect to any joint venture, strategic partnership partnership, or alliance;
(nm) authorizeexcept in connection with actions permitted by Section 4.3 hereof, take any action to exempt any Person from, or make any commitment with respect acquisition of securities of the Company by any Person not subject to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change state takeover statute or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim similar statute or assessment, surrender any right regulation that applies to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, Company with respect to Taxes;
(p) fail to maintain a proposed Alternative Transaction or otherwise, including the restrictions on “business combinations” set forth in full force and effect material insurance policies covering Section 203 of the Company DGCL, except for Purchaser, Merger Sub or its any of their respective Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereofAffiliates, or implement a rights plan, “poison pill” or similar arrangement, except as the transactions contemplated by this Agreement;
(rn) enter intoabandon, terminateallow to lapse, modify sell, assign, transfer, grant any security interest in otherwise encumber or waive dispose of any material Company IP, or grant any right under, or license to any Material Contract or Permit, Company IP other than Contracts pursuant to non-exclusive licenses entered into with customers in the ordinary course of business consistent with past practice practice;
(it being understood thato) terminate or modify in any material respect, for or fail to exercise renewal rights with respect to, any material insurance policy;
(p) except to the purposes of this subsectionextent expressly permitted by Section 4.3 or Article 8, “consistent with past practice” shall not include entering into take any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) action that areis intended or that would reasonably be expected to, individually or in the aggregate, substantially inconsistent with prevent, materially delay, or materially impede the terms and conditions found in consummation of the Merger, or the other Contracts of similar size and scope previously entered into transactions contemplated by the Company or any of its Subsidiaries in the ordinary course of business)this Agreement; or
(sq) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Merger Agreement (Instructure Inc)
Conduct of Business of the Company. The Company shall, (a) From and shall cause each of its Subsidiaries to, during the period from after the date of this Agreement until the Effective Timeearlier of the Closing or the termination of this Agreement in accordance with its terms, the Company shall, and the Company shall cause its Subsidiaries to, except as expressly contemplated by this Agreement or any Ancillary Document, as required by applicable Law or with the prior written consent Law, as set forth on Section 5.1(a) of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewith, the Company shallDisclosure Schedules, and or as consented to in writing by SPAC (it being agreed that any request for a consent shall cause each of its Subsidiaries tonot be unreasonably withheld, conditioned or delayed), use its commercially reasonable efforts to (i) conduct and operate the business of the Group Companies in the ordinary course of business and in compliance with all applicable Laws, (ii) maintain and preserve substantially intact its and its Subsidiaries’ in all material respects the business organization, to assets, properties and material business relations of the Group Companies, taken as a whole, (iii) keep available the services of its and its Subsidiaries’ current the present officers and employees, to key employees of the Company and (iv) preserve its existing relations and its Subsidiaries’ present relationships goodwill of the Group Companies with customers, suppliers, distributors, licensors, licensees distributors and other Persons having business relationships with it. creditors of the Group Companies.
(b) Without limiting the generality of the foregoing, between from and after the date of this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with its terms, the Company shall, and the Effective TimeCompany shall cause its Subsidiaries to, except as otherwise expressly contemplated by this Agreement or any Ancillary Document, as required by applicable Law (including COVID-19 Measures), as set forth in on Section 6.01 5.1(b) of the Company Disclosure Letter Schedules or as required consented to in writing by applicable LawSPAC (such consent, the Company shall notnot to be unreasonably withheld, nor shall it permit conditioned or delayed), not do any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):following:
(ai) amend declare, set aside, make or propose to amend its certificate pay a dividend on, or make any other distribution or payment (whether in cash, stock or property) in respect of, any Equity Securities of incorporation any Group Company or by-laws (Merger Sub or other comparable organizational documents);
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any outstanding Equity Securities of any Group Company Securities or Company Subsidiary Securities;
(c) declareMerger Sub, other than dividends or distributions, declared, set aside or pay paid by any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to of the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Company’s Subsidiaries to the Company or any Subsidiary that is, directly or indirectly, wholly owned by the Company, and other direct than any dividends or indirect wholly-owned distributions required under the Governing Documents of any joint venture of any Subsidiaries of the Company);
(dii) issue(A) merge, sellconsolidate, pledgecombine or amalgamate any Group Company or Merger Sub with any Person or (B) purchase or otherwise acquire (whether by merging or consolidating with, dispose purchasing any Equity Security in or a substantial portion of the assets of, or encumber by any Company Securities other manner) any corporation, partnership, association or Company Subsidiary Securitiesother business entity or organization or division thereof, other than (isuch acquisitions and purchases set forth in Section 5.1(b)(ii) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date Company Disclosure Schedules that would not require financial statements of this Agreement the acquired business to be included in accordance with its terms, or (ii) in accordance with the Stockholder Rights AgreementRegistration Statement / Proxy Statement pursuant to Rule 3-05 of Regulation S-X under the Securities Act;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote adopt any officers amendments, supplements, restatements or employees, except with respect modifications to employees with a base salary of less than $60,000 as the result of the termination any Group Company’s or resignation of any officer or employee, or Merger Sub’s Governing Documents;
(iv) establish, adopt, enter into, amend, terminate, exercise any discretion under, form or take any action to accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or establish any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances other than in the ordinary course of business;
(hv) transfer, licenseissue, sell, lease grant or otherwise directly or indirectly dispose of, or subject to a Lien, (A) any Equity Securities of any assets Group Company or Merger Sub or (whether by way B) any options, warrants, rights of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock conversion or other equity interests in rights, agreements, arrangements or commitments obligating any Subsidiary Group Company or Merger Sub to issue, deliver or sell any Equity Securities of the any Group Company, other than (X) the issuance of Company Equity Awards pursuant to a Company Equity Plan or the issuance of shares of capital stock of the Company upon the exercise, settlement or conversion of any Company Equity Awards outstanding on the date of this Agreement in accordance with the case terms of obsolete equipment the applicable Company Equity Plan and the underlying grant, award or assets being replacedsimilar agreement, (Y) the issuance of Company Preferred C-1 Shares pursuant to the Series C-1 Preferred Share Purchase Agreement, dated October 1, 2020, as the Company may amend solely to provide for the issuance of an additional $15 million aggregate value of Series C-1 Preferred Shares and to amend the purchase price for the Company Preferred C-1 Shares in accordance with the Equity Value, or (Z) the issuance of performance warrants, with the terms and amounts and to the Persons as set forth on Section 5.1(b)(v) of the Company Disclosure Schedule;
(vi) incur, create or assume any Indebtedness in excess of $10,000,000, other than (x) ordinary course trade payables, (y) between the Company and any of its wholly owned Subsidiaries or between any of such wholly owned Subsidiaries or (z) in connection with borrowings, extensions of credit and other financial accommodations under the Company’s and Subsidiaries’ existing credit facilities, notes and other existing Indebtedness and, in each case case, any refinancings thereof;
(vii) make any loans, advances or capital contributions to, or guarantees for the benefit of, or any investments in, any Person, other than (A) intercompany loans or capital contributions between the Company and any of its wholly owned Subsidiaries, (B) the reimbursement of expenses of employees in the ordinary course of business, (C) advances in the ordinary course of business consistent to employees or officers of any Group Company not exceeding $500,000 in the aggregate, (D) prepayments and deposits paid to suppliers of any Group Company in the ordinary course of business, (E) trade credit extended to customers of the Group Companies in the ordinary course of business and (F) advances to wholly owned Subsidiaries of the Company;
(viii) except (x) as required under the terms of any Employee Benefit Plan of any Group Company that is set forth on the Section 3.11(a) of the Company Disclosure Schedules or any applicable Law, or (y) in the ordinary course of business (it being understood and agreed, for the avoidance of doubt, that in no event shall the exception in this clause (y) be deemed or construed as permitting any Group Company to take any action that is not permitted by any other provision of this Section 5.1(b)), (A) amend, modify, adopt, enter into or terminate any material Employee Benefit Plan of any Group Company or any material benefit or compensation plan, policy, program or Contract that would be an Employee Benefit Plan if in effect as of the date of this Agreement, (B) materially increase the compensation or benefits payable to, or pay any material special bonus or special remuneration to, any current or former director, manager, officer, employee, individual independent contractor or other service provider of any Group Company, (C) take any action to accelerate any payment, right to payment, or benefit, or the funding of any payment, right to payment or benefit, payable or to become payable to, or the vesting or period of exercisability of any Equity Award held by, or reprice any Equity Award held by, any current or former director, manager, officer, employee, individual independent contractor or other service provider of any Group Company, (D) waive or release any noncompetition, non-solicitation, no-hire, nondisclosure or other restrictive covenant obligation of any current or former director, manager, officer, employee, individual independent contractor or other service provider of any Group Company, (E) enter into any collective bargaining agreement or arrangement, (F) hire new executive officers, or (G) terminate the employment or engagement of any executive officer other than for cause;
(ix) make, change or revoke any election concerning Taxes (including, for the avoidance of doubt, making any U.S. federal income Tax entity classification election pursuant to Treasury Regulations Section 301.7701-3(c) with past practicerespect to the Company or any Company Subsidiary not contemplated by this Agreement), enter into any Tax closing agreement, settle any Tax claim or assessment, change its jurisdiction of Tax residence, or consent to any extension or waiver of the limitation period applicable to or relating to any Tax claim or assessment, in each case excluding case, if such action would be reasonably expected to materially increase the present or future Tax liability of SPAC or any transfer, license, sale, lease or other disposition in connection with any transaction between or among of the Company and/or one or more of its wholly-owned SubsidiariesGroup Companies;
(ix) adopt enter into any settlement, conciliation or effect similar Contract outside of the ordinary course of business the performance of which would involve the payment by the Group Companies in excess of $2,000,000, in the aggregate, or that imposes, or by its terms will impose at any point in the future, any material, non-monetary obligations on any Group Company (or SPAC or any of its Affiliates after the Closing);
(xi) authorize, recommend, propose or announce an intention to adopt, or otherwise effect, a plan of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, reorganization or other reorganizationsimilar transaction involving any Group Company;
(jxii) incur change any indebtedness for borrowed money or guarantee Group Company’s methods of accounting in any such indebtedness of another Personmaterial respect, 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, than changes that are made in accordance with PCAOB standards;
(xiii) enter into any “keep well” Contract with any broker, finder, investment banker or other Contract Person under which such Person is or will be entitled to maintain any financial statement condition of any brokerage fee, finders’ fee or other Person (other than any wholly-owned Subsidiary of it) or enter into any arrangement having the economic effect of any of the foregoing, or incur any Liens other than Permitted Liens commission in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as transactions contemplated by this Agreement;
(rxiv) except for entries, modifications, amendments, waivers, terminations or non-renewals in the ordinary course of business, enter into, terminatematerially modify, modify or materially amend, waive any material right under, terminate (excluding any Material expiration in accordance with its terms) or fail to renew, any Contract or Permit, other than Contracts entered into with customers in required to be disclosed on Section 3.19 of the ordinary course of business consistent with past practice Company Disclosure Schedules (it being understood thatexcluding, for the purposes avoidance of this subsectiondoubt, “consistent with past practice” shall not include entering into any expiration or automatic extension or renewal of any such Material Contract having terms and conditions pursuant to its terms);
(including terms and conditions regarding pricing and Liabilitiesxv) that areabandon, in the aggregatedispose of, substantially inconsistent with the terms and conditions found in allow to lapse, transfer, sell, assign, or exclusively license any material Company Intellectual Property to any Person or otherwise extend, amend, or modify any material Company Intellectual Property (other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries than development in the ordinary course of business);
(xvi) sell, lease, license, encumber or otherwise dispose of any properties or assets except for the sale, lease, license, or disposition in the ordinary course of business;
(xvii) close any facility or discontinue any material line of business or material business operations; or
(sxviii) agree enter into any Contract to take, or commit cause to do be taken, any of the foregoing. Nothing contained actions set forth in this Section 5.1.
(c) Notwithstanding anything in this Section 5.1 or this Agreement to the contrary, nothing set forth in this Agreement shall give ParentSPAC, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations of the Group Companies prior to the Effective Time. Prior Closing.
(d) Notwithstanding anything in this Section 5.1 or this Agreement to the Effective Timecontrary, nothing set forth in this Agreement shall prohibit the Company shall exercise, consistent from entering into additional subscription agreements for the sale and issuance of Company Ordinary Shares between the date of this Agreement and the Closing in connection with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsPIPE Financing.
Appears in 1 contract
Samples: Business Combination Agreement (Collective Growth Corp)
Conduct of Business of the Company. The Company shall, Except as set forth in Schedule 4.2 or as otherwise expressly permitted by this Agreement or as Parent may otherwise consent to or approve in writing on and shall cause each of its Subsidiaries toafter the date hereof and prior to the Closing Date, during the period from the date of this Agreement until to the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business Company shall operate in the ordinary course Ordinary Course of business, Business and in compliance with all applicable Laws and regulations and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ current business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, other key employees and to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other those Persons having business relationships dealings with itit to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Furthermore, the Company covenants, represents and warrants that from and after the date hereof, unless Parent shall otherwise expressly consent in writing, the Company shall use its reasonable best efforts to: (i) keep in full force and effect insurance comparable in amount and scope of coverage to insurance now carried by the Company; and (ii) pay all accounts payable and other obligations, when they become due and payable, in the Ordinary Course of Business consistent with the past practices of the Company and the provisions of this Agreement, except if the same are contested in good faith, and, in the case of the failure to pay any material accounts payable or other obligations which are contested in good faith, only after consultation with Parent. Without limiting the generality of the foregoingforegoing (but subject to the above exceptions), between during the period from the date of this Agreement and to the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed)::
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(ci) declare, set aside or pay any dividend dividends on, or distribution (whether in cash, stock, property or otherwise) make any other distributions in respect of, any of its capital stock or enter into other ownership interests, (ii) split, combine or reclassify any Contract with of its capital stock or other ownership interests or issue or authorize the issuance of any other securities in respect to the voting of, in lieu of or in substitution for shares of its capital stock or other ownership interests, (iii) purchase, redeem or otherwise acquire any shares of capital stock or other ownership interests of the Company or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities or (iv) make any other actual, constructive or deemed distribution in respect of any shares of capital stock or other ownership interests of the Company or otherwise make any payments to any holder of the Company's securities in their capacity as such;
(b) issue, deliver, sell, pledge or otherwise encumber or subject to any Lien any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries ownership interests of the Company), any Company Stock Rights or any other voting securities or any securities convertible into any such shares, voting securities or convertible securities;
(c) amend the Company's Certificate of Incorporation or Bylaws or similar governing documents;
(d) issueacquire or agree to acquire by merging or consolidating with, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as by purchasing a substantial portion of the date of this Agreement in accordance with its termsstock or assets of, or (ii) in accordance with the Stockholder Rights Agreementby any other manner, any business or any Person;
(e) except as required by applicable Law sell, lease, license, mortgage or pursuant otherwise encumber or subject to Section 3.03any Lien or otherwise dispose of, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any assets (whether by way of merger, consolidation, sale of stock or assets, or otherwiseincluding securitizations), including the capital stock or other equity interests in any Subsidiary of the Company, other than in the case Ordinary Course of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned SubsidiariesBusiness;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(s) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Merger Agreement (Tekelec)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement until to the earlier to occur of (x) the date of the termination of this Agreement in accordance with its terms and (y) the Effective Time, except (i) as set forth in Section 5.01 of the Disclosure Schedule, (ii) as expressly contemplated by this Agreement or Agreement, (iii) as required by applicable Law or with the prior written a Governmental Authority, or (iv) as consented to in writing by Parent (such consent of Parentnot to be unreasonably withheld, conduct its business in the ordinary course of business, and, to the extent consistent therewithconditioned or delayed), the Company shall, and shall cause each of its Subsidiaries to, (A) conduct its business in all material respects in the ordinary course of business and, to the extent consistent therewith, use its commercially reasonable efforts to preserve substantially intact its current business organization and maintain relationships with Governmental Authorities, its significant customers, suppliers and distributors and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having with which it has significant business relationships relations and (B) reasonably consult with itParent regarding any material changes in the Company’s strategy. Without In addition to and without limiting the generality of the foregoing, between during the period from the date of this Agreement to the earlier to occur of (x) the date of the termination of this Agreement in accordance with its terms and (y) the Effective Time, except as otherwise expressly contemplated by this Agreement or (i) as set forth in Section 6.01 5.01 of the Company Disclosure Letter or Schedule, (ii) as expressly contemplated by this Agreement, (iii) as required by applicable LawLaw or a Governmental Authority, or (iv) as consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall not, nor and shall it permit cause its Subsidiaries not to, take any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):following actions:
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(bi) split, combine or reclassifyreclassify any shares of its capital stock, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(cii) declare, set aside or pay any dividend or make any other distribution (whether in cash, stock, property or otherwiseany combination thereof) in respect of, or enter into any Contract with respect to the voting of, of any shares of its capital stock or other securities (other than dividends or distributions from by any of its direct or indirect wholly-owned Subsidiaries Subsidiaries), or (iii) redeem, repurchase, cancel, or otherwise acquire or offer to redeem, repurchase or otherwise acquire, directly or indirectly, any of its securities or any securities of any of its Subsidiaries, except for redemptions, repurchases, cancellations or other acquisitions (A) required (or permitted in connection with any net share settlement or Tax withholding) by the terms of the Company Equity Plan or any award agreement thereunder or (B) required by the terms of any other plans, arrangements or Contracts existing on the date hereof, as set forth in Section 5.01(a) of the Disclosure Schedule, between the Company or other direct any of its Subsidiaries, on the one hand, and any director, employee or indirect wholly-owned Subsidiaries equityholder of the Company)Company or any of its Subsidiaries, on the other hand;
(db) issue, sell, pledge, grant, transfer, dispose of of, enter into any Contract with respect to, or encumber any Company Securities shares of its capital stock or Company Subsidiary Securitiesother equity interests or securities exercisable or convertible into, or exchangeable or redeemable for, any such shares or other than equity interests, or any rights, warrants, options, calls, or commitments to acquire any such shares or other equity interests, except for (i) issuances or sales of any of the issuance foregoing to the Company or any wholly-owned Subsidiary of the Company and (ii) issuances of shares of Company Common Stock upon the exercise of any Company Stock Option Options or upon the vesting of Restricted Shares, in each case as outstanding under on the date hereof in accordance with Section 2.07(d)(iv);
(c) voluntarily adopt or publicly propose a plan of merger, consolidation, complete or partial liquidation or dissolution of the Company Stock Plans or any of its Subsidiaries or otherwise enter into any agreements or arrangements imposing changes or restrictions on its assets, operations or businesses that are material to the Company and its Subsidiaries taken as a whole;
(d) amend its Organizational Documents;
(e) acquire or dispose (directly or indirectly, by merger, consolidation or acquisition or disposition of stock or other equity interests or of assets) of any Person or any business or division thereof;
(f) incur, assume or guarantee any Indebtedness;
(g) make any loans or advances to any Person, other than loans or advances (i) by the Company to any of its wholly-owned Subsidiaries, or by any of the Company’s wholly-owned Subsidiaries to another wholly-owned Subsidiary of the Company, (ii) advances to customers made in the ordinary course of business consistent with past practice, or (iii) required by any Contract or other legal obligation of the Company or any of its Subsidiaries in existence as of the date of this Agreement as set forth in accordance with its termsSection 5.01(g) of the Disclosure Schedule;
(h) acquire, transfer, assign, divest, sell, lease, license, permit or suffer to exist the creation of any Lien upon, or otherwise dispose of any Subsidiary or any material amount of assets, securities or property (iiincluding Owned Intellectual Property) except as permitted pursuant to Contracts existing as of the date hereof as set forth on Section 5.01(h) of the Disclosure Schedule;
(i) abandon or allow any material Owned Intellectual Property to lapse or expire;
(j) settle any Action against the Company or any of its Subsidiaries (other than Actions arising in connection with this Agreement or the transactions contemplated hereby, which are governed by Section 5.11), other than settlements of Actions where the amount paid by the Company or any of its Subsidiaries (less the amount reserved for such matters by the Company and less the amount of any insurance recoveries) in settlement does not exceed $100,000 individually or $300,000 in the aggregate and that would not result in the imposition of any writ, judgment, decree, settlement, award, injunction or similar order of any Governmental Authority that would restrict the future activity or conduct of the Company or any of its Subsidiaries or a finding or admission of a violation of Law or violation of the rights of any Person;
(k) materially change its accounting or Tax reporting methods, principles or policies, except as may be required by Law or GAAP;
(l) make, change or revoke any material Tax election, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any material Tax claim, audit, assessment or dispute, surrender any right to claim a refund of a material amount of Taxes, take any action which is reasonably likely to result in a material increase in the Tax liability of the Company or its Subsidiaries, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent or its Affiliates;
(m) make or authorize any capital expenditure, other than capital expenditures that are not, individually, in excess of $75,000 or, in the aggregate for the Company and its Subsidiaries taken as a whole, in excess of $300,000;
(n) assign, transfer, lease, cancel, fail to renew or fail to extend any Permit issued by the FCC or any other Governmental Authority or discontinue any operations that require prior regulatory approval for discontinuance;
(o) enter into any line of business in any geographic area other than the lines of business of the Company and its Subsidiaries as of the date hereof;
(p) enter into any contract that would have been a Material Contract or Real Property Lease had it been entered into prior to this Agreement, or amend, modify or terminate any Material Contract or Real Property Lease in any material respect, other than expirations of any such Material Contract in the ordinary course of business in accordance with the Stockholder Rights Agreementterms of such Contract, or cancel, modify or waive any material matured debts or material claims held by it or waive any material rights under any Material Contract or Real Property Lease;
(eq) except other than as required by applicable Law any Contract or pursuant to Section 3.03Benefit Plan in existence as of the date of this Agreement, (i) increase the amount of compensation or benefits payable to any employee, officer, individual independent contractor or director of the Company or any of its Subsidiaries, including as a result of making any promotion, changing job titles or reclassifying any employee, officer, individual independent contractor or director of the Company or any of its Subsidiaries, other than annual increases in employees’ wage or salary, in the ordinary course of business, consistent with past practice, with respect to any employee whose annual compensation is not in excess of $100,000 and which increases do not exceed 5% for any individual employee or 3% for all employees of the Company and its Subsidiaries, (ii) grant any rights to 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 of its Subsidiaries, (iii) take any action to amend or waive any vesting criteria or accelerate vesting, exercisability or funding under any Benefit Plan or award granted thereunder, (iv) grant any new awards, or amend or modify the terms of any outstanding awards, under any Benefit Plan, (v) forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business) to any employee of the Company or its Subsidiaries, (vi) hire any employee or engage any independent contractor (who is a natural person) with an annual salary or wage rate or consulting fees in excess of $100,000 individually, (vii) terminate the employment of any officer other than for cause; (viii) become a party to, establish, adopt, terminate or amend in any material respect any Benefit Plan or any arrangement that would have been a Benefit Plan has it been entered into prior to this Agreement; or (ix) become a party to any consulting Contract, other than any such Contract that can be terminated on thirty (30) days’ or fewer notice and without payment of a penalty;
(r) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization;
(s) make any written or oral communications to the directors, officers or employees of the Company or any of its Subsidiaries, (ii) enter into any new Subsidiaries addressing how existing compensation or amend in any material respect, any existing employment, severance, retention benefit matters will or change in control agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect may be affected by the transactions contemplated by this Agreement prior to employees providing Parent with a base salary of less than $60,000 as the result copy of the termination or resignation intended communication; provided, that Parent shall have a reasonable period of time to review and comment on the communication, and the Company shall consider any officer or employeesuch comments in good faith; or
(t) authorize any of, or (iv) establish, adopt, enter into, amend, terminate, exercise any discretion under, commit or agree to take any action to accelerate rights under any Company Employee Plansof, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 foregoing actions. Notwithstanding the foregoing, nothing in this Section 5.01 is intended to or incur any Liens other than Permitted Liens shall result in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than any Legal Action brought against ceding control to Parent or Merger Sub arising out of a breach the Company’s or alleged breach of this Agreement by Parent or Merger Sub; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the Subsidiaries’ basic ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(s) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations commercial decisions prior to the Effective Time. Prior , and prior to the Effective TimeClosing Date, the Company and its Subsidiaries shall exercise, consistent with and subject to the terms and conditions of this Agreement, complete control and supervision over its their operations. The Company and its Subsidiaries’ operationsSubsidiaries shall consult with Parent regarding any potential settlement or other action that would or would reasonably be expected to change the regulatory status of the Company or any of its Subsidiaries under the Communications Act and shall give good faith consideration to any concerns raised by Parent with respect thereto.
Appears in 1 contract
Conduct of Business of the Company. The Company shall(a) Except (i) as contemplated by this Agreement; (ii) for actions approved by the Buyer in writing (which approval shall not be unreasonably withheld, and shall cause each conditioned or delayed); (iii) as required by applicable Law or any Governmental Order; (iv) in connection with necessary repairs due to breakdown or casualty, or other actions taken in response to a business emergency or other unforeseen operational matters; or (v) as set forth on Section 7.1 of its Subsidiaries tothe Seller Disclosure Schedules, during the period from the date of this Agreement until to the Effective TimeClosing Date, except the Seller shall cause the Company to operate and maintain its business according to its ordinary and usual course of business consistent with Good Utility Practice, unless the Buyer and the Seller shall agree otherwise.
(b) Except (i) as expressly contemplated by this Agreement Agreement; (ii) for actions approved by the Buyer in writing (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 prior written consent of Parent, conduct its necessary repairs due to breakdown or casualty or other actions taken in response to a business in the ordinary course of business, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and emergency or other Persons having business relationships with it. Without limiting the generality unforeseen operational matters; or (v) as set forth on Section 7.1 of the foregoing, between Seller Disclosure Schedules during the period from the date of this Agreement and to the Effective TimeClosing Date, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Seller shall cause the Company Disclosure Letter or as required by applicable Lawnot to (and, the Company shall notwith respect to Corporate Employees, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayedand shall cause its Affiliates not to):
(ai) (A) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
, other than amendments which are ministerial in nature or otherwise immaterial; (bB) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
reclassify its outstanding Shares; (cC) declare, set aside or pay any dividend distribution payable in stock or distribution (whether in cash, stock, property or otherwise) in respect ofof any Shares; or (D) repurchase, redeem or otherwise acquire any of its Shares, or enter any securities convertible into or exchangeable or exercisable for any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company)such Shares;
(dii) issue, sell, pledge, encumber or dispose of any Shares or other equity interest in the Company or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any Shares or other equity interest in the Company;
(iii) incur any Indebtedness except for Indebtedness under the Money Pool Agreement;
(iv) (A) except as permitted under Section 7.1(b)(viii), make any acquisition of, or investment in, the assets of any other Person, other than in an amount not to exceed $500,000 in the aggregate or (B) acquire the stock of or other equity interest in, or substantially all of the assets of, or merge with, any other Person;
(v) sell, lease, license, encumber or otherwise dispose of any Company Securities or Company Subsidiary Securitiesof its assets, other than (iA) in an amount not to exceed $500,000 in the issuance aggregate; (B) any assets that are in a state of shares of obsolescence; or (C) pursuant to and as required by Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of Agreements that are in effect on the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreementhereof;
(evi) except as required by applicable Law or pursuant to Section 3.03terminate, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 as the result of the termination or resignation of any officer or employee, or (iv) establish, adopt, enter into, amendmake any new grants or awards of equity-based compensation or other benefits under, terminateamend or otherwise materially modify any Benefit Plan or increase the salary, exercise wage, bonus or other compensation of any discretion Company Employee or Corporate Employee except (A) for grants or awards under any existing Benefit Plan in such amounts and on such terms as are consistent with past practice or (B) for actions necessary to satisfy existing contractual obligations under any Benefit Plan or Collective Bargaining Agreement existing as of the date hereof or to comply with applicable Law;
(vii) change any material financial or Tax accounting methods, policies, practices or positions, make or change any material Tax elections, or write-down or otherwise recognize any impairment of any assets of the Company used in the calculation of the Company’s rate base, except as required by GAAP, applicable FERC accounting standards, or applicable Law; or settle any audit or other proceeding relating to Taxes of the Company that could reasonably be expected to have a significant adverse effect on the Company following Closing;
(viii) make any capital expenditures, other than (A) the capital expenditures set forth on Section 7.1(b)(viii) of the Seller Disclosure Schedules; (B) any other capital expenditure consistent with Good Utility Practices, which expenditures shall not exceed $2,000,000 in the aggregate per year; or (C) any unscheduled capital expenditures that are required in order to comply with an applicable Law or regulatory requirement;
(ix) (A) assign, relinquish any material rights under, or take amend in any action to accelerate rights under material respect any of the Company Employee PlansAgreements, or make (B) enter into any contribution agreement that would be required to any Company Employee Plan;
(fbe set forth on Section 5.11(a) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 CompanySeller Disclosure Schedules other than, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transferpower and commodity supply, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiariestransmission and transportation agreements and capital expenditure obligations permitted by Section 7.1(b)(viii);
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(rx) enter into, terminate, modify adopt or waive amend in any material right underrespect any employment, retention, change of control, severance or termination pay agreement, plan or arrangement for any Material Contract Company Employee or PermitCorporate Employee, other than Contracts entered into with customers in retention agreements the ordinary course cost of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into which will be paid solely by the Company or any of its Subsidiaries in Seller (and not by the ordinary course of businessCompany); or
(sxi) agree enter into any contract, agreement, commitment or commit arrangement, whether written or oral, with respect to do any of the foregoing. Nothing contained transactions set forth in this Agreement the foregoing paragraphs (i) through (x).
(c) At Closing (i) the Capital Expenditure Amount shall give Parentbe at least equal to the sum of (A) $8,600,000.00 (“FY2011 Capital Expenditure Amount”) and (B) the product of (1) $25,753.43 and (2) the number of days which shall have elapsed between April 1, directly or indirectly2011 and the Closing Date (together with the FY2011 Capital Expenditure Amount, the right “Target Capital Expenditure Amount”) and (ii) the Regulatory Asset Amount shall be at least equal to control or direct $3,880,336.00 (the Company’s or its Subsidiaries’ operations prior to the Effective Time“Target Regulatory Asset Amount”). Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions Notwithstanding any other provision of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsthe parties agree that any failure of the Seller or the Company to satisfy the foregoing shall be cured for all purposes (including Section 8.2(a)) by an equitable adjustment to the Purchase Price at Closing in accordance with Article III.
Appears in 1 contract
Samples: Stock Purchase Agreement (Algonquin Power & Utilities Corp.)
Conduct of Business of the Company. The Except as set forth on Section 5.1 of the Company shall, Disclosure Schedules and shall cause each as contemplated in the budget to be attached to the Line of its Subsidiaries toCredit, during the period from the date of this Agreement until the Effective Time, the Company shall, and shall cause each of its Subsidiaries, except as expressly contemplated by this Agreement or Agreement, as required by applicable Law Law, or with the prior written consent of ParentParent (which consent shall not be unreasonably withheld, conditioned, or delayed), to conduct its business in the ordinary course of business, and, to business consistent with past practice. To the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees licensees, and other Persons having business relationships with itit or its Subsidiaries. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or Agreement, as set forth in Section 6.01 5.1 of the Company Disclosure Letter Schedules, as contemplated by the budget to be attached to the Line of Credit, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld withheld, conditioned, or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents)Charter Documents;
(b) (i) split, combine combine, or reclassifyreclassify any Company Stock or Company Subsidiary Securities, (ii) repurchase, redeem redeem, or otherwise acquire, or offer to repurchase, redeem redeem, or otherwise acquire, any Company Securities Stock or Company Subsidiary Securities;
, or (ciii) declare, set aside aside, or pay any dividend or distribution (whether in cash, stock, property property, or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the CompanySubsidiaries);
(dc) issue, sell, pledge, dispose of of, or encumber any Company Securities Stock or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(ed) except as required by applicable Law or pursuant to Section 3.03, by any Company Benefit Plan or Contract in effect as of the date of this Agreement (i) increase the compensation of directors, officers payable or employees of that could become payable by the Company or any of its SubsidiariesSubsidiaries to directors, officers, or employees, other than increases in compensation made to non-officer employees in the ordinary course of business consistent with past practice, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except in connection with respect to employees with a base salary of less than $60,000 the Company’s annual or quarterly compensation review cycle or as the result of the termination or resignation of any officer or employee, or (iviii) establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any Company Employee PlansBenefit Plans or any plan, agreement, program, policy, trust, fund, or other arrangement that would be a Company Benefit Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Benefit Plan, other than contributions required by Law, the terms of such Company Benefit Plans as in effect on the date hereof, or that are made in the ordinary course of business consistent with past practice;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(ge) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances advances, or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into Person in between or among the Company and/or any excess of its wholly-owned Subsidiaries, (x) trade payables arising $10,000 in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessaggregate;
(hi) transfer, license, sell, lease lease, or otherwise dispose of any assets (whether by way of merger, consolidation, sale of stock or assets, or otherwise) or pledge, encumber, or otherwise subject to any Encumbrances (other than a Permitted Encumbrance), any assets, including the capital stock or other equity interests in any Subsidiary of the Company; provided, other than in that the case foregoing shall not prohibit the Company and its Subsidiaries from transferring, selling, leasing, or disposing of obsolete equipment or assets being replaced, or granting of non-exclusive licenses under the Company IP, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(iii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, or other reorganization;
(jg) 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 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiariespractice;
(kh) institute anyenter into or amend or modify in any material respect, or settle consent to the termination of (other than at its stated expiry date), any Material Contract or any Lease with respect to material Real Estate or any other Contract or Lease that, if in effect as of the date hereof would constitute a Material Contract or Lease with respect to material Real Estate hereunder;
(i) institute, settle, or compromise any pending or threatened, Legal Actions Action involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 10,000 in the aggregate, other than (i) 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 (ii) the settlement of claims, liabilities, or obligations reserved against on the Interim Balance Sheet; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofCompany’s business;
(lj) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(mk) (i) settle or compromise any material Tax claim, audit, or assessment, (ii) make or change any material Tax election, change any annual Tax accounting period, or adopt or change any method of Tax accounting, (iii) amend any material Tax Returns or file claims for material Tax refunds, or (iv) enter into any closing agreement, surrender in writing any right to claim a Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or its Subsidiaries;
(l) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding understanding, or similar Contract with respect to any joint venture, strategic partnership partnership, or alliance;
(nm) authorizetake any action to exempt any Person from, or make any commitment with respect acquisition of securities of the Company by any Person not subject to, any capital expenditure, except as contemplated by state takeover statute or similar statute or regulation that applies to the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, Company with respect to Taxes;
(p) fail to maintain an Acquisition Proposal or otherwise, including the restrictions on “business combinations” set forth in full force and effect material insurance policies covering Section 203 of the Company or its Subsidiaries and its or their propertiesDGCL, assets and businesses in a form and amount consistent with past practice;
(q) adoptexcept for Parent, modify from the form existing on the date hereofMerger Sub, or implement a rights planany of their respective Subsidiaries or Affiliates, “poison pill” or similar arrangement, except as the transactions contemplated by this Agreement;
(rn) enter intoabandon, terminateallow to lapse, modify sell, assign, transfer, grant any security interest in otherwise encumber or waive dispose of any material Company IP, or grant any right under, or license to any Material Contract or Permit, Company IP other than Contracts pursuant to non-exclusive licenses entered into with customers in the ordinary course of business consistent with past practice practice;
(it being understood thato) terminate or modify in any material respect, for or fail to exercise renewal rights with respect to, any material insurance policy;
(p) except to the purposes of this subsectionextent expressly permitted by Section 5.4 or Article VIII, “consistent with past practice” shall not include entering into take any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) action that areis intended or that would reasonably be expected to, individually or in the aggregate, substantially inconsistent with prevent, materially delay, or materially impede the terms and conditions found in consummation of the Merger, or the other Contracts of similar size and scope previously entered into transactions contemplated by the Company or any of its Subsidiaries in the ordinary course of business)this Agreement; or
(sq) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or Agreement, as required by applicable Law or with the prior written consent of ParentParent (which consent shall not be unreasonably withheld or delayed), conduct its business in the ordinary course of businessbusiness consistent with past practice, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in on Section 6.01 5.01 of the Company Disclosure Letter Schedule or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (Parent, which consent shall not be unreasonably withheld or delayed)::
(a) amend or propose to amend or otherwise change its certificate of incorporation or by-laws (or other comparable organizational documents);
(b) (i) split, subdivide, combine or reclassifyreclassify any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
, (ciii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries a Company Subsidiary to the Company or other direct or indirect wholly-owned Subsidiaries of the Company);
(dc) issue, deliver, grant, sell, pledge, transfer, dispose of or encumber encumber, or authorize, propose or agree to the issuance, delivery, grant, sale, pledge, transfer, disposition or encumbrance of, any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock Shares upon the exercise of any Company Stock Option Options outstanding under Company Stock Plans as of the date of this Agreement in accordance with its their terms, or (ii) in accordance with the Stockholder Rights Agreement;
(ed) except as required by applicable Law any Company Employee Plan or pursuant to Section 3.03Contract in effect as of the date of this Agreement, (i) increase the compensation of payable or that could become payable by the Company or any Company Subsidiary to directors, officers or employees employees, other than increases in compensation made in the ordinary course of the Company or any of its Subsidiariesbusiness consistent with past practice, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except in connection with respect to employees with a base salary of less than $60,000 the Company’s annual or quarterly compensation review cycle or 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 accelerate rights under any Company Employee PlansPlans or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this 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;
(fe) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
acquire (g) acquire, including by merger, consolidation, liquidation, or acquisition of stock assets or assets, or otherwise, Equity Interest) any business or Person or division thereof any material portion of the assets of any Person or business thereof, or make any loansloan, advances advance or capital contributions to contribution to, or investments in investment in, any Person, Person or any business thereof;
(i) except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of businessbusiness consistent with past practices, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease lease, abandon, assign or otherwise dispose of any assets material entity, business, assets, rights or properties of the Company or any Company Subsidiary (whether by way of merger, consolidation, sale of stock equity securities or assets, or otherwise), including the Owned Company IP and the capital stock or other equity interests in any Subsidiary of the CompanyCompany Subsidiary, other than in the case of obsolete equipment or assets being replaced(ii) adopt, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt enter into or effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(jg) redeem, repurchase, prepay, defease, cancel, incur or otherwise acquire, or modify the terms of, any indebtedness for borrowed money or assume, guarantee or endorse, or otherwise become responsible for, 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 SubsidiariesCompany Subsidiary, assume, guarantee or endorse, or otherwise become responsible for, 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 itCompany Subsidiary) or enter into any arrangement having the economic effect of any of the foregoing, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiariespractice;
(kh) institute any(i) enter into or amend or modify in any material respect, or terminate or consent to the termination of (other than at its stated expiry date), any agreement to or otherwise obtain any real property, any Company Material Contract, Company IP Agreement or any Lease with respect to material Real Estate or any other Contract or Lease that, if in effect as of the date hereof, would constitute a Company Material Contract, Company IP Agreement or Lease with respect to material Real Estate hereunder, or (ii) waive any material default under, or release, settle or compromise any material claim against the Company or any Company Subsidiary or liability or obligation owing to the Company under any Company Material Contract or Company IP Agreement;
(i) institute, waive, settle or compromise any Legal Actions pending or threatenedthreatened before any arbitrator, Legal Actions court or other Authority involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries Company Subsidiary of any amount exceeding $25,000 individually or $100,000 400,000 in the aggregate, other than (i) 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 (ii) the settlement of claims, liabilities or obligations to the extent expressly reserved against and in an aggregate amount with respect thereto not to exceed the amount set forth on the most recent balance sheet of the Company included in the Recent SEC Reports; provided, provided that neither the Company nor any of its Subsidiaries Company Subsidiary shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company Company’s or any Affiliate thereofCompany Subsidiary’s business or operations;
(lj) make any material change in any method of financial accounting principles or principles, practices, policies, procedures or methods, in each case except for any such change required by a change in GAAP or applicable LawGAAP;
(mk) (i) settle or compromise any material Tax claim, audit or assessment, (ii) make or change any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, (iii) amend any material Tax Returns or file claims for material Tax refunds, or (iv) enter into any material closing agreement, surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or its Subsidiaries;
(l) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(m) implement any employee layoff that could implicate the WARN Act;
(n) except in connection with actions permitted by Section 5.03 hereof, take any action to exempt any Person from, or make any acquisition of securities of the Company by any Person not subject to, any state takeover statute or similar statute or regulation that would apply to Company with respect to an Acquisition Proposal or like transaction, including the restrictions on “business combinations” set forth in Section 203 of the DGCL, except for Parent, Merger Sub or any of their respective Subsidiaries or Affiliates, or the transactions contemplated by this Agreement;
(o) grant any Lien on any of its assets, other than Permitted Liens;
(p) authorize, or make any commitment with respect to, any single capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change expenditure in excess of $200,000 or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering capital expenditures for the Company or its Subsidiaries and its or their properties, assets and businesses each Company Subsidiary in a form and amount consistent with past practiceexcess of $500,000 in the aggregate;
(q) adopt, modify from the form enter into any new line of business outside of its existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreementbusiness segments;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into communicate in writing with customers in the ordinary course employees of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any Company Subsidiary regarding the compensation, benefits or other treatment that they will receive in connection with the Merger, unless any such communications are consistent with prior directives or documentation provided to the Company by Parent (in which case, the Company shall provide Parent with prior notice of its Subsidiaries and the opportunity to review and comment upon any such communications);
(s) take any action which would result in any of the ordinary course conditions to the Merger set forth in Article VI not being satisfied or that would reasonably be expected to prevent, delay or impair the ability of business)the Company to consummate the Merger; or
(st) agree agree, authorize or commit to do take any of the foregoing. Nothing contained in this Agreement shall give Parent, directly foregoing actions or indirectly, enter into any letter of intent (binding or non-binding) or similar Contract or arrangement with respect to any of the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsforegoing actions.
Appears in 1 contract
Samples: Merger Agreement (Comforce Corp)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from From the date of this Agreement until the Effective TimeTime or the earlier termination of this Agreement, except as expressly contemplated by this Agreement unless Parent shall otherwise consent in writing or as required by applicable Law or with the prior written consent of Parent, conduct its business otherwise expressly provided for in the ordinary course of business, and, to the extent consistent therewiththis Agreement, the Company shall, and shall cause each of its the Company Subsidiaries to, conduct its business only in the ordinary course of business consistent with past practice and shall use its commercially reasonable efforts to preserve substantially intact its business organization and its Subsidiaries’ goodwill and relationships with customers, suppliers and others having business organization, dealings with it and to keep available the services of its and its Subsidiaries’ current officers and employeeskey employees on terms and conditions substantially comparable to those currently in effect, in each case, in the ordinary course consistent with past practice and to preserve its timely file all reports required to be filed with the SEC. In addition to and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by provided for in this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable LawConversion and Contribution Agreement, from the Company shall not, nor shall it permit any of its Subsidiaries todate hereof until the Effective Time, without the prior written consent of Parent (which consent shall not be unreasonably withheld withheld, conditioned or delayed):, except with respect to any Proceedings described in clause (m) of this Section 5.01 that relate to this Agreement, the Merger or any other transactions contemplated herein, in which case such consent may be withheld, conditioned or delayed in Parent’s absolute discretion), the Company shall not and shall not permit any of its Subsidiaries to:
(a) amend adopt or propose to amend any change in its certificate Constituent Documents in effect as of incorporation or by-laws (or other comparable organizational documents)the date hereof, except the Restated Articles contemplated herein;
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(ci) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock, property stock or otherwiseproperty) in respect of, or enter into of any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct declared, set aside, made or indirect paid by any Company Subsidiary wholly-owned Subsidiaries to by the Company or other direct or indirect wholly-owned Subsidiaries of another Company Subsidiary to the Company), (ii) split, combine or reclassify any of its capital stock or issue or propose or authorize the issuance of any other securities (including options, warrants or any similar security exercisable for, or convertible into, such other security) in respect of, in lieu of, or in substitution for, shares of its capital stock, or (iii) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company or any Company Subsidiary, or any other equity interests or any rights, warrants or options to acquire any such shares or interests;
(dc) issue, sell, pledgegrant, dispose of pledge or otherwise encumber any Company Securities shares of its capital stock or Company Subsidiary Securitiesother securities (including any options, warrants or any similar security exercisable for or convertible into such capital stock or similar security) other than (i) the issuance of shares of Company Common Stock upon pursuant to the exercise of any Company Options outstanding on the date hereof under the Company Stock Option Plans or any Company Warrants outstanding under on the date hereof, in each case in accordance with their respective terms in effect on the date hereof, (ii) issuances by a wholly-owned Company Subsidiary of capital stock to such Company Subsidiary’s parent or another wholly-owned Company Subsidiary, (iii) delivery of capital stock upon the vesting of any Company Restricted Shares or (iv) issuances of shares of Common Stock Plans as issuable upon conversion of any shares of Series D Preferred Stock or Series E Preferred Stock outstanding on the date of this Agreement in accordance with its termsthe terms of the Company Articles of Incorporation in effect on the date hereof;
(d) merge or consolidate with any other Person or acquire an amount of assets or equity of any other Person in excess of $50,000 individually or in the aggregate;
(e) sell, lease, license, subject to a Lien (other than a Permitted Lien), encumber or otherwise surrender, relinquish or dispose of any assets, property or rights (including capital stock of a Company Subsidiary) except (i) as set forth on Section 5.01(e) of the Company Disclosure Letter, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice;
(f) make any loans, in each case excluding advances or capital contributions to, or investments in, any transfer, license, sale, lease or other disposition in connection with Person other than (i) from any transaction between or among the Company and/or one or more of its wholly-owned SubsidiariesSubsidiaries of the Company to the Company or (ii) advances to employees in the ordinary course of business consistent with past practice not to exceed $10,000 in each individual case;
(g) create, incur, guarantee or assume any Indebtedness, issuances of debt securities, guarantees, loans or advances, other than any of the foregoing created, incurred, guaranteed or assumed in the ordinary course of business consistent with past practice for working capital and cash management purposes under any revolving credit agreement in existence as of the date hereof or lease obligations incurred in the ordinary course of business consistent with past practice;
(h) make any capital expenditure other than in accordance with the budget of the Company and the Company Subsidiaries for the fiscal year ending December 31, 2007;
(i) materially amend or otherwise materially modify benefits under any Company Benefit Plan, materially accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Benefit Plan as currently in effect on the date hereof, fail to make any required contribution to any Company Benefit Plan, merge or transfer any Company Benefit Plan or the assets or liabilities of any Company Benefit Plan, change the sponsor of any Company Benefit Plan, or terminate or establish any Company Benefit Plan, in each case except as required by an existing agreement, plan or applicable Law;
(j) grant any increase in the compensation or benefits of directors, officers, employees, consultants, representatives or agents of the Company or any Company Subsidiary other than as required by any Company Benefit Plan in effect on the date hereof and payments and increases in the ordinary course of business consistent with past practice;
(k) enter into or amend or modify any change of control, severance, consulting, retention or employment agreement with any officer or employee, or any change of control, severance, consulting, retention or employment plan, program or arrangement;
(l) hire or terminate the employment or contractual relationship of any officer or employee of the Company or any Company Subsidiary, as the case may be, other than hirings or terminations in the ordinary course of business consistent with past practice or that, individually and in the aggregate, would not result in (i) a material increase in the number of persons providing services to the Company and the Company Subsidiaries in all such capacities, (ii) in the case of hirings, a material increase in the aggregate payroll and other benefits costs to the Company or such Company Subsidiary, and (iii) in the case of terminations, material liability to the Company or any Company Subsidiaries in excess of the costs savings, if any, directly derived from such terminations;
(m) settle or compromise any action, suit, claim, litigation, proceeding, arbitration, investigation, audit or controversy involving claims, liabilities or obligations (each, a “Proceeding”), or enter into any consent, decree, injunction or similar restraint or form of equitable relief in settlement of any Proceeding;
(n) make or rescind any material election relating to Taxes, settle or compromise any Proceeding relating to Taxes, make a request for a written ruling of a Taxing Authority relating to Taxes, enter into a material written and legally binding agreement with a Taxing Authority relating to Taxes, or change any of its material methods of reporting income or deductions for federal income Tax purposes (other than as required by applicable Law) from those employed in the preparation of its federal income Tax returns for the taxable year ending December 31, 2006;
(o) modify, amend, fail to renew or terminate any Company Contract, enter into any successor agreement to an expiring Company Contract that changes the terms of the expiring Company Contract in a way that is materially adverse to the Company or any Company Subsidiary, or modify, amend or enter into any new agreement that would have been considered a Company Contract if it were entered into at or prior to the date hereof;
(p) enter into or renew or extend any agreements or arrangements that limit or otherwise restrict the Company or any of the Company Subsidiaries or any of their respective Affiliates or any successor thereto, or that could reasonably be expected to, after the Effective Time, limit or restrict the Surviving Corporation or any of its Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(q) change any method of accounting or accounting principles or practices by the Company or any Company Subsidiary, except for any such change required by a change in GAAP;
(r) terminate, cancel, amend or modify any material insurance policies maintained by it covering the Company or the Company Subsidiaries or their respective properties which is not replaced by a comparable amount of insurance coverage;
(s) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 reorganization 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(kt) institute any, take any actions or settle omit to take any actions that would or compromise would be reasonably likely to (i) result in any pending or threatened, Legal Actions involving injunctive relief or of the payment representations and warranties of monetary damages by the Company and the Company Subsidiaries set forth in this Agreement being or becoming untrue or incorrect in any material respect; (ii) result in any of its Subsidiaries the conditions to the consummation of any amount exceeding $25,000 individually the Merger and the other Transactions set forth in Sections 6.01 and 6.02 not being satisfied or $100,000 in (iii) materially impair the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business ability of the Company or any Affiliate thereof;
(l) make any material change Parent to consummate the Merger and the other Transactions in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent accordance with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company hereof or any of its Subsidiaries in the ordinary course of business)materially delay such consummation; or
or (su) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company agrees (except as expressly contemplated by this Agreement or as required by applicable Law or with to the prior written extent that Parent shall otherwise consent of Parentin writing, conduct its such consent not to be unreasonably withheld), to carry on the Company's business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to pay the debts and Taxes of businessthe Company when due, to pay or perform other obligations when due, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries towith such business, use its commercially reasonable best efforts consistent with past practice and policies to preserve substantially intact its and its Subsidiaries’ the Company's present business organization, to keep available the services of its and its Subsidiaries’ current the Company's present officers and employees, to key employees and preserve its and its Subsidiaries’ present the Company's relationships with customers, suppliers, distributors, licensors, licensees licensees, and other Persons others having business relationships dealings with it. Without limiting , all with the generality goal of preserving unimpaired the foregoing, between the date of this Agreement Company's goodwill and ongoing business 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. Except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 5.1 of the Company Disclosure Letter or as required by applicable LawSchedule, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) waive any stock repurchase rights, accelerate, except as a result of the transactions contemplated by this Agreement pursuant to agreements in place prior to and as of the date hereof, amend or propose to amend its certificate change the period of incorporation exercisability of options or by-laws (restricted stock, reprice options previously granted or other comparable organizational documents)authorize cash payments in exchange for any options previously granted;
(b) splitgrant any severance or termination pay to any officer, combine employee or reclassifyconsultant, repurchase, redeem except payments in amounts consistent with policies and past practices or otherwise acquirepursuant to written agreements outstanding, or offer policies existing, on the date hereof and as previously disclosed in writing to repurchaseParent, redeem or otherwise acquire, adopt any Company Securities or Company Subsidiary Securitiesnew severance plan;
(c) declaretransfer or license to any person or entity or otherwise extend, set aside amend or modify in any material respect any rights to the Company Intellectual Property or enter into grants to future patent rights;
(d) declare or pay any dividend dividends on or distribution make any other distributions (whether in cash, stockstock or property) in respect of any capital stock or split, property combine or otherwise) reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or enter into in substitution for any Contract with respect capital stock (other than the issuance of Company Preferred Stock pursuant to the voting exercise of Preferred Stock Warrants or Company Common Stock pursuant to the conversion of Company Preferred Stock, in each case, outstanding as of the date hereof);
(e) repurchase or otherwise acquire, directly or indirectly, any shares of capital stock, except pursuant to rights of repurchase of any such shares under any agreements with any employee, consultant or director existing on the date hereof and disclosed to Parent (other than repurchases of Company Common Stock on termination of employees pursuant to the Company's employee stock purchase agreements);
(f) issue, deliver, sell, authorize or propose the issuance, delivery or sale of, any shares of its capital stock (or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other than dividends agreements or distributions from its direct commitments of any character obligating it to issue any such shares or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company);
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securitiesconvertible securities, other than (i) the issuance of shares of Company Common Preferred Stock upon pursuant to the exercise of any Company Preferred Stock Option Warrants therefor outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (ii) enter into any new shares of Company Common Stock pursuant to the exercise of stock options or amend in any material respect, any existing employment, severance, retention or change in control agreement with any rights therefor outstanding as of its past or present directors, officers or employeesthe date of this Agreement, (iii) promote any officers or employees, except with respect shares of Company Common Stock pursuant to employees with a base salary conversion of less than $60,000 Company Preferred Stock outstanding as the result of the termination or resignation date of any officer or employeethis Agreement, or (iv) establishwith the consent of Parent, adopt, enter into, amend, terminate, exercise any discretion under, or take any action options to accelerate rights under any acquire capital stock of the Company Employee Plans, or make any contribution to any Company Employee Plan;
new employees (f) hire any officer or employee, except provided that issuance of such options does not adversely affect the parties' ability to account for the replacement Merger as a pooling of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000interests);
(g) acquirecause, by merger, consolidation, acquisition permit or propose any amendments to its Certificate of stock Incorporation or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessBylaws;
(h) transferacquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership interest, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets involving payments by the Company in excess of $50,000 individually or in the aggregate;
(i) sell, lease, license, sell, lease encumber or otherwise dispose of any properties or assets (whether by way of mergerwhich are material, consolidationindividually or in the aggregate, sale of stock or assets, or otherwise), including to the capital stock or other equity interests in any Subsidiary business of the Company, other than in the case of obsolete equipment or assets being replaced, in each case except in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(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 indebtedness of another Person, or issue or sell any debt securities or options, warrants, calls warrants or other rights to acquire any debt securities of the Company 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiariesothers;
(k) institute anyadopt or amend any employee benefit or employee stock purchase or employee option plan, or settle enter into any employment contract, pay any special bonus or compromise special remuneration to any pending director, officer or threatenedemployee, Legal Actions involving injunctive relief or increase the payment of monetary damages by the Company salaries or any wage rates of its Subsidiaries of any amount exceeding $25,000 individually officers or $100,000 employees, in each case other than in the aggregateordinary course of business, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree consistent with past practice and as disclosed to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofParent;
(l) make pay, discharge or satisfy any material change claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in any method the ordinary course of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Lawbusiness;
(m) enter into make any material agreement, agreement in principle, letter grant of intent, memorandum of understanding or similar Contract with respect exclusive rights to any joint venture, strategic partnership or alliancethird party;
(n) authorizeenter into any agreement, contract or make commitment containing any commitment covenant limiting its freedom to engage in any line of business that the Company currently engages in or compete with respect to, any capital expenditure, except as contemplated by person in any line of business the Company’s existing fiscal year 2012 Capital BudgetCompany currently engages in;
(o) make, change commence or revoke settle any material Tax election, litigation;
(p) make or change any material election in respect of Taxes, adopt or change any accounting method in respect of Tax accounting, file any material amended Tax ReturnTaxes, enter into any material closing agreement, settle any material claim or assessmentassessment in respect of Taxes, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations limitation period applicable to any material claim or assessment, assessment in each case, with respect to of Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adoptrevalue any of its assets, modify from including without limitation writing down the form existing on value of inventory or writing off notes or accounts receivable other than in the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreementordinary course of business;
(r) enter intointo any partnership arrangements, terminatejoint ventures, modify joint development agreements, strategic partnership or waive any alliances, or other material right under, any Material Contract or Permit, contracts other than Contracts entered into with customers in the ordinary course of business consistent with past practice and as disclosed to Parent, or violate, amend or otherwise modify or waive any material contract;
(it being understood that, s) take any action that would be reasonably likely to interfere with Parent's ability to account for the purposes Merger as a pooling of this subsection, “consistent with past practice” shall not include entering into any Contract having terms interests unless (i) Parent and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company agree that the Merger will not be accounted for as a pooling of interests or any of its Subsidiaries in (ii) the ordinary course of business)Closing shall occur after May 31, 2000; or
(st) intentionally take or agree in writing or commit otherwise to do take any of the foregoing. Nothing contained actions described in this Agreement shall give ParentSection 5.01(a) through (s) above, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, any action which would cause the Company shall exercise, consistent not to comply with the terms and closing conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsset forth in Section 7.02.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Vitesse Semiconductor Corp)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from From the date of this Agreement until the Effective Time, unless Parent shall otherwise consent in writing or except as expressly contemplated by this Agreement set forth in Section 5.1 of the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent, conduct its business otherwise expressly provided for in the ordinary course of business, and, to the extent consistent therewiththis Agreement, the Company shall, and shall cause each of its the Company Subsidiaries to, conduct its business in the ordinary course consistent with past practice and shall use all of its commercially reasonable best efforts to preserve substantially intact its business organization and its Subsidiaries’ goodwill and relationships with customers, suppliers and others having business organization, dealings with it and to keep available the services of its and its Subsidiaries’ current officers and employeeskey employees on terms and conditions substantially comparable to those currently in effect and maintain its current rights and franchises, in each case, consistent with past practice. In addition to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 5.1 of the Company Disclosure Letter or as required by applicable Lawotherwise expressly provided for in this Agreement, from the Company shall not, nor shall it permit any of its Subsidiaries todate hereof until the Effective Time, without the prior written consent of Parent (which consent Parent, not to be unreasonably withheld, conditioned or delayed, the Company shall not be unreasonably withheld or delayed):and shall not permit any Company Subsidiary to:
(a) amend or propose to amend or otherwise adopt or propose any change in its certificate of incorporation or by-laws (or other comparable organizational documents)Constituent Documents;
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(ci) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock, property stock or otherwiseproperty) in respect of, or enter into of any Contract with respect to the voting of, any shares of its capital stock (other than cash dividends or distributions from its direct declared, set aside, made or indirect paid by any Company Subsidiary wholly-owned Subsidiaries by the Company or another Company Subsidiary wholly-owned by the Company to the Company or such other direct Company Subsidiary), (ii) adjust, split, combine or indirect 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, or (iii) repurchase, redeem or otherwise acquire any shares of the capital stock or securities directly or indirectly convertible into, or exercisable or exchangeable for, capital stock of the Company or any Company Subsidiary, or any other equity interests or any rights, warrants or options to acquire any such shares or interests other than in connection with the surrender of shares of employees pursuant to tax withholding rights contained in the Incentive Plan;
(c) issue, deliver, hypothecate, sell, grant, pledge or otherwise encumber any shares of its capital stock or other securities (including any options, warrants or any other security directly or indirectly exercisable or exchangeable for or convertible into such capital stock or similar security) other than (i) pursuant to the exercise of the options granted under the Nonstatutory Stock Option Agreement in accordance with its present terms, (ii) pursuant to the exercise of the Company Warrant in accordance with its present terms, (iii) issuances by a wholly-owned Subsidiaries Company Subsidiary of capital stock to such Company Subsidiary’s parent or another wholly-owned Company Subsidiary, (iv) delivery of capital stock upon the vesting of any Company Restricted Shares, (v) matching grants under the Seitel, Inc. 401(k) Plan (“Company 401(k) Plan”) to the extent provided by the Company 401(k) Plan as of the Company)date hereof or (vi) issuances of not more than an aggregate 1,320,716 Company Restricted Shares to be granted to the executive officers, management employees or non-employee directors of the Company listed in an annex to Section 3.3(c) of the Company Disclosure Letter;
(d) issuemerge or consolidate with, or acquire any interest in, any Person or division or unit thereof or acquire or agree to acquire any assets, except for acquisitions of seismic data or equipment and software in the ordinary course of business and consistent with past practice;
(e) sell, pledgelease, license (other than in the ordinary course of business, consistent with past practices), subject to a Lien (other than a Permitted Lien), encumber or otherwise surrender, relinquish or dispose of any assets, property or encumber any rights (including capital stock of a Company Securities or Company Subsidiary Securities, other than Subsidiary) except (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans pursuant to existing written contracts or commitments as listed in Section 5.1 of the date of this Agreement in accordance with its terms, Company Disclosure Letter or (ii) in accordance the ordinary course, consistent with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03past practice, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 so long as the result value of all assets so disposed is not in excess of $500,000 in 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Planaggregate;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(gi) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to, or otherwise make any investments in, any other Person other than (A) by the Company or any Company Subsidiary to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or or any of its wholly-owned SubsidiariesCompany Subsidiary existing on the date of this Agreement or (B) advances to employees (provided that all such advances (1) are in the ordinary course of business consistent with past practice and (2) do not exceed $10,000 in the aggregate), (xii) trade payables arising (A) create, incur, guarantee or assume any Indebtedness, other than any Indebtedness created, incurred, guaranteed or assumed in an aggregate amount not exceeding $1,000,000 at any time outstanding (and excluding any such Indebtedness incurred in the ordinary course of business consistent with past practice for working capital and cash management purposes under the Credit Facilities), (B) issue or sell any debt securities or warrants or rights to acquire any debt securities, (C) guarantee any other obligations of any other Person or (D) enter into any “keep well” or other agreement to maintain the financial condition of any other Person or any other agreement having the same economic effect, or (iii) make any Capital Expenditure that, together with Capital Expenditures made to date in fiscal year 2006, would cause the aggregate amount of all Capital Expenditures during 2006 to exceed the amount of Capital Expenditures allowable under the Indenture for fiscal year 2006;
(g) materially amend or otherwise materially modify benefits under any Company Benefit Plan, materially accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Benefit Plan as currently in effect on the date hereof, fail to make any required contribution to any Company Benefit Plan, merge or transfer any Company Benefit Plan or the assets or liabilities of any Company Benefit Plan, change the sponsor of any Company Benefit Plan, or terminate or establish any Company Benefit Plan, in each case except as required by an existing agreement, plan or applicable Law or as contemplated by this Agreement;
(h) grant any increase in the compensation or benefits of directors, officers, employees, consultants, representatives or agents of the Company or any Company Subsidiary other than as required by any plan or arrangement in effect on the date hereof and payments and increases in the ordinary course of business consistent with past practice;
(i) enter into or amend or modify any change of control, severance, consulting, retention or employment agreement, plan, program or arrangement with any Senior Officer(s) or other employee(s) or consultant of the Company or any Company Subsidiary;
(j) hire or terminate the employment or contractual relationship of any officer or employee of the Company or any Company Subsidiary, as the case may be, other than hirings or terminations in the ordinary course of business consistent with past practice or that, individually and in the aggregate, would not result (i) in a material increase in the number of persons providing services to the Company and the Company Subsidiaries in all such capacities, (ii) in the case of hirings, a material increase in the aggregate payroll and other benefits costs to the Company or such Company Subsidiary (such increase to be determined, in the case of a hiring to replace an employee or other service provider in a pre-existing position based solely on the costs in excess of the costs associated with the replaced service provider), and (iii) in the case of terminations, a material liability to the Company or any of the Company Subsidiaries in excess of the costs savings, if any, directly derived from such terminations;
(k) settle or compromise any pending or threatened claims, liabilities or obligations in any action, suit, claim, litigation, proceeding, arbitration, investigation, audit or controversy (each a “Proceeding”) (i) involving potential payments by or to the Company and the Company Subsidiaries in excess of $1,000,000 in the aggregate or otherwise material to the Company and the Company Subsidiaries taken as a whole, (ii) involving any consent, decree, injunction or similar restraint or form of equitable relief in settlement of any material Proceeding, (iii) with a settlement or compromise including any admission of liability or consent to non-monetary relief, or (iv) that if adversely determined would constitute a Company Material Adverse Effect;
(l) other than in the ordinary course of business, (y) advances and except as are not, individually or in the aggregate, material to employees for expenses reimbursable under the Business or the Company and/or and the Company Subsidiaries, taken as a whole, (i) make or rescind any material election relating to Taxes, (ii) settle or compromise any Proceeding relating to Taxes, (iii) make a request for a written ruling of a Taxing Authority relating to Taxes, other than any request for a determination concerning qualified status of any Company Benefit Plan intended to be qualified under Code Section 401(a), (iv) enter into a material written and legally binding agreement with a Taxing Authority relating to Taxes, or (v) except as required by Law, change any of its Subsidiaries’ business expense reimbursement policy, and (z) advances material methods of reporting income or deductions for federal income tax purposes from those employed in the ordinary course preparation of businessits federal income tax returns for the taxable year ending December 31, 2005;
(hm) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment as contemplated by this Agreement or assets being replaced, in each case in the ordinary course of business consistent with past practice, (i) modify, amend or terminate any Company Contract, (ii) enter into any successor agreement to an expiring Company Contract that changes the terms of the expiring Company Contract in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among a way that is materially adverse to the Company and/or one or more of its wholly-owned Subsidiariesany Company Subsidiary or (iii) enter into any new agreement that would have been considered a Company Contract if it had been entered into at or prior to the date hereof;
(in) adopt enter into or effect a plan renew or extend any agreements or arrangements that limit or otherwise restrict the Company or any of complete the Company Subsidiaries or partial liquidationany of their respective Affiliates or any successor thereto, dissolutionor that would, restructuringafter the Effective Time, recapitalization limit or restrict the Surviving Corporation or any of its Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area or competing with any other reorganizationPerson;
(jo) incur change any indebtedness for borrowed money method of accounting or guarantee accounting principles, procedures or practices by the Company or any such indebtedness of another PersonCompany Subsidiary, issue or sell change the fiscal year or revalue any debt securities or options, warrants, calls or other rights to acquire any debt securities material assets 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facilityCompany Subsidiary, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiariessuch change required by GAAP;
(kp) institute anyterminate, cancel, amend or settle or compromise modify any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages material insurance policy maintained by it covering the Company or the Company Subsidiaries or their respective properties which is not replaced by a comparable amount of insurance coverage;
(q) (i) pay, discharge or satisfy any Indebtedness (absolute, accrued, asserted or unasserted, contingent or otherwise) in excess of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 1,000,000 in the aggregate, other than in the ordinary course of business and consistent with past practice, (ii) cancel any Legal Action brought against Parent Indebtedness in excess of $1,000,000 in the aggregate, (iii) waive or Merger Sub arising out assign any claims or rights of a breach substantial value or alleged breach of this Agreement by Parent or Merger Sub; provided(iv) waive any material benefits of, that neither the Company nor any of its Subsidiaries shall settle or agree to settle modify in any Legal Action material respect, or materially fail to enforce, or consent to any material matter with respect to which settlement involves a conduct remedy or injunctive consent is required under, any material confidentiality, standstill or similar relief or has a material restrictive impact on the business of agreement to which the Company or any Affiliate thereof;
of the Company Subsidiaries is a party (l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Confidentiality Agreement);
(r) enter intoExcept as permitted by Section 5.7, terminate, modify knowingly or waive intentionally take any actions or omit to take any actions that would or would be reasonably likely to (i) result in any of the conditions to the consummation of the Merger set forth in Article VI not being satisfied (ii) impair in any material right underrespect the ability of the Company to perform its obligations under this Agreement or (iii) materially impair the ability of the Company or Merger Sub to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(s) enter into any license with respect to Company Owned Intellectual Property unless such license is non-exclusive (or if exclusive, only for an exclusive period of not more than 12 months pursuant to a contract (provided, however, that such contract may be modified or amended to extend such exclusive period not more than an additional number of months such that the aggregate length of any Material Contract or Permit, other than Contracts and all such exclusive periods would not exceed 18 months from the beginning of the first exclusive period) with a customer that is underwriting at least 65% of the cost of acquiring the data to be so licensed) and entered into with customers in the ordinary course of business consistent with past practice practice;
(it being understood thatt) permit any material item of Company Owned Intellectual Property to become abandoned, for cancelled, invalidated or dedicated to the purposes of this subsection, “consistent with past practice” shall not include entering public except as may be required by applicable Law;
(u) enter into any Contract having terms and conditions new line of business;
(including terms and conditions regarding pricing and Liabilitiesv) that areabandon, in cancel, permit to lapse or dedicate to the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into public domain any Intellectual Property owned by the Company or any Company Subsidiary except as may be required by applicable Law;
(w) enter into any material contract, agreement or arrangement to the extent consummation of its the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement could reasonably be expected to result in a violation of such contract, agreement or arrangement;
(x) alter (through merger, liquidation, reorganization, restructuring or any other fashion) the corporate structure or ownership of the Company or any of the Company Subsidiaries in the ordinary course of business)or authorize, recommend, propose or announce an intention to do so; or
(sy) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Merger Agreement (Seitel Inc)
Conduct of Business of the Company. The During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company shall, agrees as to itself and shall cause each of its Subsidiaries to(except to the extent that Parent shall otherwise consent in writing) to carry on its business in the usual, regular and ordinary course in substantially the same manner as previously conducted, to pay its debts and taxes when due subject to good faith disputes over such debts or taxes, to pay or perform its other obligations when due, and, to the extent consistent with such business, use all reasonable efforts consistent with past practices 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, and others having business dealings with it. Without limiting the generality of the foregoing and except as expressly contemplated by this Agreement, 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 expressly contemplated by this Agreement or as required by applicable Law or with without the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor not and shall it not permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed)::
(ai) amend adopt any amendment to its Certificate of Incorporation or propose to amend its certificate of incorporation Bylaws or by-laws (comparable charter or other comparable organizational documents);
(bii) split(A) other than pursuant to the Prudential Agreement issue, combine pledge or reclassifysell, repurchaseor authorize the issuance, redeem pledge or sale of additional shares of capital stock of any class, or securities convertible into capital stock of any class, or any rights, warrants or options to acquire any convertible securities or capital stock, or any other securities in respect of, in lieu of, or in substitution for, shares of Company Common Stock outstanding on the date hereof or (B) amend, waive or otherwise acquiremodify any of the terms of any option, warrant or offer to repurchasestock option plan of the Company or any of its Subsidiaries, redeem including without limitation, the Company Stock Options or otherwise acquire, any the Company Securities or Company Subsidiary SecuritiesOption Plans;
(ciii) declare, set aside or pay any dividend or other distribution (whether in cash, stock, securities or property or otherwiseany combination thereof) in respect ofof any class or series of its capital stock other than between any wholly owned Subsidiary of the Company and the Company or any other wholly owned Subsidiary of the Company;
(iv) split, combine, subdivide, reclassify or other than pursuant to the Prudential Agreement, redeem, purchase or otherwise acquire, or enter into any Contract with respect propose to the voting ofredeem or purchase or otherwise acquire, any shares of its capital stock (stock, or any of its other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company)securities;
(dv) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (iA) increase the compensation of or fringe 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 options, stock appreciation rights, shares of restricted stock or performance units) or grant any severance or termination pay to, or (B) enter into any employment or severance agreement with, any director, officer or employee of the Company or any of its Subsidiaries, (ii) enter into any new Subsidiaries or amend in any material respect, any existing employment, severance, retention or change in control agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 as the result of the termination or resignation of any officer or employee, or (iv) establish, adopt, enter into, amendor amend any collective bargaining, terminateEmployee plan or Other Benefit Obligation, exercise any discretion under, or take any action to accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Planthe extent required by applicable Regulations;
(fA) hire any officer sell, pledge, lease, dispose of, grant, encumber, or employeeotherwise authorize the sale, except for the replacement pledge, disposition, grant or encumbrance of any current employee whose employment with material properties or assets of the Company or any Subsidiary thereof is terminated of its Subsidiaries or who resigns for any reason(B) acquire (including, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquirewithout limitation, by merger, consolidation, lease or acquisition of stock or assets) any corporation, partnership, other business organization or otherwise, any business thereof (or Person a substantial portion of the assets thereof) or division thereof any other assets;
(vii) (A) incur, assume or make pre-pay any loans, advances or capital contributions to or investments in any PersonIndebtedness, except for (w) intercompany loans, advances or capital contributions entered into in between or among that the Company and/or any of and its whollySubsidiaries may incur or pre-owned Subsidiaries, (x) trade payables arising pay debt in the ordinary course of businessbusiness consistent with past practice under existing lines of credit, (yB) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policyassume, and (z) advances in the ordinary course of business;
(h) transferguarantee, license, sell, lease endorse or otherwise dispose become liable or responsible (whether directly, contingently or otherwise) for the obligations of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case person except in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(lC) make any material change in any method of financial accounting principles loans, advances or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorizecapital contributions to, or make any commitment with respect toinvestments in, any capital expenditure, other person except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood thatand except for loans, for advances, capital contributions or investments between any wholly-owned Subsidiary of the purposes Company and the Company or another wholly-owned Subsidiary of this subsectionthe Company; provided, “consistent with past practice” however, that in no event shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries incur Indebtedness which is subject to any penalty, premium, "make-whole" or similar obligation in connection with pre-payment thereof;
(viii) authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution of the Company or any of its Subsidiaries;
(ix) 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, amend any Tax Return except in the ordinary course of businessbusiness consistent with past practice, or, except as may be required by applicable law, make any change to any of its methods of reporting income or deductions for federal income tax purposes from those employed in the preparation of the Company's consolidated federal income tax return for the taxable year ending December 31, 1998;
(x) settle or consent to any judgment concerning any pending or threatened litigation involving the Company or any of its Subsidiaries (whether brought by a private party or a Governmental Entity);
(xi) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures, unless required by GAAP or the SEC;
(xii) modify, amend or terminate any of the Company Material Contracts or waive, release or assign any material rights or claims, except in the ordinary course of business consistent with past practice;
(xiii) 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 Effective Time such that the condition to Closing set forth in Section 6.3(a) would not be likely satisfied;
(xiv) engage in any transaction with, or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Company's Affiliates which involves the transfer of consideration or has a financial impact on the Company, other than pursuant to such agreements, arrangements, or understandings existing on the date of this Agreement which are set forth in the Company Disclosure Schedule or in the Company SEC Reports filed prior to the date hereof;
(xv) make any capital expenditures in excess of $100,000, individually or $300,000 in the aggregate;
(xvi) amend, modify or terminate any standstill or confidentiality agreement or waive, release or assign any rights of the Company under any such agreement; or
(sxvii) agree enter into an agreement, contract, commitment or commit arrangement to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectlyto authorize, recommend, propose or announce an intention to do any of the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Conduct of Business of the Company. The Except as set forth on Section 5.1 of the Company shall, Disclosure Schedules and shall cause each as contemplated in the budget to be attached to the Line of its Subsidiaries toCredit, during the period from the date of this Agreement until the Effective Time, the Company shall, and shall cause each of its Subsidiaries, except as expressly contemplated by this Agreement or Agreement, as required by applicable Law Law, or with the prior written consent of ParentParent (which consent shall not be unreasonably withheld, conditioned, or delayed), to conduct its business in the ordinary course of business, and, to business consistent with past practice. To the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees licensees, and other Persons having business relationships with itit or its Subsidiaries. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or Agreement, as set forth in Section 6.01 5.1 of the Company Disclosure Letter Schedules, as contemplated by the budget to be attached to the Line of Credit, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld withheld, conditioned, or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents)Charter Documents;
(b) (i) split, combine combine, or reclassifyreclassify any Company Stock or Company Subsidiary Securities, (ii) repurchase, redeem redeem, or otherwise acquire, or offer to repurchase, redeem redeem, or otherwise acquire, any Company Securities Stock or Company Subsidiary Securities;
, or (ciii) declare, set aside aside, or pay any dividend or distribution (whether in cash, stock, property property, or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the CompanySubsidiaries);
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(s) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Merger Agreement
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except (a) Except as expressly contemplated by this Agreement (including with respect to the Reorganization), or as set forth on Schedule 6.1, from and after the Signing Date until the earlier of the Closing or the termination of this Agreement in accordance with Article 8, except as consented to in writing by Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed) or as required by applicable Law or with the prior written consent of Parentlaw (including any Health and Safety Measures), conduct its business in the ordinary course of business, and, to the extent consistent therewith, (w) the Company shall, and shall cause each other Group Company to, conduct its business in the Ordinary Course of its Subsidiaries Business, (x) the Company shall, and shall cause each other Group Company to, use its commercially reasonable efforts to preserve substantially intact (A) its business organization and to preserve the present commercial relationships with Persons with whom it has a material business relationship, and (B) its Subsidiaries’ business organizationmaterial assets owned, to keep available leased or used in the services conduct of its business; (y) the Company shall, and its Subsidiariesshall cause the Group Companies to, use commercially reasonable efforts to have and maintain an aggregate amount of Store Cash as of immediately prior to the Closing of at least $250,000; provided, however, that notwithstanding anything to the contrary herein, but without derogation of, or limiting, the Group Companies’ current officers obligations in the preceding provisions of this clause (y), and employeesfor the avoidance of doubt, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting in no event shall the generality maintenance of the foregoing, between aggregate amount of Store Cash as of immediately prior to the date Closing of this Agreement at least $250,000 constitute a condition to Purchaser’s obligation to consummate the Closing; and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable Law, (z) the Company shall not, nor and shall it permit cause each other Group Company not to:
(i) amend, waive or otherwise modify any provision of its Subsidiaries toGoverning Documents (whether by merger, without the prior written consent of Parent (which consent shall not be unreasonably withheld consolidation or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documentsotherwise);
(bii) make or declare any dividend or distribution in respect of its equity interests, except dividends and distributions by a Group Company (A) to any other Group Company or dividends or distributions solely in cash (other than Store Cash) from excess cash balances not needed for operations in the Ordinary Course of Business or (B) subject to Section 6.1(a)(iii), to distribute Cash and Cash Equivalents in excess of the Cash Cap;
(iii) transfer Store Cash out of the Stores, except in the Ordinary Course of Business; provided, that notwithstanding the foregoing, the Company shall use commercially reasonable efforts to not, and to cause each other Group Company not to, transfer, spend or otherwise utilize Store Cash if such transfer, expenditure or utilization would reasonably be expected to cause the aggregate amount of Store Cash as of immediately prior to the Closing to be less than $250,000; provided, however, that notwithstanding anything to the contrary herein, but without derogation of, or limiting, the Group Companies’ obligations in the preceding provisions of this clause (iii), and for the avoidance of doubt, in no event shall the maintenance of the aggregate amount of Store Cash as of immediately prior to the Closing of at least $250,000 constitute a condition to Purchaser’s obligation to consummate the Closing.
(iv) issue or sell, or authorize the issuance or sale of, any equity securities, securities convertible into, exchangeable for, or exercisable for equity securities, or any other rights to purchase any Group Company’s equity securities;
(v) split, combine combine, redeem or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem purchase or otherwise acquire, any Company Securities or Company Subsidiary Securitiesof its equity interests;
(cvi) declare, set aside or pay make any dividend or distribution (whether material change in cash, stock, property or otherwise) in respect of, or enter into any Contract the policies and practices of such Group Company with respect to the voting ofpayment of accounts payable or accrued expenses or the collection of the Accounts Receivable or other receivables, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries including with respect to the Company or other direct or indirect wholly-owned Subsidiaries of the Company)timing thereof;
(dvii) issuemake any material change in its cash management practices or in the financial or tax accounting methods, sellprinciples or practices used by such Group Company, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by law or GAAP, as applicable;
(viii) make, rescind or change any material Tax election, adopt or change any Tax accounting period or material Tax accounting method, enter into any closing agreement in respect of Taxes, agree to any extension or waiver of the statute of limitation period applicable Law to any Tax claim or assessment, settle any Tax claim or assessment, amend any material Tax Return, fail to timely file any material Tax Return required to be filed, fail to pay any material amount of Tax as it becomes due, surrender any right to claim a Tax refund, take any action to seek relief pursuant to Section 3.03any COVID-19 law, including, but not limited to, incurring any indebtedness pursuant to any COVID-19 law, seeking forgiveness for any such indebtedness or deferring any payroll, employment or similar Taxes;
(iix) sell, license, lease, transfer, assign, dedicate to the public domain, permit to lapse, grant any option or other right in, abandon or otherwise dispose of any of its material assets (including any Leased Real Property or Company Owned IP Rights), or mortgage, pledge, or impose any Lien (other than a Permitted Lien) upon any of its material assets (including any Leased Real Property or Company Owned IP Rights), in each case, other than in the Ordinary Course of Business;
(x) except as may be required by law or contract, or in the Ordinary Course of Business, increase the compensation or benefits of directorsany employee of such Group Company;
(xi) make any material change in the manner in which such Group Company extends discounts, officers rebates or employees of the Company credits to customers or to any of its Subsidiaries, loyalty or rewards program;
(iixii) enter into any new amend or amend modify in any material respect, renew or fail to renew, enter into or voluntarily terminate or rescind any existing employmentMaterial Contract, severanceFranchise Agreement, retention Multi-Unit Development Agreement or change Insurance Policy or exercise, waive, release or assign any material rights, claims or benefits under any Material Contract or Insurance Policy, in control agreement with any each case, except in the Ordinary Course of its past Business;
(xiii) other than as required by an Employee Benefit Plan set forth on Schedule 3.10(a), or present directors, officers or employeesas explicitly contemplated hereunder, (iiiA) promote accelerate the vesting or payment of any officers compensation or employeesbenefits of any employee or other individual service provider of any Group Company, except with respect (B) enter into, amend or terminate any Employee Benefit Plan (or any plan, program, agreement or arrangement that would be an Employee Benefit Plan if in effect on the Signing Date) or grant, amend or terminate any awards thereunder, other than on account of changes in law, (C) fund any payments or benefits that are payable or to be provided under any Employee Benefit Plan, (D) terminate without “cause” any employee of any Group Company other than in the Ordinary Course of Business for employees with who are eligible to earn a base salary of less than $60,000 as 200,000, (E) promote or change the result title of, or hire or engage any new employee or other individual service provider of any Group Company other than in the Ordinary Course of Business (1) for any employee or other individual service provider at a level below vice present and who is eligible to earn a base compensation of less than $200,000 and (2) to the extent that following the promotions, changes in title or hiring of such employees or other service providers the compensation expense of the termination Group Companies would remain within the budgets of the Group Companies provided to the Purchaser, (F) make any loan to any present or resignation former employee or other individual service provider of any officer Group Company (other than advancement of expenses in the Ordinary Course of Business or employeeunder and in accordance with any qualified retirement plan), or (ivG) establish, adopt, enter into, amendamend or terminate any collective bargaining agreement or other agreement with a labor union, terminateworks council or similar organization (or enter into negotiations to do any of the foregoing); provided, exercise that for the avoidance of doubt the restrictions set forth in this Section 6.1(a)(xiii) shall not apply to sale, success, change of control or similar bonuses granted or agreed to be granted to employees of any discretion underGroup Company to the extent such bonuses would be included in the calculation of Seller Expenses; provided, or take any action to accelerate rights under any further, that the Company Employee Plans, or make any contribution to any Company Employee Planfirst provides Purchaser with at least two (2) Business Days’ prior written notice of such bonuses;
(fxiv) hire any officer (A) incur, assume, guarantee or employeeotherwise become liable or responsible for (whether directly, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, contingently or otherwise) any Funded Indebtedness in the Ordinary Course of Business in excess of $250,000, any business individually or Person or division thereof or in the aggregate, (B) make any loans, advances or capital contributions to to, or investments in, any Person (other than advances of travel expenses in the Ordinary Course of Business) in excess of $50,000 or (C) amend or modify any terms or contracts in respect of any Funded Indebtedness in any Personmaterial respect;
(xv) cancel or forgive any Funded Indebtedness in excess of $250,000 owed to any Group Company;
(xvi) enter into, renew, modify or revise any Company Affiliated Transaction or Seller Affiliated Transaction, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or termination of any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances such transaction pursuant to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessSection 6.27;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(ixvii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(jxviii) incur any indebtedness for borrowed money grant or guarantee any such indebtedness of another Person, issue otherwise create or sell any debt securities or options, warrants, calls or other rights consent 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 creation of any other Person Lien (other than a Permitted Lien) on any whollymaterial assets or any Leased Real Property;
(xix) waive, release, assign, settle or compromise any claim, action, or proceeding (whether civil, criminal, administrative or investigative) (A) involving payments in excess of $250,000 in any single instance or $250,000 in the aggregate or (B) which imposes any restrictions on the operations of any Group Company;
(xx) implement or announce any employee layoffs, plant closings, reductions in force, furloughs, temporary layoffs, salary or wage reductions, work schedule changes or other such actions that could implicate the Worker Adjustment and Retraining Notification Act of 1988, as amended, or any similar state or local law, rule or regulation;
(xxi) waive or release any non-owned Subsidiary competition, non-solicitation, non-disclosure, non-interference, non-disparagement or other restrictive covenant obligation of it) any current or former employee, independent contractor or other service provider or enter into any arrangement having agreement that restricts the economic effect ability of any Group Company to engage or compete in any line of the foregoingbusiness;
(xxii) purchase or otherwise acquire (by merger, consolidation, acquisition of stock or incur assets or otherwise), directly or indirectly, any Liens other than Permitted Liens in connection with the foregoingassets, securities, properties, interests or businesses, other than (A) inventory and supplies in the financing Ordinary Course of ordinary course trade payables consistent with past practice Business or pursuant (B) other assets in an amount not to an existing financing facility, except for intercompany loans entered into exceed $200,000 individually or $1,000,000 in between or among the Company and/or any of its wholly-owned Subsidiariesaggregate;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(mxxiii) enter into any material agreement, agreement in principle, letter new line of intent, memorandum business or exit any existing line of understanding or similar Contract with respect to any joint venture, strategic partnership or alliancebusiness;
(nxxiv) authorize(A) make or commit to make any capital expenditures in excess of $250,000, in each case except to the extent in accordance with any annual budget or similar strategic budgetary plan approved by the Board of Managers of PSP Holdings, or (B) fail to make any commitment capital expenditures in accordance with respect to, any capital expenditureannual budget or similar strategic budgetary plan approved by the Board of Managers of PSP Holdings, except as contemplated by for capital expenditures of less than $200,000, individually or in the Company’s existing fiscal year 2012 Capital Budgetaggregate;
(oxxv) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, (A) enter into any material closing agreementnew rent deferral arrangement in connection with any Real Property Lease, settle (B) modify or amend the terms of any material claim Existing Relief Arrangement or assessment, surrender (C) modify or amend the terms of any right rent concession arrangement or agreement existing as of the Signing Date which would be reasonably likely to claim a material refund, offset result in any adverse impact or other reduction in Liability or consent increased expense to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business)Group Company; or
(sxxvi) agree agree, whether orally or commit in writing, to do any of the foregoing. .
(b) Notwithstanding anything to the contrary contained in this Agreement, at any time and from time to time prior to the Closing, the Group Companies shall be permitted (but not obligated) to take any actions that the Company reasonably believes in good faith is necessary for the Group Companies to (x) mitigate the adverse effects of COVID-19 on the business of the Group Companies, or (y) comply with any laws or orders of any Governmental Entity issued in response to COVID-19 (including any Health and Safety Measures) and any such action taken in accordance with this Section 6.1(b) shall in no event be deemed to result in a breach of Section 6.1(a); provided, that prior to taking any such measure or action, the Company shall reasonably consult in advance with Purchaser in good faith with respect to any such measure or action taken, keep Purchaser reasonably informed as to any such measure or action, provide Purchaser with reasonable advance written notice and a reasonable opportunity to review and comment on any resulting policies, procedures, and protocols, and consider in good faith any comments or suggestions by Purchaser, unless such consultation in advance is not practicable due to exigent circumstances, in which case the Company shall provide Purchaser with prompt written notice of such measures or actions taken.
(c) Nothing contained in this Agreement Section 6.1 shall be deemed to give ParentPurchaser, directly or indirectly, the right to control or direct the Company’s Company or its Subsidiaries’ any operations of any Group Company prior to the Effective Time. Prior Closing and prior to the Effective TimeClosing, the Company shall exercise, consistent with the terms and conditions hereof, control over the respective businesses and operations of the Group Companies; provided, that in each case, the Company shall, and shall cause the Group Companies to, comply with the provisions of clauses (a) and (b) of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsSection 6.1 prior to the Closing.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement hereof until the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality earlier of the foregoing, between the date termination of this Agreement and the Effective Time, except as set forth on Schedule 7.2(a) or as otherwise expressly contemplated by provided for in this Agreement (including the Pre-Closing Recapitalization) or as set forth in Section 6.01 of required by Law, (1) the Company Disclosure Letter or as required by applicable Lawagrees that it shall, the Company and shall not, nor shall it permit any of cause its Subsidiaries to, without (A) conduct the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company);
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees business of the Company or any of and its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case Subsidiaries only in the ordinary course of business consistent with past practice, and (B) use their reasonable best efforts to preserve the present business operations, organization, franchise and goodwill of the Company and its Subsidiaries and preserve the present relationships with Persons having material business dealings with the Company and its Subsidiaries (including ship builders, material customers, material travel agents, insurers, material suppliers, lenders and regulators), and (2) in addition to and without limiting the generality of the foregoing, the Company agrees that it and its Subsidiaries shall not, in each case excluding without the prior written consent of Parent (which, in the case of Sections 7.2(a)(v), 7.2(a)(vi), 7.2(a)(vii), 7.2(a)(viii) and 7.2(a)(xiv), shall not be unreasonably withheld, conditioned or delayed):
(i) declare, set aside, make or pay any transferdividend (including any dividend or distribution of securities convertible into capital stock or shares, license, sale, lease as applicable) or other disposition distribution in respect of any Company Note or any Equity Interest of the Company or make any other Prohibited Payment to any Company Stockholder or Affiliate;
(ii) (x) pay its accounts payable, collect its accounts receivable or otherwise change or modify its credit, collection or payment policies, procedures or practices, in each case, in any manner other than in the ordinary course consistent with past practice, make or fail to make any capital expenditures or commitments other than in a manner materially consistent with the Company’s 2014 annual capital expenditure forecast, or (y) other than in connection with obtaining the Financing Consent and the Mortgage Consent (which, for the avoidance of doubt, shall be governed by Sections 7.4(b) and 7.4(c)), make any transaction between payment to a third party (other than immaterial amounts) in connection with obtaining the Required Consents or among any such third party’s consent to the Merger and the transactions contemplated by this Agreement;
(iii) (A) issue, create, incur, assume, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently or otherwise) any Indebtedness (other than (i) revolver borrowings in the ordinary course of business pursuant to revolving facilities in place on the date hereof, (ii) hedging transactions consistent with past practice and (iii) capital lease obligations and other Indebtedness incurred in the ordinary course of business in an aggregate principal amount of less than $1,000,000 in the aggregate), (B) pay, repay, discharge, purchase, repurchase or satisfy any Indebtedness of the Company and/or one or more any of its whollySubsidiaries (other than (i) revolver borrowings in the ordinary course of business pursuant to revolving facilities in place on the date hereof, (ii) hedging transactions consistent with past practice and (iii) any mandatory or scheduled payments); or (C) modify the terms of any Indebtedness;
(iv) except as required by any Employee Plan or agreement in existence on the date of this Agreement: (A) increase the salary or other compensation of any Employee of the Company or any of its Subsidiaries, (B) enter into or amend any contract of employment providing for annual compensation in excess of $150,000, (C) grant or agree to grant any bonus or unusual or extraordinary benefit or direct or indirect compensation to any member of the Company Board of Directors or any Employee, excluding, for the avoidance of doubt, annual bonuses required to be paid in respect of fiscal year 2014 pursuant to an Employee Plan disclosed on Schedule 4.15(b)(i) in accordance with the terms of such Employee Plan as in effect on the date of this Agreement, (D) increase the coverage or benefits available under any (or create any new) change in control plan, severance pay, termination pay, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other employee benefit plan or arrangement made to, for, or with any of the members of the Company Board of Directors, officers, Employees, agents, other service providers or representatives of the Company or any of its Subsidiaries or otherwise modify or amend or terminate any such plan or arrangement or expand the coverage of any such plan or arrangement to any of the foregoing individuals not covered as of the date hereof, (E) enter into any employment, deferred compensation, severance, special pay, consulting, non-owned competition or similar agreement or arrangement with any members of the Company Board of Directors or officers of the Company or any of its Subsidiaries (or amend any such agreement to which the Company or any of its Subsidiaries is currently a party), (F) terminate or demote any executive officer of the Company or its Subsidiaries other than for cause, or hire or promote any person to an executive officer position or (G) enter into any labor or collective bargaining or similar agreement or, through negotiation or otherwise, make any commitment or incur any liability to any labor organization with respect to the Company or any of its Subsidiaries;
(iv) adopt (A) acquire or effect a plan lease (other than charters in the ordinary course of complete or partial liquidation, dissolution, restructuring, recapitalization business consistent with past practice) any vessel or other reorganizationmaterial properties or assets (whether tangible or intangible) or (B) sell, transfer, lease, license, mortgage, subject to Lien or otherwise dispose of or encumber any vessel or other material properties or assets (whether tangible or intangible), rights or liabilities except (1) pursuant to any Contracts in effect on the date hereof set forth on Schedule 7.2(a) or entered into in compliance with this Section 7.2(a) (other than charters in the ordinary course of business consistent with past practice), (2) as specifically contemplated by this Agreement or (3) for Permitted Liens;
(jvi) incur enter into any indebtedness material leases for borrowed money new or guarantee existing equipment, other than with respect to entering into any lease for new or existing equipment for the replacement of equipment presently leased for which the leasing Contract terminates by the passage of time and on substantially the same terms of such terminated Contract;
(vii) except as required by its terms, amend, terminate, restate, supplement, waive any rights under or enter into (1) any Material Contract (it being understood that for purposes of this Section 7.2(a)(vii), any Material Contract that has a threshold value of $2,000,000 pursuant to Section 4.10 shall have a threshold value of $1,000,000 and it being understood that charters, travel agent, travel arranger, tour organizer and concessionaire Contracts shall be deemed to not be Material Contracts for purposes of this Agreement), (2) any travel agent, travel arranger, tour organizer or concessionaire Contracts the renewal of which for the calendar year 2015 is not on terms materially consistent with the terms of any such indebtedness Contracts for the calendar year 2014 (it being understood that any amendment or modification of another Personterms that could reasonably be expected to increase the Company’s or its Subsidiaries’ commission costs by greater than $250,000 shall require the reasonable approval of Parent) and (3) any charter Contract involving payment or other obligations due to the Company or any of its Subsidiaries in excess of $2,000,000;
(viii) change or amend its certificate of incorporation, issue bylaws, or sell equivalent organizational or governing documents of the Company or any debt of its Subsidiaries;
(ix) transfer, issue, sell, redeem or acquire for value, pledge, encumber or dispose of any Equity Interests or other securities of, or other ownership interests in, the Company or any of its Subsidiaries or grant options, warrants, calls or other rights to purchase or otherwise acquire any debt Equity Interests or other securities of of, or other ownership interests in, the Company or any of its Subsidiaries, guarantee or any debt securities other right, the value of another Personwhich is determined with respect to any Equity Interest, other than upon exercise of outstanding Company Options in accordance with their terms as in effect on the date of this Agreement;
(x) have the Company S-1 declared effective or take other actions relating to a public offering of the capital stock of the Company or its Subsidiaries prior to the earlier of the Closing and the termination of this Agreement; provided, however, that neither the foregoing nor any other provision of this Agreement shall preclude the Company from filing with the SEC any amendments to the Company S-1, or other documents required to be filed with or furnished to the SEC in connection therewith or taking any action with respect thereto if required by the SEC;
(xi) effect any stock split, reverse stock split, reorganization, reclassification, combination, recapitalization or other like change with respect to any Equity Interest of the Company;
(xii) enter into or agree to enter into any “keep well” merger or other Contract to maintain any financial statement condition of consolidation with any other Person (or acquire or agree to acquire, by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other than manner, any wholly-owned Subsidiary of it) business or any corporation, partnership, association or other business organization or division thereof, or enter into any arrangement having the economic effect of any of the foregoing, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic venture or partnership or alliancearrangement;
(nxiii) authorizemake a change in its accounting reporting principles, methods or make any commitment with respect to, any capital expenditure, policies except as contemplated required by the Company’s existing fiscal year 2012 Capital Budget;
(o) GAAP or make, change or revoke any material Tax election, change amend any material method of Tax accountingReturn, file except as otherwise required by applicable Law, settle or compromise any material amended Tax Returnclaim or liability or enter into such a settlement or compromise, enter into any material closing agreement, settle any material claim or assessmentagreement with respect to Taxes, surrender any right to claim a material refund, offset change any annual Tax accounting period, or other reduction in Liability change (or consent make a request to any extension or waiver of the limitations period applicable taxing authority to change) any material claim or assessment, in each case, with respect to Taxesaspect of its method of accounting for Tax purposes;
(pxiv) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive commence any material right underlawsuit; or settle or compromise (A) any pending or threatened Action set forth on Schedule 7.2(b)(xiv), (B) any Material Contract pending or Permit, threatened Action with any Company Securityholder or any holder of Company Notes or Company Warrants or (C) any other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by pending or threatened Action involving or against the Company or any of its Subsidiaries other than settlements or compromises involving only the monetary payment by the Company and its Subsidiaries in an amount not to exceed $250,000 individually or $500,000 in the ordinary course aggregate with all other such Actions;
(xv) act in any manner that would reasonably be expected to result in any loss, lapse, abandonment, impairment, invalidity or unenforceability of business)any material Company Intellectual Property or otherwise assign, transfer, or dispose of any material Company Intellectual Property;
(xvi) fail to take any action to preserve and maintain all of its material Permits; or
(sxvii) agree to or commit make any commitment to do take any of actions prohibited by this Section7.2(a); provided, that notwithstanding the foregoing. Nothing , (x) nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s operations for purposes of the HSR Act or its Subsidiaries’ operations other Antitrust Laws prior to the Effective Time. Prior Closing Date, (y) no consent of Parent shall be required with respect to any matter set forth in this Agreement to the Effective Timeextent the requirement of such consents would violate any Antitrust Laws and (z) any amendments, consents and waivers or other arrangements necessary to obtain the Company Financing Consent and the Mortgage Consent shall exercisenot be prohibited by this Section 7.2 (and shall instead be governed by Sections 7.4(b) and 7.4(c), consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsrespectively).
Appears in 1 contract
Samples: Merger Agreement (Norwegian Cruise Line Holdings Ltd.)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of ParentParent (which consent shall not be unreasonably withheld, conditioned, or delayed), the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to conduct its business in the ordinary course of businessbusiness consistent with past practice, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees licensees, and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or Agreement, as set forth in Section 6.01 5.01 of the Company Disclosure Letter Letter, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld withheld, conditioned, or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents)Charter Documents;
(b) (i) split, combine combine, or reclassifyreclassify any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem redeem, or otherwise acquire, or offer to repurchase, redeem redeem, or otherwise acquire, any Company Securities or Company Subsidiary Securities;
, or (ciii) declare, set aside aside, or pay any dividend or distribution (whether in cash, stock, property property, or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-wholly owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the CompanySubsidiaries);
(dc) issue, sell, pledge, dispose of of, or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(ed) except as required by applicable Law or pursuant to Section 3.03, by any Company Employee Plan or Contract in effect as of the date of this Agreement (i) increase the compensation of directors, officers payable or employees of that could become payable by the Company or any of its Subsidiaries, (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 past or present Subsidiaries to directors, officers officers, or employees, (iiiii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 as the result of the termination or resignation of any officer or employee, or (iviii) establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any Company Employee PlansPlans or any plan, agreement, program, policy, trust, fund, or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(ge) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances advances, or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(hf) (i) transfer, license, sell, lease lease, or otherwise dispose of any assets (whether by way of merger, consolidation, sale of stock or assets, or otherwise) or pledge, encumber, or otherwise subject to any Lien (other than a Permitted Lien), any assets, including the capital stock or other equity interests in any Subsidiary of the Company, other than in the case of obsolete equipment ; or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(iii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, or other reorganization;
(jg) 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 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-wholly owned Subsidiary of it) or enter into any arrangement having the economic effect of any of the foregoing, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(kh) institute anyexcept as set forth in Section 5.01(h) of the Company Disclosure Letter, enter into or amend or modify in any material respect, or settle consent to the termination of (other than at its stated expiry date), any Company Material Contract or any Company Lease or any other Contract or Company Lease that, if in effect as of the date hereof, would constitute a Company Material Contract or Company Lease;
(i) institute, settle, or compromise any pending or threatened, Legal Actions Action involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 50,000 in the aggregate, other than (i) any Legal Action brought against Parent Parent, Merger Sub or Second Merger Sub arising out of a breach or alleged breach of this Agreement by Parent Parent, Merger Sub or Second Merger Sub, and (ii) the settlement of claims, liabilities, or obligations reserved against on the Company Balance Sheet; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofCompany’s business;
(lj) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(mk) (i) settle or compromise any Tax claim, audit, or assessment regarding the Company or any of its Subsidiaries for an amount in excess of the amount reserved or accrued on the Company Balance Sheet, (ii) make, revoke or change any Tax election, change any annual Tax accounting period, or adopt or change any method of Tax accounting, (iii) amend any Tax Returns or file claims for Tax refunds, (iv) enter into any closing agreement, surrender in writing any right to claim a Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or its Subsidiaries; or (v) enter into any Tax sharing or similar agreement or arrangement (other than customary commercial Contracts the primary purpose of which is unrelated to Taxes) or take any similar action inconsistent with the Company’s or any Subsidiary’s prior course of action that would increase the liability for Taxes of the Company or any of its Subsidiaries for any period after the Closing;
(l) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding understanding, or similar Contract with respect to any joint venture, strategic partnership partnership, co-development arrangement, or alliance;
(nm) authorizeabandon, allow to lapse, sell, assign, transfer, grant any security interest in or otherwise encumber or dispose of any material Company IP, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender grant any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable license to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, IP other than Contracts pursuant to non-exclusive licenses entered into with customers in the ordinary course of business consistent with past practice practice;
(it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering n) incur any expenditures or enter into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, commitment or transaction exceeding $25,000 individually or $50,000 in the aggregate, substantially inconsistent aggregate (other than expenditures incurred in connection with the terms and conditions found in other Contracts of similar size and scope previously entered into transactions contemplated by the Company this Agreement or any of its Subsidiaries incurred in the ordinary course of businessbusiness consistent with past practice); or;
(so) terminate or modify in any material respect, or fail to exercise renewal rights with respect to, any material insurance policy; or (p) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Conduct of Business of the Company. The (a) Conduct of ---------------------------------- ---------- Business by the Company. During the period from the date of this Agreement ----------------------- to the Effective Time of the Merger (except as otherwise specifically required by the terms of this Agreement), the Company shall, and shall cause each its subsidiaries to, act and carry on their respective businesses in the usual, regular and ordinary course of business consistent with past practice and, to the extent consistent therewith, use its Subsidiaries toreasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with customers, suppliers, licensors, licensees, advertisers, distributors and others having business dealings with them to the end that their goodwill and ongoing businesses shall be materially unimpaired at the Effective Time of the Merger. Without limiting the generality of the foregoing, during the period from the date of this Agreement until to the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality Time of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable LawMerger, the Company shall not, nor and shall it not permit any of its Subsidiaries subsidiaries to, without the prior written consent of Parent (which consent shall will not be unreasonably withheld or delayedand shall be deemed granted if not denied within 48 hours after written notice to Parent):
(ai) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(cx) declare, set aside or pay any dividend dividends on, or distribution (whether in cash, stock, property or otherwise) make any other distributions in respect of, any of its capital stock, other than dividends and distributions paid by Designer Preferred Trust on its 6% Convertible Trust Originated Preferred Securities in accordance with the terms of such securities, by a direct or enter into indirect wholly owned subsidiary of the Company to its parent, (y) split, combine or reclassify any Contract with of its capital stock or issue or authorize the issuance of any other securities in respect to the voting 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 or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities;
(ii) authorize for issuance, issue, deliver, sell, transfer, 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 exercisable or exchangeable for, or any rights, warrants, calls, commitments or options to acquire, any such shares, voting securities or convertible securities or any other securities or equity equivalents (including stock appreciation rights) (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company);
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any options to purchase shares of Company Common Stock Option outstanding under Company Stock Plans as of on the date of this Agreement and in accordance with its their present terms, or (ii) in accordance with the Stockholder Rights Agreement);
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers amend its certificate of incorporation, by-laws or employees, except with respect to employees with a base salary of less than $60,000 as the result of the termination or resignation of any officer or employee, or other comparable organizational documents;
(iv) establish, adopt, enter into, amend, terminate, exercise any discretion underacquire or agree to acquire by merging or consolidating with, or take any action to accelerate rights under any Company Employee Plansby purchasing a substantial portion of the stock or assets of, or make by any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwiseother manner, any business or Person any corporation, partnership, joint venture, association or other business organization or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessthereof;
(hv) transfersell, lease, license, sell, lease mortgage or otherwise encumber or subject to any Lien or otherwise dispose of any assets (whether by way of mergerof, consolidation, sale of stock close or shut down its properties or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, other than in the case reasonable sales of obsolete equipment or assets being replaced, in each case inventory in the ordinary course of business consistent with past practiceand assets having an aggregate value not in excess of $250,000, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among except that the foregoing shall not preclude the Company and/or one or more from entering into a sublease on commercially reasonable terms with respect to its distribution centers in North Arlington and Secaucus, New Jersey and the second floor of its wholly-owned Subsidiaries1385 Broadwxx xx Xxx Xxxk City;
(ivi) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(jx) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Personperson, issue or sell any debt securities or options, warrants, calls warrants or other rights to acquire any debt securities of the Company or any of its Subsidiariessubsidiaries, guarantee any debt securities of another Personperson, enter into any “"keep well” " or other Contract agreement to maintain any financial statement condition of any other Person (other than any wholly-owned Subsidiary of it) another person or enter into any arrangement having the economic effect of any of the foregoing, except for short-term borrowings incurred in the ordinary course of business consistent with past practice, (y) amend the terms of any outstanding security in a manner that would increase its obligations thereunder or incur (z) make any Liens loans, advances or capital contributions to, or investments in, any other than Permitted Liens in connection with the foregoingperson, other than to the financing Company or any direct or indirect wholly owned subsidiary of the Company;
(vii) acquire or agree to acquire any assets (other than inventory not in excess of 105% of the monthly cumulative budget set forth on Schedule 4.01(vii)) the value of which, individually or in the aggregate, exceeds $250,000, or make or agree to make any capital expenditures other than those set forth on Schedule 4.01(vii);
(viii) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), except for the payment, discharge or satisfaction, (x) of liabilities or obligations in the ordinary course trade payables of business consistent with past practice practice, (y) liabilities reflected or pursuant reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Recent SEC Documents or (z) other claims, liabilities or obligations in the aggregate in an amount (or having a value in an amount) not in excess of $1,000,000, or waive, release, grant, or transfer any rights of value or modify or change any existing license, lease, contract or other document in any manner that would be material to an the Company or enter into any new outlet lease or license, or any other material lease, contract or other document;
(ix) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization;
(x) enter into any new collective bargaining agreement or any successor collective bargaining agreement to any collective bargaining agreement or amend any existing financing facilitycollective bargaining agreement disclosed in Section 3.01(h)(ii) of the Disclosure Schedule;
(xi) change any accounting principle used by it, except for intercompany loans entered into in between such changes as may be required to be implemented following the date of this Agreement pursuant to generally accepted accounting principles or among rules and regulations of the Company and/or any of its wholly-owned SubsidiariesSEC promulgated following the date hereof;
(kxii) institute any, or settle or compromise any pending litigation (whether or threatenednot commenced prior to the date of this Agreement), Legal Actions involving injunctive relief or other than litigation not in excess of amounts reserved for in the payment most recent consolidated financial statements of monetary damages by the Company included in the Recent SEC Documents or, if not so reserved for, in an aggregate amount not in excess of $250,000 (provided in either case such settlement documents do not involve any material non-monetary obligations on the part of the Company);
(xiii) close, shut down or otherwise eliminate any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereoffacilities;
(lxiv) make enter into (or commit to enter into) any material change new lease or amend or renew any existing lease or purchase or acquire or enter into any agreement to purchase or acquire any real estate or terminate any existing lease other than leases for machinery or equipment requiring an aggregate annual commitment not in any method excess of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law$100,000;
(mxv) enter into change any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material annual Tax accounting period, change any method of Tax accounting, file any material amended Tax Returnreturn, enter into any closing agreement relating to any material closing agreementTax, settle any material Tax claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability Tax refund or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment, in each caseif such acts, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company either separately or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with would have the terms and conditions found in other Contracts effect of similar size and scope previously entered into by materially increasing the Tax liability of or materially reducing the Tax assets of the Company or any of its Subsidiaries in subsidiaries or of Parent or any of its subsidiaries;
(xvi) except as contemplated by Section 5.14, change the ordinary course composition, fill any vacancies or increase the size of business)the Company's Board of Directors; or
(sxvii) agree authorize any of, or commit or agree to do take any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectlyof, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsforegoing actions.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company agrees to conduct the business of Company and its Subsidiaries, except as expressly contemplated by this Agreement or as required by applicable Law or with to the prior written extent that Parent shall otherwise consent of Parentin writing, conduct its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to pay the debts and Taxes of businessthe Company and its Subsidiaries when due, to pay or perform other obligations when due, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries towith such business, use its their commercially reasonable efforts consistent with past practices to preserve substantially intact its the present business organizations of the Company and its Subsidiaries’ business organization, to keep available the services of its the present officers and key employees of the Company and its Subsidiaries’ current officers Subsidiaries and employees, to preserve its the relationships of the Company and its Subsidiaries’ present relationships Subsidiaries with customers, suppliers, distributors, licensors, licensees and other Persons others having business relationships dealings with itthem. Without limiting The Company shall promptly notify Parent of any event or occurrence or emergency not in the generality ordinary course of business of the foregoing, between Company and any material event involving the Company or any of its Subsidiaries 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, except . Except as otherwise expressly contemplated by this Agreement or and except as expressly set forth in Section 6.01 SECTION 4.1 of the Company Disclosure Letter or as required by applicable LawDisclosures Schedule, neither the Company shall not, nor shall it permit any of its Subsidiaries toshall, without the prior written consent of the Chief Financial Officer of Parent or his designee (which consent may be requested by e-mail or facsimile transmission and shall not be unreasonably withheld delivered or delayed):denied within two (2) business days of the receipt of such request at the address set forth in SECTION 9.1(A) hereof), from and after the date of this Agreement until the earlier of the termination of this Agreement or the Effective Time:
(a) amend make any expenditures or propose to amend its certificate enter into any commitment or transaction exceeding $50,000 individually or $100,000 in the aggregate or any commitment or transaction of incorporation or by-laws (or other comparable organizational documents)the type described in SECTION 2.9 hereof;
(bi) 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, except in the ordinary course of business consistent with past practices, (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 consistent with past practices, (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 or any of its Subsidiaries to its customers or licensees, or the pricing or royalties set or charged by persons who have licensed Intellectual Property to the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practices;
(c) 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 or any of its Subsidiaries;
(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 or settle any litigation;
(f) 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 split, combine or reclassifyreclassify any 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 Company Capital Stock (except for the issuance of Company Common Stock pursuant to the exercise of Company Options outstanding as of the date hereof or Company Options granted after the date hereof without breaching the terms of this Agreement), or repurchase, redeem or otherwise acquire, directly or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting ofindirectly, any shares of its capital stock Company Capital Stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company options, warrants or other direct or indirect wholly-owned Subsidiaries of rights exercisable therefor) except in accordance with the Company)agreements evidencing Company Unvested Common Stock;
(dg) other than the grant of Company Options to new employees hired after the date hereof without breaching the terms of this Agreement, issue, sellgrant, pledgedeliver or sell or authorize or propose the issuance, dispose of grant, delivery or encumber sale of, or purchase or propose the purchase of, any Company Securities Capital Stock or Company Subsidiary Securitiesany securities convertible into, or subscriptions, rights, warrants or options to acquire, or other than (i) agreements or commitments of any character obligating it to issue or purchase any such shares or other convertible securities, except for the issuance of shares of Company Common Stock upon pursuant to the exercise of any Company Stock Option Options outstanding under Company Stock Plans as of on the date hereof or Company Options granted after the date hereof without breaching the terms of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(eh) except as required by applicable Law cause or pursuant permit any amendments to Section 3.03the certificate of incorporation, bylaws or other organizational documents of the Company or any of its Subsidiaries;
(i) increase 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 compensation aggregate, to the business of directorsthe Company or any of its Subsidiaries;
(j) sell, officers lease, license or employees otherwise dispose of any of its tangible properties or assets, including without limitation the sale of any accounts receivable of the Company or any of its Subsidiaries, except properties or assets (iiwhether tangible or intangible) enter into any new or amend in any material respect, any existing employment, severance, retention or change in control agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does which are not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising Intellectual Property and only in the ordinary course of business, business and consistent with past practices;
(yk) advances incur any indebtedness (other than existing lending facilities) or guarantee any indebtedness or issue or sell any debt securities or guarantee any debt securities of others;
(l) grant any loans to employees for expenses reimbursable under others or purchase debt securities of others or amend the Company and/or its Subsidiaries’ business expense reimbursement policy, and terms of any outstanding loan agreement;
(zm) advances other than in the ordinary course of businessbusiness consistent with past practices, grant any severance or termination pay (in cash or otherwise) to any Employee, including any officer, except payments made pursuant to standard written agreements outstanding on the date hereof and disclosed in the Disclosure Schedule;
(hn) transferother than normal year-end salary increases individually no greater than seven percent (7%) of base salary or spot bonuses in the ordinary course of business consistent with past practices and not in excess of $5,000 in any individual case, licenseadopt or amend any Company Employee Plan, sellenter into any employment contract, lease pay or otherwise dispose agree to pay any bonus or special remuneration to any director or Employee, or increase or modify the salaries, wage rates, or other compensation (including, without limitation, any equity-based compensation) of its Employees except payments made pursuant to standard written agreements outstanding on the date hereof and disclosed in SECTION 4.1(n) of the Disclosure Schedule or except to the extent required to conform any such Company Employee Plan with the Uruguay Round Agreements Act, the Small Business Job Protection Act of 1996, the Uniformed Services Employment and Reemployment Rights Act of 1994, the Taxpayer Relief Act of 1997 and the Internal Revenue Service Restructuring and Reform Act of 1998 or Employee Agreement to the requirements of applicable law or as required by this Agreement;
(o) revalue any of its assets (whether by way of merger, consolidation, sale of stock tangible or assets, or otherwiseintangible), including without limitation writing down the capital stock value of inventory or other equity interests in any Subsidiary of the Company, writing off notes or accounts receivable other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice;
(p) pay, discharge, waive or satisfy, in each case excluding an amount in excess of $50,000 in any transferone case, licenseor $100,000 in the aggregate, saleany claim, lease liability, right or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other disposition than the payment, discharge or satisfaction in connection with the ordinary course of business of liabilities reflected or reserved against in the Current Balance Sheet;
(q) make or change any transaction between material election in respect of Taxes, adopt or among 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 extension (other than an extension attributable to a properly filed extension of time for the filing of any tax returns) or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(r) enter into any strategic alliance, affiliate agreement or joint marketing arrangement or agreement;
(s) take any action to accelerate the vesting schedule of any of the outstanding Company Options, Company Unvested Common Stock or Company Common Stock;
(t) except as set forth on SECTION 4.1(t) of the Disclosure Schedule, hire any Employees, or encourage any Employees to resign from the Company and/or one or more any of its wholly-owned Subsidiaries;
(iu) adopt promote any employees or effect a plan change the employment status or titles of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 the employees of the Company or any of its Subsidiaries;
(v) alter, 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 commitment to alter, its interest in any of the foregoingSubsidiary, corporation, association, joint venture, partnership or incur any Liens other than Permitted Liens business entity in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among which the Company and/or directly or indirectly holds any of its wholly-owned Subsidiariesinterest;
(kw) institute anycancel, amend or settle or compromise renew any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practicesinsurance policy, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice practices;
(it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering x) enter into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that areagreement to purchase or sell any interest in real property, grant any security interest in the aggregateany real property, substantially inconsistent enter into any lease, sublease, license or other occupancy agreement with respect to any real property or materially alter, amend, modify or terminate any of the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business)Lease Agreements; or
(sy) take, or agree in writing or commit otherwise to do take, any of the foregoing. Nothing contained actions described in this Agreement shall give ParentSECTIONS 4.1(a) through 4.1(x) hereof, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, any other action that would (i) prevent the Company shall exercisefrom performing, consistent with or cause the terms Company not to perform, its covenants hereunder or (ii) cause or result in any of its representations and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationswarranties contained herein being untrue or incorrect in any material respect.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Documentum Inc)
Conduct of Business of the Company. The Company shall, (a) From and shall cause each of its Subsidiaries to, during the period from after the date of this Agreement until the Effective Timeearlier of the Closing or the termination of this Agreement in accordance with its terms, the Company shall, and the Company shall cause its Subsidiaries to, except as expressly contemplated by this Agreement or any Ancillary Document, as required by applicable Law Law, as set forth on Section 5.1(a) of the Company Disclosure Schedules, or with as consented to in writing by CHFW (it being agreed that any request for a consent shall not be unreasonably withheld, conditioned or delayed), (i) operate the prior written consent business of Parent, conduct its business the Group Companies in the ordinary course of business, and, to the extent consistent therewith, the Company shall, in all material respects and shall cause each of its Subsidiaries to, (ii) use its commercially reasonable efforts to maintain and preserve substantially intact its and its Subsidiaries’ in all material respects the business organization, to keep available assets, properties and material business relations of the services of its and its Subsidiaries’ current officers and employeesGroup Companies, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. taken as a whole.
(b) Without limiting the generality of the foregoing, between from and after the date of this Agreement and until the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 earlier of the Company Disclosure Letter Closing or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company);
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date termination of this Agreement in accordance with its terms, the Company shall, and the Company shall cause its Subsidiaries to, except as expressly contemplated by this Agreement or (ii) in accordance with the Stockholder Rights Agreement;
(e) except any Ancillary Document, as required by applicable Law Law, as set forth on Section 5.1(b) of the Company Disclosure Schedules or pursuant as consented to Section 3.03in writing by CHFW (such consent not to be unreasonably withheld, conditioned or delayed) not do any of the following:
(i) increase the compensation of directorsdeclare, officers set aside, make or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with pay a base salary of less than $60,000 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 accelerate rights under any Company Employee Plansdividend on, or make any contribution to other distribution or payment in respect of, any Company Employee Plan;
(f) hire any officer or employee, except for the replacement Equity Securities of any current employee whose employment with Group Company or repurchase any outstanding Equity Securities of any Group Company, other than dividends or distributions, declared, set aside or paid by any of the Company’s Subsidiaries to the Company or any Subsidiary thereof is terminated that is, directly or who resigns for any reasonindirectly, provided that such replacement employee’s annual base salary does not exceed $60,000wholly owned by the Company;
(gii) acquire(A) merge, by mergerconsolidate, consolidationcombine or amalgamate any Group Company with any Person or (B) purchase or otherwise acquire (through acquisition, acquisition license, joint venture, collaboration or otherwise) any Equity Securities, assets or other rights of stock any corporation, partnership, association or assetsother business entity or organization or division thereof;
(iii) adopt any amendments, supplements, restatements or modifications to any Group Company’s Governing Documents, the Company Stockholders Agreements;
(iv) (A) sell, assign, abandon, lease, license or otherwise dispose of any material assets or properties of the Group Companies, including any Intellectual Property Rights (whether through a sale, license, joint venture, collaboration or otherwise), other than inventory or obsolete equipment in the ordinary course of business or nonexclusive licenses in the ordinary course of business, or otherwise(B) create, subject or incur any Lien any material assets or properties of the Group Companies (other than Permitted Liens or nonexclusive licenses in the ordinary course of business);
(v) transfer, issue, sell, grant or otherwise directly or indirectly dispose of, or subject to a Lien, (A) any Equity Securities of any Group Company or (B) any options, warrants, rights of conversion or other rights, agreements, arrangements or commitments obligating any Group Company to issue, deliver or sell any Equity Securities of any Group Company; other than the issuance of shares of the applicable class of capital stock of the Company upon the exercise or conversion of any Company Options on the date of this Agreement in accordance with the terms of the Company Equity Plan and the underlying grant, award or similar agreement or the issuance of Company Options or Restricted Stock covering up to 600,000 Company Common Shares under the Company Equity Plan;
(vi) incur, create or assume any Indebtedness, other than ordinary course trade payables;
(vii) (A) amend, modify or terminate any Material Contract (excluding, for the avoidance of doubt, any expiration or automatic extension or renewal of any such Material Contract pursuant to its terms or entering into additional work orders pursuant to, and in accordance with the terms of, any Material Contract in the ordinary course of business and consistent with past practice), (B) waive any material benefit or Person right under any Material Contract or division thereof or (C) enter into any Contract that would constitute a Material Contract;
(viii) make any loans, advances or capital contributions to to, or guarantees for the benefit of, or any investments in in, any Person, except for other than (wA) intercompany loans, advances loans or capital contributions entered into in between or among the Company and/or and any of its wholly-wholly owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, Subsidiaries and (zB) advances the reimbursement of expenses of employees in the ordinary course of business;
(hix) transfer, license, sell, lease or otherwise dispose except as required under the terms of any assets Employee Benefit Plan of any Group Company that is set forth on the Section 3.11(a) of the Company Disclosure Schedules or required under applicable Law, (whether by way A) amend, modify, adopt, enter into or terminate any material Employee Benefit Plan of mergerany Group Company or any material benefit or compensation plan, consolidationpolicy, sale program or Contract that would be an Employee Benefit Plan if in effect as of stock the date of this Agreement, (B) increase the compensation or assetsbenefits payable to any current or former director, manager, officer, employee, individual independent contractor or other service provider of any Group Company, (C) take any action to accelerate any payment, right to payment, or otherwise)benefit, including or the capital stock funding of any payment, right to payment or benefit, payable or to become payable to any current or former director, manager, officer, employee, individual independent contractor or other equity interests in service provider of any Subsidiary Group Company, (D) waive or release any noncompetition, non-solicitation, no-hire, nondisclosure or other restrictive covenant obligation of any current or former director, manager, officer, employee, individual independent contractor or other service provider of any Group Company, (E) terminate without cause the employment of any director, manager or officer (provided that the Company agrees to provide prompt written notice to CHFW of any termination of a director, manager or officer for cause) of any Group Company or terminate the employment of any group of employees of any Group Company, (F) hire any director or officer, or hire any other individuals outside of the Companyapproved budget and hiring plan attached to Section 5.1(b)(ix)(F) of the Company Disclosure Schedules, (G) initiate any Proceeding with respect to any current or former director, manager, officer, employee, individual independent contractor, or other service provider of the Group Companies;
(x) make, change or revoke any material election concerning Taxes, enter into any material Tax closing agreement, settle any material Tax claim or assessment, or consent to any extension or waiver of the limitation period applicable to or relating to any material Tax claim or assessment, other than in the case of obsolete equipment any such extension or assets being replaced, in each case waiver that is obtained in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiariesbusiness;
(ixi) adopt enter into any settlement, conciliation or effect similar Contract the performance of which would involve the payment by the Group Companies in excess of $2,000,000, in the aggregate, or that imposes, or by its terms will impose at any point in the future, any material, non-monetary obligations on any Group Company (or CHFW or any of its Affiliates after the Closing);
(xii) authorize, recommend, propose or announce an intention to adopt, or otherwise effect, a plan of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, reorganization or other reorganizationsimilar transaction involving any Group Company;
(jxiii) incur change any indebtedness for borrowed money or guarantee Group Company’s methods of accounting in any such indebtedness of another Personmaterial respect, 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, than changes that are made in accordance with PCAOB standards;
(xiv) enter into any “keep well” Contract with any broker, finder, investment banker or other Contract Person under which such Person is or will be entitled to maintain any financial statement condition of any brokerage fee, finders’ fee or other Person (other than any wholly-owned Subsidiary of it) or enter into any arrangement having the economic effect of any of the foregoing, or incur any Liens other than Permitted Liens commission in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as transactions contemplated by this Agreement;
(rxv) enter into, terminate, modify or waive make any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course Change of business consistent with past practice (it being understood that, for the purposes Control Payment that is not set forth on Section 3.11(d) of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business)Disclosure Schedules; or
(sxvi) agree enter into any Contract to take, or commit cause to do be taken, any of the foregoingactions set forth in this Section 5.1. Nothing contained Notwithstanding anything in this Section 5.1 or this Agreement to the contrary, nothing set forth in this Agreement shall give ParentCHFW, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations of the Group Companies prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsClosing.
Appears in 1 contract
Samples: Business Combination Agreement (Consonance-HFW Acquisition Corp.)
Conduct of Business of the Company. The Except for matters set forth in Section 6.01 of the Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except as Disclosure Letter or otherwise expressly contemplated permitted or required by this Agreement or Agreement, as required by applicable Law or with the prior written consent of ParentParent (which consent shall not be unreasonably withheld, conduct its business in delayed or conditioned), from the ordinary course of business, and, Agreement Date to the extent consistent therewithearlier of the Offer Acceptance Time and the termination of this Agreement in accordance with its terms (the “Pre-Closing Period”), the Company shall, and shall cause each of its the Company Subsidiaries to, use its commercially reasonable efforts to (w) conduct its business in the ordinary course, (x) preserve substantially intact its and its Subsidiaries’ present business organization, to (y) keep available the services of its and its Subsidiaries’ current present officers and employees, to employees (at the vice-president level and above) and (z) preserve its and its Subsidiaries’ present relationships and goodwill with customers, suppliers, distributors, licensors, licensees licensees, contractors, partners and other Persons others having material business relationships dealings with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective TimeIn addition, except as otherwise expressly contemplated by this Agreement or as for matters set forth in Section 6.01 of the Company Disclosure Letter or as otherwise expressly permitted or required by this Agreement or required by applicable Law, during the Pre-Closing Period, the Company shall not, nor and shall it permit cause the Company Subsidiaries not to, do any of its Subsidiaries to, the following without the prior written consent of Parent (which consent shall not be unreasonably withheld withheld, delayed or delayedconditioned):
(a) amend enter into any new material line of business or propose enter into any agreement, arrangement or commitment that materially limits or otherwise restricts the Company or its affiliates, including, following the Merger Closing, Parent and its affiliates (other than in the case of Parent and its affiliates, due to amend the operation of Parent’s or its certificate affiliates’ own Contracts), from time to time engaging or competing in any line of incorporation business or by-laws (or other comparable organizational documents)in any geographic area;
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(ci) declare, set aside aside, establish a record date in respect of, accrue or pay any dividend dividends on, or distribution make any other distributions (whether in cash, stock, property equity securities or otherwiseproperty) in respect of, any of its capital stock, other than dividends and distributions of cash by a direct or enter into indirect wholly owned subsidiary of the Company to its parent, (ii) split, combine or reclassify any Contract with of its capital stock or issue or authorize the issuance of any other securities in respect to the voting of, any in lieu of or in substitution for shares of its capital stock or (other than dividends iii) repurchase, redeem, offer to redeem or distributions from its direct otherwise acquire, directly or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company);
(d) issue, sell, pledge, dispose of or encumber indirectly any Company Securities or Company Subsidiary Securities, except for (A) acquisitions of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options outstanding on the Agreement Date in order to pay the exercise price of Company Stock Options, (B) the withholding of shares of Company Common Stock to satisfy Tax obligations with respect to awards granted pursuant to the Company Stock Plans and (C) the acquisition by the Company of Company Stock Options and Company RSUs in connection with the forfeiture of such awards, in each case, in accordance with their terms;
(c) issue, grant, deliver, sell, authorize, pledge or otherwise encumber any Company Securities or any Company Subsidiary Securities, other than (i) the issuance of shares issuances of Company Common Stock upon the exercise of any Company Stock Option outstanding Options or purchase rights under the Company Stock Plans as ESPP or the settlement of the date of this Agreement Company RSUs, in each case, in accordance with their terms;
(d) amend its termscertificate of incorporation, bylaws or other comparable organizational documents (ii) in accordance with the Stockholder Rights Agreementexcept for immaterial or ministerial amendments);
(e) form any subsidiary or acquire or agree to acquire, directly or indirectly, in a single transaction or a series of related transactions, whether by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any assets outside of the ordinary course of business, any business or any corporation, partnership, limited liability company, joint venture, association or other business organization or division thereof or any other Person (other than the Company), if the aggregate amount of consideration paid or transferred by the Company or any Company Subsidiary would exceed $250,000;
(f) except as required by applicable Law or pursuant to Section 3.03the terms of any Company Benefit Plan or Company Benefit Agreement, in each case, as in effect on the Agreement Date, (i) increase adopt, enter into, establish, terminate, amend or modify any collective bargaining agreement, Company Benefit Plan or Company Benefit Agreement (or plan or arrangement that would be a Company Benefit Plan or Company Benefit Agreement if in effect on the compensation of directorsAgreement Date), officers (ii) grant to any director, employee or employees individual service provider of the Company or any of its SubsidiariesCompany Subsidiary any increase in base or other compensation, (iiiii) grant to any director, employee or individual service provider of the Company or any Company Subsidiary any increase in severance or termination pay, (iv) pay or award, or commit to pay or award, any bonuses or incentive compensation, (v) enter into any new or amend employment, retention, consulting, change in any material respect, any existing employmentcontrol, severance, retention or change in control termination agreement with any director, employee or individual service provider of its past the Company or present directors, officers or employeesany Company Subsidiary, (iiivi) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate any rights or benefits under any Company Employee PlansBenefit Plan or Company Benefit Agreement, or make the funding of any contribution to payments or benefits under any Company Employee Plan;
Benefit Plan or Company Benefit Agreement, or (fvii) hire any officer (other than to replace an employee or employee, except individual service provider whose employment or service has terminated) or terminate (other than for cause) the replacement employment or service of any current employee whose employment or individual service provider at the level of vice-president or above or with an annual base salary at or above $300,000; provided that this Section 6.01(f) shall not restrict the Company or any Company Subsidiary thereof from entering into an offer letter or consulting agreement in the ordinary course with any employee or individual service provider that is terminated newly hired or who resigns engaged in accordance with the foregoing clause (vii) or providing to such employee or individual service provider compensation and benefits consistent with its past practice for similarly situated employees and individual service providers (including permitting any reason, provided that such replacement employee’s annual base salary does not exceed $60,000employees and individual service providers to be eligible for the benefits made generally available to non-executive employees);
(g) acquiremake any change in accounting methods, principles or practices, except as may be required (i) by mergerGAAP (or any authoritative interpretation thereof), consolidationincluding pursuant to standards, acquisition guidelines and interpretations of stock the Financial Accounting Standards Board or assetsany similar organization or (ii) by Law, including Regulation S-X promulgated under the Securities Act, in each case, as agreed to by the Company’s independent public accountants;
(h) sell, lease (as lessor), license or otherwise transfer (including through any “spin-off”), or otherwisepledge, encumber or otherwise subject to any Lien (other than a Permitted Lien), any business properties or Person assets (other than Intellectual Property) except (i) sales or division thereof other dispositions of inventory and excess or make any loans, advances obsolete properties or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising assets in the ordinary course of business, (yii) advances pursuant to employees for expenses reimbursable under Contracts to which the Company and/or its Subsidiaries’ business expense reimbursement policyis a party made available to Parent and in effect prior to the Agreement Date or (iii) properties or assets having a fair market value of less than $250,000 in the aggregate;
(i) sell, assign, license or otherwise transfer any Company Intellectual Property, except for (i) licenses (including sublicenses) to Intellectual Property granted in the ordinary course of business, (ii) pursuant to Standard IP Contracts, (iii) pursuant to Contracts to which the Company is a party made available to Parent and in effect prior to the Agreement Date or (ziv) advances abandonment or other disposition of any Company Registered Intellectual Property that is at the end of the applicable statutory term, in the ordinary course of prosecution or otherwise in the ordinary course of business;
(hj) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt incur or effect a plan materially modify the terms of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(jincluding by extending the maturity date thereof) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls warrants or other rights to acquire any debt securities of the Company or any of its SubsidiariesCompany, guarantee any debt securities of another Person, enter into any “keep well” or other Contract agreement to maintain any financial statement condition of any other another Person (other than any wholly-owned Subsidiary of it) or enter into any arrangement having the economic effect of any of the foregoingforegoing or (ii) make any loans, advances or capital contributions to, or incur investments in, any Liens other than Permitted Liens in connection with the foregoingPerson, other than to or in (A) the financing Company, (B) any acquisition not in violation of ordinary course trade payables consistent with past practice Section 6.01(e) or (C) any person pursuant to an existing financing facility, except for intercompany loans entered into in between or among any advancement obligations under the Company and/or any of its wholly-owned SubsidiariesCharter, Company Bylaws or indemnification agreements as in effect on or prior to the Agreement Date;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; providedin accordance with the Company’s capital expenditure budget made available to Parent, that neither the Company nor any of its Subsidiaries shall settle make or agree to settle make any Legal Action which settlement involves a conduct remedy capital expenditure or injunctive or similar relief or has a material restrictive impact on expenditures that in the business aggregate are in excess of the amount set forth in Section 6.01(k) of the Company or any Affiliate thereofDisclosure Letter;
(l) make pay, discharge, settle, compromise or satisfy (i) any material change pending or threatened claims, liabilities or obligations relating to a Proceeding (absolute, accrued, asserted or unasserted, contingent or otherwise), including any Proceeding initiated by the Company, other than any such payment, discharge, settlement, compromise or satisfaction of a claim solely for money damages in the ordinary course of business in an amount not to exceed $250,000 per payment (assuming the payment in full or all future fixed or contingent payments), discharge, settlement, compromise or satisfaction or $1,000,000 in the aggregate for all such payments, discharges, settlements, compromises or satisfactions or (ii) any method of financial accounting principles litigation, arbitration, proceeding or practices, except for any change required dispute that relates to the Transactions (which shall be governed by a change in GAAP or applicable LawSection 7.08 hereof);
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any annual Tax accounting period or adopt or change any material method of Tax accounting, file any amended material amended Tax Return, enter into any material closing agreementagreement within the meaning of Section 7121 of the Code (or any similar provision of state, local or foreign Law), or settle or compromise any material claim Tax liability or assessmentrefund;
(n) amend, surrender cancel or terminate any right to claim material insurance policy naming the Company or any Company Subsidiary as an insured, a material refundbeneficiary or a loss payable payee without obtaining comparable substitute insurance coverage;
(o) adopt a plan or agreement of complete or partial liquidation or dissolution, offset merger, consolidation, restructuring, recapitalization or other reduction in Liability or consent to any extension or waiver of reorganization (other than the limitations period applicable to any material claim or assessment, in each case, with respect to TaxesMerger);
(p) (i) abandon, cancel, fail to maintain renew or permit to lapse (A) any material Company Registered Intellectual Property owned or purported to be owned by the Company (except in full force and effect the ordinary course of prosecution) or (B) any material insurance policies covering registered Intellectual Property to the extent that the Company has the right to take or cause to be taken such action pursuant to the terms of the applicable Contract under which such Intellectual Property is licensed to the Company, (ii) fail to renew (to the extent renewable at the option of the Company) or terminate any Contract under which material Intellectual Property is licensed to the Company, (iii) disclose to any third party, other than under a confidentiality agreement or other legally binding confidentiality undertaking, any material Trade Secret of the Company or its Subsidiaries and its any Company Subsidiary that is included in the Company Intellectual Property owned or their properties, assets and businesses purported to be owned by the Company in a form and amount consistent way that results in loss of material Trade Secret protection thereon, except for any such disclosures made as a result of publication of a Patent application filed by the Company or any Company Subsidiary or in connection with past practiceany required regulatory filing or (iv) sell, transfer, license or otherwise encumber any Company Intellectual Property owned or purported to be owned by the Company, other than non-exclusive licenses ancillary to research, development, manufacture, clinical testing, sale, distribution or commercialization activities relating to products or services entered into in the ordinary course of business;
(q) adoptexcept in the ordinary course of business or in connection with any transaction to the extent specifically permitted by any other subclause of this Section 6.01, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, terminate or modify or waive in any material right respect, or expressly release any material rights under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood any Contract that, for if existing on the purposes of this subsectionAgreement Date, “consistent would have been a Material Contract;
(r) participate in any scheduled meetings or scheduled teleconferences with, or correspond in writing, communicate or consult with past practice” shall not include entering into the FDA or any Contract having terms similar Governmental Entity without providing Parent (to the extent reasonably practicable and conditions (including terms permitted under applicable Law, and conditions regarding pricing and Liabilitiesexcluding routine administrative communications, or immaterial communications) that arewith prior written notice and, within 24 hours from the time such written notice is delivered, the opportunity to consult with the Company with respect to such correspondence, communication or consultation, in each case to the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered extent permitted by applicable Law;
(s) enter into a research or collaboration arrangement that provides for payments by or to the Company or any Company Subsidiary in excess of its Subsidiaries $300,000 in any 12-month period;
(t) (i) commence any clinical study of which Parent has not been informed prior to the ordinary course Agreement Date, (ii) unless mandated by any Regulatory Authority, discontinue, terminate, suspend or materially modify any ongoing clinical study, (iii) discontinue, terminate, suspend or materially modify any ongoing IND-enabling preclinical study without first consulting with Parent in good faith, or (iv) accelerate or delay public disclosure of business)the results of any ongoing clinical study from any release dates publicly announced prior to the Agreement Date; or
(su) authorize, commit or agree or commit to do take any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsforegoing actions.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of ParentFCI, conduct its business in the ordinary course of businessbusiness consistent with past practice, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employeesemployees (including, without limitation, Xxxxxxx Xxxxxxx, Xxxxxx Xxxxxxx, Xxxxx Xxxxxxxx, and Xxx Xxxxx), to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in on Section 6.01 5.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent (including by e-mail) of Parent FCI (which consent shall not be unreasonably withheld withheld, conditioned or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(b) (i) split, combine or reclassifyreclassify any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
, or (ciii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the CompanySubsidiary);
(dc) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock Option in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with its their terms, or (iiiii) in accordance with the Stockholder Rights issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement;
(ed) except as required by applicable Law or pursuant to Section 3.03by any Company Employee Plan or Contract in effect as of the date of this Agreement, (i) increase the compensation of directors, officers or employees of payable by the Company or any of its SubsidiariesSubsidiaries to directors, officers or employees, other than increases in compensation made in the ordinary course of business consistent with past practice, (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 past or present directors, officers or employees, or (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee PlansPlans or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this 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;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(ge) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into Person in between or among the Company and/or any excess of its wholly-owned Subsidiaries, (x) trade payables arising $100,000 in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessaggregate;
(hi) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in provided that the case foregoing shall not prohibit the Company and its Subsidiaries from transferring, licensing, selling, leasing or disposing of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(iii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(jg) 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing repayment of ordinary course trade payables consistent with past practice indebtedness or the incurrence of indebtedness (including borrowings under existing lines of credit) under the Japanese Credit Facilities included in the calculation of adjustments to aggregate Merger Consideration pursuant to an existing financing facility, except for intercompany loans entered into in between or among Section 2.04(b)(i) and other than mandatory prepayments required under Section 6.2.2(b) of the Company and/or any of its wholly-owned SubsidiariesCredit Agreement;
(kh) institute anyexcept in the ordinary course of business, enter into or amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any Company Material Contract or any Lease with respect to material Real Estate or any other Contract or Lease that, if in effect as of the date hereof would constitute a Company Material Contract or Lease with respect to material Real Estate hereunder;
(i) institute, settle or compromise any Legal Actions pending or threatenedthreatened before any arbitrator, Legal Actions court or other Governmental Entity involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than (i) any Legal Action brought against Parent or Merger Sub the Forsyth Parties arising out of a breach or alleged breach of this Agreement by Parent the Forsyth Parties, and (ii) the settlement of claims, liabilities or Merger Subobligations reserved against on the most recent balance sheet of the Company included in the Company SEC Documents; provided, provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofCompany’s business;
(lj) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(mk) (i) settle or compromise any material Tax claim, audit or assessment, (ii) make or change any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, (iii) amend any material Tax Returns or file claims for material Tax refunds, or (iv) enter into any material closing agreement, surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or its Subsidiaries;
(l) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(nm) authorizeexcept in connection with actions permitted by Section 5.04 hereof, take any action to exempt any Person from, or make any commitment with respect acquisition of securities of the Company by any Person not subject to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change state takeover statute or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim similar statute or assessment, surrender any right regulation that applies to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, Company with respect to Taxes;
(p) fail to maintain a Takeover Proposal or otherwise, including the restrictions on “business combinations” set forth in full force and effect material insurance policies covering Section 203 of the Company DGCL, except for the Forsyth Parties or its any of their respective Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereofAffiliates, or implement a rights plan, “poison pill” or similar arrangement, except as the transactions contemplated by this Agreement;
(rn) enter intoabandon, terminateencumber, modify convey title (in whole or waive in part), exclusively license or grant any right or other licenses to material right under, any Material Contract or PermitCompany IP, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or;
(so) make any capital expenditure in breach of Section 11.14.5 of the Credit Agreement; or (p) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Conduct of Business of the Company. The Company shall(a) Except as set forth on Schedule 6.1(a) or except to the extent that Parent shall otherwise consent in writing, and shall cause each until the earlier of its Subsidiaries to, during the period from Effective Time or the date termination of this Agreement until pursuant to Section 10.1, the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, Company shall conduct its business and operations in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, pay the debts and Taxes of businessthe Company when due, pay or perform its other obligations when due, and, to the extent consistent therewithwith such business, preserve intact the Company shallCompany’s present business organizations, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its the Company’s present officers, key employees and its Subsidiaries’ current officers consultants and employees, to preserve its and its Subsidiaries’ present the Company’s relationships with customers, suppliers, distributors, licensors, licensees licensees, and other Persons others having business relationships dealings with it. Without limiting , all with the generality goal of preserving unimpaired the Company’s goodwill and ongoing businesses at the Effective Time.
(b) Except (x) as set forth on Schedule 6.1(a), (y) to the extent that Parent shall otherwise consent in writing, or (z) as contemplated hereunder or under the Ancillary Agreements, until the earlier of the foregoing, between Effective Time or the date termination of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in pursuant to Section 6.01 of the Company Disclosure Letter or as required by applicable Law10.1, the Company shall not, nor shall it :
(i) cause or permit any amendments to its Articles of its Subsidiaries toIncorporation, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (Bylaws or other comparable organizational documents)documents of the Company;
(bii) declare, set aside, or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any Company Common Stock, or split, combine or reclassifyreclassify any 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 Company Common Stock, or repurchase, redeem or otherwise acquire, directly or offer to repurchase, redeem or otherwise acquireindirectly, any shares of Company Securities Common Stock (or Company Subsidiary Securitiesoptions, warrants or other rights exercisable therefor);
(ciii) declareissue, set aside grant, deliver or sell or authorize or propose the issuance, grant, delivery or sale of, or purchase or propose the purchase of, any shares of capital stock of the Company or any securities convertible into, or subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating it to issue or purchase any such shares or other convertible securities except for issuances of Company Common Stock pursuant to the exercise of outstanding Company Options;
(iv) grant any severance or termination pay any dividend or distribution (whether in cash, stock, property equity or otherwise) in respect ofto any Company Employee except pursuant to Contracts outstanding, or policies existing, on the date hereof and set forth on Schedule 6.1(b) (iv), or adopt any new severance plan, or amend or modify or alter in any respect any such severance plan, agreement or arrangement existing on the date hereof, or grant any equity-based compensation;
(v) adopt or amend any Company Employee Plan, enter into any Contract with respect employment contract, pay or agree to pay any special bonus or special remuneration to any Company Employee, or increase the salaries, wage rates, or other compensation of its Company Employees except payments made pursuant to standard written agreements outstanding on the date hereof and disclosed on Schedule 6.1(b)(v) or except to the voting ofextent required by law;
(vi) except as set forth on Schedule 6.1(b) (vi), any shares of its capital stock hire or terminate (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company);
(dfor cause) issue, sell, pledge, dispose of or encumber any Company Securities Employees, or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of knowingly encourage any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant Employees to Section 3.03, (i) increase the compensation of directors, officers or employees of resign from the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee PlanAffiliate;
(fvii) hire waive any officer stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans, except for the replacement acceleration of any current employee whose employment vesting pursuant to agreements with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000in effect as of the Signing Date;
(gviii) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, incur any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for indebtedness (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) other than trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(ipractices) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Personothers;
(ix) pay, enter into discharge or satisfy, in an amount in excess of $10,000 in any “keep well” one case, or other Contract to maintain $20,000 in the aggregate, any financial statement condition of any other Person (Liability, other than the payment, discharge or satisfaction of Liabilities reflected or reserved against in the Current Balance Sheet;
(x) make any wholly-owned Subsidiary of itexpenditures (including any capital expenditures) or enter into any arrangement having commitment or transaction exceeding $10,000 individually or $20,000 in the economic effect aggregate;
(xi) sell, lease, license or otherwise dispose of any of its properties or assets (whether tangible or intangible), including without limitation the foregoingsale of any accounts receivable of the Company, or incur any Liens other than Permitted Liens except the sale of Company’s products and services in connection with the foregoing, other than the financing of ordinary course trade payables of business consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or practices;
(xii) revalue any of its wholly-owned Subsidiariesassets (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 and consistent with GAAP;
(kxiii) institute anymake or change any election in respect of Taxes, adopt or settle change any accounting method or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, practices (other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change as required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreementGAAP), settle any material claim or assessmentassessment in respect of Taxes, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations limitation period applicable to any material claim or assessment, assessment in each case, with respect to of Taxes;
(pxiv) fail to maintain in full force and effect material insurance policies covering waive or release any right or claim of the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practiceCompany;
(qxv) adoptcommence, modify from the form existing on the date hereof, threaten or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreementsettle any litigation;
(rxvi) (A) sell, license or transfer to any Person any rights to any Company Intellectual Property or enter into any agreement with respect to any Company Intellectual Property with any Person or entity, (B) buy or license any Intellectual Property or enter into any agreement with respect to the Intellectual Property of any Person or entity, (C) enter into any agreement with respect to the development of any Intellectual Property with a third party, or (D) 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;
(xvii) 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 business;
(xviii) enter into, renew, fail to renew, renegotiate, amend or otherwise modify, or materially breach the terms of any Material Contract;
(xix) terminate, modify amend or waive fail to renew any material right underInsurance Policy;
(xx) terminate or fail to review or preserve any Company Authorization; or
(xxi) take, or agree in writing or otherwise to take, any Material Contract of the actions described in Section 6.1(b)(i) through Section 6.1(b)(xx) hereof, or Permit, any other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) action that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by would prevent the Company or any of its Subsidiaries in the ordinary course of business); or
(s) agree Shareholders from performing, or commit to do cause the Company or any of the foregoing. Nothing contained in this Agreement shall give ParentShareholders not to perform, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationstheir respective covenants hereunder.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during 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 as expressly contemplated by this Agreement or as required by applicable Law or with to the prior written extent that Parent shall otherwise consent of Parent, conduct in writing) to carry on its business in the usual, regular and ordinary course of businessin 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 therewithwith such business, the Company shall, and shall cause each of its Subsidiaries to, to use its commercially all reasonable efforts consistent with past practice and policies to preserve substantially intact its and its Subsidiaries’ present business organization, to keep available the services of its and its Subsidiaries’ current present officers and employees, to key employees and preserve its and its Subsidiaries’ present their relationships with customers, suppliers, distributors, licensors, licensees licensees, and other Persons others having business relationships dealings with it. Without limiting , all with the generality goal of the foregoing, between the date of this Agreement preserving unimpaired its goodwill and ongoing businesses at the Effective Time. The Company shall promptly notify Parent of any event or occurrence or emergency not in the ordinary course of its business, except and any material event involving the Company or its business. Except as otherwise expressly contemplated by this Agreement or as set forth disclosed in Section 6.01 of the Company Disclosure Letter or as required by applicable LawSchedule 4.1, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Parent:
(a) amend Enter into any commitment or propose transaction not in the ordinary course of business.
(b) Transfer to amend its certificate any person or entity any rights to the Company Intellectual Property Rights (other than pursuant to end-user licenses in the ordinary course of incorporation or by-laws (or other comparable organizational documentsbusiness);
(bc) Enter into or amend 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;
(d) Amend or otherwise modify (or agree to do so), except in the ordinary course of business, or violate the terms of, any of the agreements set forth or described in the Disclosure Schedule;
(e) Commence any litigation;
(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 reclassifyreclassify 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, or repurchase, redeem or otherwise acquire, directly or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting ofindirectly, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company options, warrants or other direct or indirect wholly-owned Subsidiaries of the Companyrights exercisable therefor);
(dg) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) Except for the issuance of shares of Company Common Stock upon exercise or conversion of presently outstanding Company Options, issue, grant, deliver or sell or authorize or propose the exercise issuance, grant, delivery or sale of, or purchase or propose the purchase of, any shares of its capital stock or securities convertible into, or subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, character obligating it to issue any such shares or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessother convertible securities;
(h) transfer, license, sell, lease Cause or otherwise dispose permit any amendments to its Articles of any assets (whether by way of merger, consolidation, sale of stock Incorporation or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned SubsidiariesBylaws;
(i) adopt Acquire or effect a plan of complete agree to acquire by merging or partial liquidationconsolidating with, dissolutionor by purchasing any assets or equity securities of, restructuringor by any other manner, recapitalization any business or any corporation, partnership, association or other reorganization;
(j) incur any indebtedness for borrowed money business organization or guarantee any such indebtedness of another Persondivision thereof, issue or sell any debt securities otherwise acquire or options, warrants, calls or other rights agree to acquire any debt securities assets in an amount in excess of $10,000 in the Company case of a single transaction or any in excess 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 30,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(s) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Summit Design Inc)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date hereof through the earlier of the termination of this Agreement until in accordance with Article IX and the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or Law, with the prior written consent of ParentParent (which consent shall not be unreasonably withheld, conduct its business conditioned or delayed), or as set forth in Section 7.1 of the ordinary course of business, and, to the extent consistent therewithCompany Disclosure Letter, the Company shall, and shall cause each of its Subsidiaries to, (x) conduct its business in the ordinary course of business consistent with past practice, and (y) use its commercially reasonable efforts to maintain and preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its key employees and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present maintain satisfactory relationships with customers, suppliers, distributors, licensors, licensees and other Persons persons having a business relationships relationship with itthe Company or any of its Subsidiaries. Without limiting the generality foregoing, during the period from the date hereof through the earlier of the foregoing, between the date termination of this Agreement in accordance with Article IX and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall notas expressly required pursuant to this Agreement, nor shall it permit any of its Subsidiaries to, without with the prior written consent of Parent (which consent shall not be unreasonably withheld withheld, conditioned or delayed):), or as set forth in the corresponding subsection of Section 7.1 of the Company Disclosure Letter, the Company shall not, and shall cause its Subsidiaries not to:
(a) amend or propose to amend its certificate the Company Organizational Documents or the Company Subsidiary Organizational Documents, or otherwise take any action to exempt any person from any provision of incorporation the Company Organizational Documents or by-laws (or other comparable organizational documents)the Company Subsidiary Organizational Documents;
(b) (i) split, combine or reclassifyreclassify any of its capital stock or (ii) make, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside declare or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of), or enter 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 exercisable or exchangeable for any Contract with respect shares of its capital stock (except (A) dividends paid or distributions made by any wholly-owned Subsidiary of the Company to the voting ofCompany or any of its wholly-owned Subsidiaries, or (B) the acceptance of shares of Company Common Stock as payment for the exercise price of any Company Stock Option or the payment of withholding Taxes incurred in connection with the vesting, exercise or settlement of Company Stock Awards outstanding as of the date hereof in accordance with past practice and the terms of the applicable Company Stock Plan);
(c) (i) issue, sell, grant any right to acquire 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, Company Stock Awards or other rights of any kind to acquire any shares of its capital stock, except pursuant to the settlement or exercise of Company Equity Awards outstanding as of the date hereof in accordance with their terms, (ii) enter into any Contract or understanding with respect to the sale or voting of its capital stock or other equity or ownership interests, or (iii) adopt or implement a stockholder rights plan or similar arrangement;
(d) adopt a plan of complete or partial liquidation or dissolution or enter into any merger (other than dividends the Merger), consolidation, restructuring, recapitalization or distributions from other reorganization;
(e) (i) incur, assume, endorse, guarantee or otherwise become liable for any Indebtedness or issue or sell any debt securities or calls, options, warrants or other rights to acquire any Indebtedness (directly, contingently or otherwise), except for Indebtedness in the amounts and to the persons set forth on Section 5.26(a) of the Company Disclosure Letter and except for any Indebtedness among the Company and its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect among wholly-owned Subsidiaries of the Company);
, (dii) issueincur any Lien on any of its property or assets, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its termsexcept for Permitted Liens, or (iiiii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law draw or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees borrow any additional amounts under existing credit facilities of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee(i) sell, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sellmortgage, lease assign, abandon, let lapse, fail to renew, allow to enter the public domain (except in the ordinary course), encumber or otherwise dispose of any Company Owned Intellectual Property, Company IP Agreement or any other rights, properties or 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 CompanyCompany or any of its Subsidiaries to any person, other than in the case sales of inventory or of obsolete equipment or assets being replacedequipment, in each case case, in the ordinary course of business consistent with past practice, or (ii) cancel, release or assign any Indebtedness of any person owed to it or any claims held by it against any person;
(i) acquire (whether by merger or consolidation, acquisition of stock or assets or by formation of a joint venture or otherwise) any other person or business or any material assets, deposits or properties of any other person, (ii) make any investment in each case excluding any transferother person, license(iii) make any loans or advances to any other person, sale, lease or other disposition in connection with any transaction between or except for loans among the Company and/or one or more and any of its wholly-owned SubsidiariesSubsidiaries or (iv) enter into any new line of business;
(h) make any capital expenditures other than (i) capital expenditures as and to the extent itemized in its 2017 capital expenditure budget set forth on Section 7.1(h) of the Company Disclosure Letter, or (i) individual capital expenditures that (A) do not exceed $100,000, or (B) are incurred to replace inoperable capital assets in the ordinary course of business;
(i) adopt terminate, extend, amend (other than automatic renewals on terms not otherwise different), or waive, release or assign any right under (or consent to the termination of) or engage in any action that would give rise to a right of termination under, any Company Material Contract or enter into any Contract that would constitute a Company Material Contract if it were in effect a plan on the date of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationthis Agreement;
(j) incur except as required by the terms of any indebtedness for borrowed money Company Benefit Plan as in effect on the date of this Agreement, (i) establish, adopt, enter into, amend or guarantee terminate any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls collective bargaining agreement (or other agreement with any labor organization, work council or trade union) or Company Benefit Plan or any plan or Contract that would be a Company Benefit Plan if in effect on the date hereof, (ii) materially increase, individually or in the aggregate, the compensation or benefits of any of the current or former directors, officers, employees, consultants, independent contractors or other service providers of the Company or its Subsidiaries, other than, solely with respect to employees who have an annualized base salary of $100,000 or less, annual merit-based salary increases in the ordinary course consistent with past practice in an amount not to exceed, in the aggregate, 3% of the base salaries of the individuals receiving such increases, (iii) pay or award, or commit to pay or award, any bonuses or incentive compensation, except for the payment of awards outstanding on the date of this Agreement in accordance with the terms of the applicable Company Benefit Plan in effect as of the date of this Agreement; (iv) accelerate any rights or benefits of any kind, (v) establish or fund any rabbi trust or other funding arrangement in respect of any Company Benefit Plan, (vi) grant any Company Stock Awards or other equity-based awards, or (vii) hire, promote or terminate (other than for cause) the employment or services of any officer, employee, independent contractor or consultant who has annualized base salary or compensation greater than $125,000;
(k) implement or adopt any change in its financial accounting principles, practices or methods, other than as may be required by changes in GAAP;
(l) commence, settle or compromise any litigation, claim, suit, action or proceeding, except for settlements or compromises that (i) involve solely monetary remedies with a value not in excess of $100,000 with respect to acquire any debt securities individual litigation, claim, suit, action or proceeding, or $250,000 in the aggregate, (ii) do not impose any restriction on its business or the business of its Subsidiaries, (iii) do not relate to any litigation by any of the Company’s stockholders or any other person in connection with this Agreement, the Offer or the Merger, (iv) do not include an admission of liability or fault on the part 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 and (other than any wholly-owned Subsidiary of itv) or enter into any arrangement having the economic effect of any of the foregoing, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves do not involve a conduct remedy or injunctive or similar relief relief; provided, however, that for any existing litigation, claim, suit, action or has a material restrictive impact proceeding set forth on the business Section 5.9 of the Company Disclosure Letter, if the Company Board of Directors determines that a settlement or any Affiliate thereof;
compromise of such litigation, claim, suit, action or proceeding is in the best interests of the Company and such settlement or compromise otherwise complies with items (lii) make any material change in any method through (v) above, then upon confidential disclosure to Parent prior to effectuation of financial accounting principles such settlement or practicescompromise there shall be no prohibition on the Company settling such litigation, except claim, suit, action or proceeding so long as the full amount of such settlement or compromise is paid by insurer(s) under the Company’s directors and officers insurance policy for any change required by a change in GAAP the policy period ended on or applicable Lawprior to June 30, 2016;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(oi) make, change or revoke any material Tax election, (ii) change any material annual Tax accounting period or make a change in any method of Tax accounting, (iii) file any material amended Tax ReturnReturn that would result in any material Tax, (iv) enter into any material “closing agreement” within the meaning of Section 7121 of the Code (or any analogous or similar provision of state, local or foreign Law), (v) request any Tax ruling from any Governmental Entity, (vi) settle or compromise any material claim Tax liability or assessmentany audit, examination or other proceeding relating to Taxes or surrender any right to claim for a material refund, Tax refund or offset or other reduction in Liability Tax Liability, or consent (vii) except in the ordinary course of business, agree to any an extension or waiver of the statute of limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(pn) fail except as expressly permitted by Section 7.3, take any action to maintain in full force and effect material insurance policies covering exempt any person from any state takeover statute or similar statute or regulation that applies to the Company with respect to a Takeover Proposal or its Subsidiaries and its or their propertiesotherwise, assets and businesses including the restrictions on “business combinations” set forth in a form and amount consistent with past practice;
(q) adopt, modify from Section 203 of the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangementDGCL, except as for Parent, Merger Sub or any of their respective Subsidiaries or Affiliates in connection with the transactions contemplated by this Agreement;
(ro) enter intovest or agree to vest any Company Stock Awards, terminateexcept as set forth in Section 5.2(a) of the Company Disclosure Letter;
(p) permit the accounts payable of the Company and its Subsidiaries that have not been paid within sixty (60) days of invoice to exceed the amount set forth on Section 5.26(b) of the Company Disclosure Letter;
(q) incur or agree to incur fees and expenses of the type set forth in Section 5.26(c), modify Section 5.26(d) or waive any material right underSection 5.26(f) in connection with the Offer, any Material Contract the Merger, the Agreement or Permit, other than Contracts entered into with customers the transactions contemplated by this Agreement in the ordinary course excess of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, $7,807,402 in the aggregate;
(r) agree to continue or extend the term of the TSA beyond November 30, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business)2017; or
(s) agree to take, or commit make any commitment to do take, any of the foregoing. Nothing contained in foregoing actions that are prohibited pursuant to this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsSection 7.1.
Appears in 1 contract
Conduct of Business of the Company. The Company (a) Except (i) for the Reorganization, (ii) for the matters set forth in Section 6.01(a) of the Xxxxxx Disclosure Schedule, (iii) as otherwise expressly required or permitted by the terms of this Agreement or any other Transaction Agreements or (iv) to the extent that Berkshire Hathaway shall have otherwise given its consent or approval, during the period commencing on the date of this Agreement until the Closing Date, Xxxxxx shall, and shall cause each of its applicable Subsidiaries to, during (x) conduct the period business of the Station in the usual, regular and ordinary course in substantially the same manner as conducted as of the date of this Agreement and consistent with past practice (“Ordinary Course of Business”), (y) operate the Station in compliance in all material respects with the Communication Laws and the Station License, and (z) use its commercially reasonable efforts to preserve intact the current business organization and operations of the Station, including the retention of Station Employees in their current positions (provided, however, that this clause (z) does not require the payment by Xxxxxx of any amounts or benefits to Station Employees in excess of those to which they are entitled under the terms of their employment as of the date of this Agreement).
(b) In addition to and without limiting the generality of the immediately preceding sentence, from the date of this Agreement until the Effective TimeClosing Date, except as expressly required or specifically contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and any other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Transaction Agreement or as set forth consented to or approved in Section 6.01 of the Company Disclosure Letter or as required advance by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent Berkshire Hathaway (which consent or approval shall not be unreasonably withheld or delayed):
delayed with respect to those actions described in clauses (ai)-(vii), (xi) amend or propose and (xii) and clause (xvii) to amend the extent related thereto), Xxxxxx and its certificate Subsidiaries will not, and will not permit the Company to, do any of incorporation or by-laws (or other comparable organizational documents);
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract the following with respect to the voting ofCompany; provided that, for purposes of this Section 6.01(b), at any shares time prior to the transfer of the Station to the Company, references to the Company shall be deemed to refer to the Station Subsidiary; provided, further, that, to the extent practicable, the restrictions set forth in this Section 6.01(b) shall apply only to the Station and any other Xxxxxx Assets and not to any other business of Xxxxxx or its Subsidiaries:
(i) make any investments of cash or cash equivalents, other than in the Ordinary Course of Business;
(ii) incur any material capital stock expenditures that are not reflected in the budget for the Station for the current fiscal year, other than in the Ordinary Course of Business;
(iii) incur, assume, guarantee, prepay or otherwise become liable for any indebtedness for borrowed money (directly, contingently or otherwise), other than in the Ordinary Course of Business;
(iv) purchase or sell any material assets, other than purchases in the Ordinary Course of Business;
(v) enter into, modify, amend, terminate or waive in any material way any rights under any material contracts, other than in the Ordinary Course of Business;
(vi) hire any individual who, if hired, would be a Company Employee, other than any such individual who is hired in order to replace a Station Employee whose employment terminates on or following the date of this Agreement, or transfer any Station Employee to any position such that such individual would not be a Company Employee at the Closing;
(vii) enter into any employment, consulting, special retirement, change of control, separation, severance or retention agreement with any Station Employee or Company Employee, other than any such agreement for which Xxxxxx or its Subsidiaries (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company)) shall be solely liable and which shall not result in any obligation of, or commitment by, Berkshire Hathaway or its Affiliates;
(dviii) issue, sell, pledge, dispose of increase the compensation or encumber benefits payable or provided to any Company Securities Station Employee or Company Subsidiary SecuritiesEmployee, other than (iA) any such increases in the issuance Ordinary Course of shares of Company Common Stock upon Business and (B) any such increases for which Xxxxxx or its Subsidiaries (other than the exercise of any Company Stock Option outstanding under Company Stock Plans as Company) shall be solely liable in their entirety and, in the case of the date of this Agreement preceding clause (B), which shall not result in accordance with its termsany obligation of, or (ii) in accordance with the Stockholder Rights Agreementcommitment by, Berkshire Hathaway or its Affiliates;
(eix) enter into, adopt or amend any Company Benefit Plan;
(x) make any change in any method or practice of accounting for financial reporting, except as required by applicable Law or pursuant GAAP as in effect from time to Section 3.03, time;
(i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (iixi) enter into any new or amend in any material respect, any existing employment, severance, retention or change in control agreement transaction with any Affiliate of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 CompanyXxxxxx, other than in the case Ordinary Course of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned SubsidiariesBusiness;
(ixii) adopt or effect a plan settle any material Legal Proceedings, other than in the Ordinary Course of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationBusiness;
(jxiii) incur any indebtedness for borrowed money amend the Company’s articles of incorporation, bylaws 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiariessimilar governing documents;
(kxiv) institute anyapprove (A) the restatement and/or amendment of the limited liability company agreement of Miami Tower, (B) the issuance of any options for or rights to acquire, or settle any securities convertible into or compromise any pending exercisable or threatenedexchangeable for, Legal Actions involving injunctive relief limited liability company interests or other voting securities of, or other ownership interests in, Miami Tower, or payments based on such securities or interests, or (C) the payment of monetary damages by the Company or any of its Subsidiaries issuance of any amount exceeding $25,000 individually bonds, debentures, notes or $100,000 in other indebtedness of Miami Tower that have the aggregateright to vote (or that are or, other than after the passage of time, may be convertible into or exercisable or exchangeable for securities having the right to vote) on any Legal Action brought against Parent or Merger Sub arising out matters on which interest holders of a breach or alleged breach of this Agreement by Parent or Merger Sub; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofMiami Tower may vote;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(mxv) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract FCC consent decree with respect to any joint venture, strategic partnership the Station or alliancethe Station License if such FCC consent decree involves the payment by the Company of more than $350,000;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(pxvi) fail to take such action as is reasonably required to maintain the Station License in full force and effect material insurance policies covering or adversely modify the Company or its Subsidiaries and its or their properties, assets and businesses Station License in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business)adverse respect; or
(sxvii) commit or agree or commit to do take any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsforegoing actions.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of businessbusiness consistent with past practice, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly provided or contemplated by this Agreement or as set forth in on Section 6.01 5.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(b) (i) split, combine or reclassifyreclassify any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
, (ciii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the CompanySubsidiary);
(dc) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock Option in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with its their terms, (iii) the issuance of Company Equity Awards and the issuance of shares of Company Common Stock upon the exercise of such Company Equity Awards (other than directors or (iiexecutive officers of the Company) in accordance with their terms in the Stockholder Rights ordinary course of business consistent with past practice, or (iv) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement;
(ed) except as required by applicable Law or pursuant to Section 3.03by any Company Employee Plan or Contract in effect as of the date of this Agreement, (i) increase the compensation of directors, officers payable or employees of that could become payable by the Company or any of its SubsidiariesSubsidiaries to directors, officers or employees, other than increases in compensation made in the ordinary course of business consistent with past practice, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except in connection with respect to employees with a base salary of less than $60,000 the Company’s annual or quarterly compensation review cycle or 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 accelerate rights under any Company Employee PlansPlans or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this 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;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(ge) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into Person in between or among the Company and/or any excess of its wholly-owned Subsidiaries, (x) trade payables arising $25,000 in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessaggregate;
(hi) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than provided that the foregoing shall not prohibit the Company and its Subsidiaries from (x) granting a security interest in the case equipment purchased with Permitted Equipment Acquisition Debt or (y) transferring, licensing, selling, leasing or disposing of obsolete equipment or assets being replacedreplaced or inventory being sold, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(iii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(jg) repurchase, prepay or incur any indebtedness for borrowed money (other than Permitted Equipment Acquisition Debt) 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiariespractice;
(kh) institute anyenter into or amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any Company Material Contract or any Lease with respect to material Real Estate or any other Contract or Lease that, if in effect as of the date hereof would constitute a Company Material Contract or Lease with respect to material Real Estate hereunder, except as set forth on Schedule 5.01(h) hereof;
(i) institute, settle or compromise any Legal Actions pending or threatenedthreatened before any arbitrator, Legal Actions court or other Governmental Entity involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than (i) 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 (ii) the settlement of claims, liabilities or obligations reserved against on the most recent balance sheet of the Company included in the Company SEC Documents; provided, provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofCompany’s business;
(lj) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(mk) (i) settle or compromise any material Tax claim, audit or assessment, (ii) make or change any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, (iii) amend any material Tax Returns or file claims for material Tax refunds, or (iv) enter into any material closing agreement, surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or its Subsidiaries;
(l) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(nm) authorizeexcept in connection with actions permitted by Section 5.04 hereof, take any action to exempt any Person from, or make any commitment with respect acquisition of securities of the Company by any Person not subject to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change state takeover statute or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim similar statute or assessment, surrender any right regulation that applies to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, Company with respect to Taxes;
(p) fail to maintain a Takeover Proposal or otherwise, including the restrictions on “business combinations” set forth in full force and effect material insurance policies covering Section 203 of the Company DGCL, except for Parent, Merger Sub or its any of their respective Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereofAffiliates, or implement a rights plan, “poison pill” or similar arrangement, except as the transactions contemplated by this Agreement;
(rn) enter intoabandon, terminateencumber, modify convey title (in whole or waive in part), exclusively license or grant any material right under, any Material Contract or Permitother licenses to Company IP, other than Contracts entered into with customers in the ordinary course of business consistent with past practice practice; or (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(so) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Conduct of Business of the Company. The Company shallExcept as contemplated by this Agreement, from and shall cause each of its Subsidiaries to, during the period from after the date hereof until the earlier of the Effective Time or the termination of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or in accordance with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewithterms, the Company shall, and shall cause each of its Subsidiaries other Group Company to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement set forth on Schedule 6.1 or as set forth consented to in Section 6.01 of the Company Disclosure Letter or as required writing by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld withheld, conditioned or delayed):
), (a) amend conduct its business in the ordinary and regular course in substantially the same manner heretofore conducted (including any conduct that is reasonably related, complementary or propose to amend its certificate of incorporation or by-laws incidental thereto) and within the Group Companies’ 2015 capital expenditure budget (or other comparable organizational documents);
the Group Companies’ 2016 capital expenditure budget, which budget shall target the spending levels used in the Group Companies’ 2015 capital expenditure budget) in all material respects and (b) splituse commercially reasonable efforts (1) to preserve substantially intact its business operations, combine or reclassifyorganization and goodwill and (2) to preserve the present commercial relationships with its current officers, repurchasekey employees, redeem or otherwise acquirecustomers, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract suppliers and others having material commercial relationships with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to Group Companies. From and after the Company or other direct or indirect wholly-owned Subsidiaries date hereof until the earlier of the Company);
(d) issue, sell, pledge, dispose of Effective Time or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date termination of this Agreement in accordance with its terms, the Company shall, and shall cause each other Group Company to, except as set forth on Schedule 6.1 or as consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), not do any of the following:
(i) declare, set aside or pay a dividend on, or make any other distribution in respect of, its capital stock or other equity interests, except dividends and distributions by any of the Subsidiaries of the Company to any of the other Group Companies;
(ii) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, capital stock or other equity interests or securities of the Company;
(iii) (A) acquire or agree to acquire in any manner (whether by merger or consolidation, the purchase of any equity interest in or a material portion of the assets of or otherwise) any business or any corporation, partnership, association or other business organization or division thereof of any other Person, other than the acquisition of assets in accordance with the Stockholder Rights Agreement;
Group Companies’ 2015 capital expenditure budget made available to Parent prior to the date hereof (eor the Group Companies’ 2016 capital expenditure budget made available to Parent prior to January 1, 2016, which budget shall target the spending levels used in the Group Companies’ 2015 capital expenditure budget) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 as the result of the termination or resignation of any officer or employee, or (ivB) establish, adopt, enter into, amend, terminate, exercise any discretion under, make or take any action agree to accelerate rights under any Company Employee Plans, or make any contribution loans or advances to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, other than travel advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) other de minimis loans and advances in the ordinary course of business;
(hiv) transferother than pursuant than the Group Companies’ 2015 capital expenditure budget made available to Parent prior to the date hereof (or the Group Companies’ 2016 capital expenditure budget made available to Parent prior to January 1, license2016, sellwhich budget shall target the spending levels used in the Group Companies’ 2015 capital expenditure budget), lease (x) enter into any Contract that if entered into prior to the date hereof would be a Material Contract or otherwise dispose (z) adversely amend, modify, renew or terminate any Material Contract, except for immaterial changes entered into in the ordinary course of business;
(v) enter into any assets Customer Contract (whether x) except in the ordinary course of business, and (y) unless such Customer Contract (A) provides for fees to any Group Company in an amount not reasonably expected to exceed $50,000 in monthly recurring revenue (excluding annual escalators), and (B) does not (1) provide any material concession or credit to a Person or impose material obligations upon any of the Group Companies without receiving any commercially reasonable benefit from the other party thereunder, (2) require any Group Company to provide a level of power to any Person such Group Company could not reasonably provide or (3) prohibit any of the Group Companies from assigning all or any portion of its rights and obligations under such Customer Contract or Owned Real Property Sub Lease to an entity controlled by way of mergeror under common control with the Company;
(vi) modify, consolidationamend, sale of stock or assetsrenew, or otherwiseextend any Customer Contract (x) except in the ordinary course of business and (y) unless such modification, amendment, renewal or extension would not constitute a Prohibited Service Order;
(vii) terminate any (x) Customer Contract with a Material Customer or (y) Customer Contract with a Customer that is not a Material Customer except (1) in the ordinary course of business, (2) as a result of the non-payment of rent and other monetary obligations by such Customer or tenant under an Owned Real Property Lease or (3) where the aggregate revenues during any consecutive 12 month period prior to the date of termination did not exceed $100,000;
(viii) enter into any Contract to sell or transfer (other than pursuant to an Owned Real Property Sub Lease or Customer Contract entered into in the ordinary course and in accordance with the terms of this Agreement) the Real Property or to purchase or acquire any real property, in each case, except in accordance with the Group Companies’ 2015 capital expenditure budget made available to Parent prior to the date hereof (or the Group Companies’ 2016 capital expenditure budget made available to Parent prior to January 1, 2016, which budget shall target the spending levels used in the Group Companies’ 2015 capital expenditure budget);
(ix) enter into any new lease of real property (including the lease described on Schedule 6.1), including where any of the capital stock Group Companies is the tenant thereunder, or amend, modify, renew, extend, surrender or terminate any Material Real Property Lease (except for (1) non-material amendments in the ordinary course of business or (2) any renewal or extension rights exercised in accordance with the existing terms of a Material Real Property Lease) or enter into any lease expansion pursuant to which any of the Group Companies become tenants;
(x) enter into any new lease of real property, where any of the Group Companies is the landlord thereunder, or amend, modify, renew, extend, surrender or terminate any Owned Real Property Sub Lease (except for (1) non-material amendments in the ordinary course of business or (2) any renewal or extension rights exercised in accordance with the existing terms of an Owned Real Property Sub Lease) or enter into any lease expansion pursuant to which any of the Group Companies become landlords;
(xi) (A) make application to any Governmental Entity for any Real Property Approvals or any change in the zoning, affecting the Real Property; or (B) settle any insurance claims in excess of $500,000 or agree to any material condemnation or payment of material condemnation proceeds;
(xii) renew or enter into any material non-compete, exclusivity, non-solicitation or other equity interests agreement that restricts or limits, in any Subsidiary material respect, the operations of the CompanyCompany or any of its Subsidiaries (or Parent or any of its Affiliates) after consummation of the Merger;
(xiii) (A) increase in any material respect the amount, rate or terms of compensation or benefits of, or grant any awards under any equity-based, bonus or incentive plans, agreements or arrangements to, any of its directors, officers or employees, other than as required by law or any Employee Benefit Plan in effect as of the case date hereof and other than in connection with promotions of obsolete equipment employees or assets being replacedthe hiring of any new non-executive employees, in each case in the ordinary course of business and consistent with past practice; (B) accelerate the vesting or payment of any compensation or benefits under any Employee Benefit Plan; or (C) pay or agree to pay any compensation or benefit not contemplated by any Employee Benefit Plan to any of its current or former directors, officers, employees or consultants (except to the extent such payments are treated as Seller Expenses);
(xiv) (A) amend, terminate, adopt or enter into any Employee Benefit Plan (except as required by law); or (B) take any action to fund or in any other way secure the payment of compensation or benefits under any Employee Benefit Plan;
(xv) enter into any waiver, release, assignment, compromise or settlement of any pending or threatened Action that would require payments by the Group Companies, in each case excluding any transfercase, license, sale, lease in excess of $250,000 individually or other disposition $1,000,000 in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiariesaggregate;
(ixvi) adopt make any change in accounting policies or effect a plan of complete procedures, except as required by GAAP or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationby applicable Law;
(jxvii) incur incur, create, assume or otherwise become liable for any indebtedness for borrowed money or guarantee any such indebtedness Indebtedness (including the issuance of another Person, issue or sell any debt securities security or options, warrants, calls warrants or other rights to acquire debt securities) in excess of $300,000 in the aggregate (with respect to the Group Companies, taken as a whole), except borrowings incurred in the ordinary course of business under the Credit Arrangements;
(xviii) issue or sell or authorize the issuance or sale of any debt shares of capital stock or other equity interests or securities convertible, exchangeable or exercisable for any shares of such capital stock or other equity interests or such convertible or exchangeable securities (other than the issuance of Common Stock upon the exercise of the Company Warrant 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 Company Options outstanding as of the foregoing, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiariesdate hereof);
(kxix) institute any, adopt any amendments to or settle otherwise change their respective Governing Documents or compromise form or organize any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofsubsidiary;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(mxx) enter into any material agreementcommitment for or make any capital expenditure (other than in accordance with the Group Companies’ 2015 capital expenditure budget made available to Parent prior to the date hereof (or the Group Companies’ 2016 capital expenditure budget made available to Parent prior to January 1, agreement 2016, which budget shall target the spending levels used in principle, letter the Group Companies’ 2015 capital expenditure budget)) in excess of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance$1,000,000 in the aggregate (except as otherwise permitted by this Section 6.1);
(nxxi) authorizesell, lease, license, abandon, permit to lapse, place in the public domain, pledge, assign, transfer, encumber, effect a deed in lieu of foreclosure or make otherwise dispose of any commitment with respect to, any capital expenditure, property or assets in excess of $200,000 in the aggregate (except as contemplated by sales of personal property in the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method ordinary course of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction business not in Liability or consent to any extension or waiver excess of $200,000 in the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permitaggregate), other than Contracts non-exclusive licenses of Intellectual Property Rights entered into with customers in the ordinary course of business consistent with past practice and the abandonment, lapse or dedication to the public domain of any Intellectual Property Rights that are no longer used in the conduct of the business of any Group Company and no longer commercially practicable to maintain;
(it being understood thatxxii) acquire or agree to acquire (including by merger, consolidation or acquisition of stock or assets) any real property or personal property (other than personal property at a total cost of less than $200,000 in the aggregate (except for the purposes capital expenditures otherwise permitted by this Section 6.1));
(xxiii) initiate any material zoning reclassification or any other material change to any approved site plan, special use permit, planned development approval or other land use entitlement affecting any Owned Real Property or Leased Real Property;
(xxiv) adopt a plan or complete or partial liquidation, consolidation, merger or reorganization or authorize or undertake a dissolution, consolidation, merger, restructuring, recapitalization, reclassification or other reorganization;
(xxv) make or change any material Tax election; settle or compromise any claim, notice, audit report or assessment in respect of this subsection, “consistent with past practice” shall not include entering material Taxes; change any annual Tax accounting period; adopt or change any method of Tax accounting; file any amended Tax Return; enter into any Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement relating to any material Tax; surrender any right to claim a material Tax refund; or consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(xxvi) enter into any Customer Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, or Owned Real Property Sub Lease providing for upfront payment of installation or signing fees in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts excess of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business)$50,000; or
(sxxvii) agree in writing or commit otherwise make any commitment to do any of the foregoingactions described in the foregoing clauses (i) through (xxvi). Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior Notwithstanding anything to the Effective Time. Prior to contrary contained herein, during the period from the date hereof until the Effective Time, the Group Companies shall be permitted to utilize any and all available Cash and Cash Equivalents (i) to pay Seller Expenses and (ii) to repay outstanding Indebtedness and any amounts owing under the Management Services Agreement, in each case, at such times and in such amounts as the Company or the applicable Subsidiary shall exercisedeem necessary, consistent with appropriate, or desirable. Notwithstanding anything to the terms and conditions of contrary in this Agreement, complete control and supervision over prior to Closing neither Parent nor any of its and its Subsidiaries’ operationsAffiliates will manage or attempt to manage the conduct of business in the ordinary course by Company or any of the other Group Companies.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement and continuing until the Effective Time, except as expressly contemplated by earlier of the termination of this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewithClosing Date, the Company shallagrees to continue conducting its real estate development business. Subject to the limitations set forth below, the Company shall have the right to (i) enter into Contracts with contractors, engineers, advertising agencies, land planners, attorneys and other professionals in connection with the development and sale of real property, (ii) solicit and enter into Contracts in connection with the sale and purchase of real property and water rights, (iii) pursue land use approvals and entitlements and (iv) develop its property including, without limitation, the construction of infrastructure improvements. The Company shall cause each of its Subsidiaries to, use its commercially reasonable efforts (i) when in the best interest of the Company, to pay or perform obligations when due, (ii) to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ Company's current officers and employees, key employees and (iii) to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having the goal of preserving the ongoing business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement Company and the Effective Time, except as otherwise expressly contemplated by this Agreement or value and the assets of the Company. Except as set forth in Section 6.01 6.2 of the Company Disclosure Letter or as required by applicable LawSchedule, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (Purchaser, which consent shall not be unreasonably withheld or delayed):withheld:
(a) amend commence any litigation having a value greater than $10,000,000 or propose settle any litigation having a value of greater than $5,000,000 without three (3) business days prior notice to amend its certificate of incorporation Purchaser , provided that nothing herein shall limit the Company's right to otherwise commence or by-laws (or other comparable organizational documents)settle any litigation;
(b) declare, set aside, or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any equity securities of the Company, or split, combine or reclassifyreclassify any equity securities of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any equity securities of Company, or repurchase, redeem or otherwise acquire, directly or offer to repurchase, redeem or otherwise acquireindirectly, any equity securities of the Company Securities (or Company Subsidiary Securitiesoptions, warrants or other rights exercisable therefor);
(c) declareissue, set aside grant, deliver or pay any dividend sell or distribution (whether in cashauthorize or propose the issuance, stockgrant, property delivery or otherwise) in respect sale of, or enter into any Contract with respect to purchase or propose the voting purchase of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to of the Company or any securities convertible into, or subscriptions, rights, warrants or options to acquire, or other direct agreements or indirect wholly-owned Subsidiaries commitments of the Company);
(d) issueany character obligating it to issue or purchase, sell, pledge, dispose of any such shares or encumber any Company Securities or Company Subsidiary Securities, other convertible securities other than (i) the issuance of shares of Company Common Stock capital stock issued upon the exercise of any Company Stock Option options or warrants outstanding under Company Stock Plans as of the date of this Agreement in accordance with Agreement;
(d) cause or permit any amendments to its terms, or (ii) in accordance with the Stockholder Rights AgreementOrganizational Documents;
(e) except as required acquire or agree to acquire by applicable Law merging or pursuant to Section 3.03consolidating with, (i) increase the compensation of directorsor by purchasing any assets or equity securities of, officers or employees of the Company by any other manner, any business or any of its Subsidiariescorporation, (ii) enter into partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any new or amend in any material respect, any existing employment, severance, retention or change in control agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 as the result of the termination or resignation assets of any officer or employee, or (iv) establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee PlanPerson;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Personothers (or amend the terms of such agreements or instruments) in an amount greater than $10,000,000 in the aggregate (and in all cases, regardless of the amount, the funds obtained from any such actions shall be only used to finance the Company's real estate development business);
(g) grant any loans to others or purchase debt securities of others which are greater than $50,000 in the aggregate (and in all cases, regardless of the amount, such loans or purchase of debt securities shall be made or done only in connection with the operation of the Company's real estate development business);
(h) grant any severance or termination pay (in cash or otherwise) to any employee, including any officer, except payments made pursuant to standard written agreements outstanding on the date hereof as disclosed in the Disclosure Schedule;
(i) except as set forth in subsection (l), enter into any “keep well” strategic alliance agreement or other Contract to maintain any financial statement condition arrangement or joint marketing arrangement or agreement in excess 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 10,000,000 in the aggregate, other than brokerage arrangements for sale of Phase I of Flagstaff, and copies of which will be provided to Purchaser (and in all cases, regardless of the amount, such alliances or agreements shall be entered into only in connection with the operation of the Company's real estate development business);
(j) take any Legal Action brought against Parent or Merger Sub arising out action to accelerate the vesting schedule of a breach or alleged breach of this Agreement by Parent or Merger Sub; provided, that neither the Company nor any of its Subsidiaries shall settle the outstanding Company stock options or agree Company common stock, except acceleration made pursuant to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact standard written agreements outstanding on the business of date hereof;
(k) hire or terminate any management-level employees, or encourage any such employees to resign from the Company or any Affiliate thereofCompany;
(l) make any material change buy and sell lots, units, or portions of real property in any method of financial accounting principles a single transaction greater than $10,000,000 in value which is to a single Person or practices, except for any change required by a change in GAAP or applicable Lawentity;
(m) commence construction or enter into any material agreementa construction contract, agreement in principleeither case, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliancepayment obligations greater than $10,000,000 in the aggregate;
(n) authorizeenter into lines of business other than the development and sale of real property, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budgetminerals and water;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right Contract for services that is for a duration of greater than one year and not terminable by the Company on no more than 90 days notice and without cost to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to TaxesCompany;
(p) fail to maintain in full force and effect material insurance policies covering enter into any transaction with an Affiliate of the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;Company; or
(q) adopt, modify from the form existing on the date hereof, enter into a contract or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(s) agree or commit agreement to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Stock Purchase Agreement (United Park City Mines Co)
Conduct of Business of the Company. (a) The Company shall, covenants and shall cause each of its Subsidiaries toagrees that, during the period from the date of this Agreement until the Effective Time, except (i) as expressly contemplated or permitted by this Agreement or Agreement, (ii) as set forth on Schedule 6.1 of the Company Disclosure Schedule, (iii) as required by applicable Law or with (iv) unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), the prior written consent of Parent, Company shall conduct its business in the ordinary and usual course of business, and, to the extent business and in a manner consistent therewith, the Company shallwith past practice, and in compliance in all material respects with all applicable Laws (other than non-compliance with Laws that does not materially and adversely affect the business of the Company), shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its business organization and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to shall preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees suppliers and other Persons having with which it has material business relationships with it. Without limiting the generality of the foregoing, between relations.
(b) Between the date of this Agreement and the Effective Time, except (w) as otherwise expressly contemplated or permitted by this Agreement or Agreement, (x) as set forth in Section 6.01 disclosed on Schedule 6.1 of the Company Disclosure Letter or Schedule, (y) as required by applicable LawLaw and notification is given to Parent in writing as promptly as practicable in connection therewith, the Company or (z) unless Parent shall not, nor shall it permit any of its Subsidiaries to, without the prior written otherwise consent of Parent in writing (which consent shall not be unreasonably withheld withheld, conditioned or delayed):), the Company shall not:
(ai) amend or propose to amend otherwise change its certificate of incorporation or by-laws (bylaws or other comparable equivalent organizational documents);
(bii) splitissue, combine deliver or reclassifysell or authorize, repurchasepropose or reserve for issuance, redeem delivery or sale, or otherwise acquire, or offer to repurchase, redeem or otherwise acquireencumber, any shares of capital stock (except pursuant to the exercise of Company Securities Stock Options, the vesting of Company RSUs or settlement of other awards outstanding as of the date hereof in accordance with the terms of such instruments) or any options, warrants, convertible securities or other rights of any kind to acquire any such shares, including the granting of Company Subsidiary SecuritiesStock Options and Company RSUs;
(ciii) declare, set aside aside, make or pay any dividend or distribution (whether other distribution, payable in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting ofany of its capital stock;
(iv) adjust, split, combine, redeem, repurchase or otherwise acquire any shares of capital stock of the Company (except in connection with the cashless exercises or similar transactions pursuant to the exercise of Company Stock Options or settlement of other awards or obligations outstanding as of the date hereof or permitted to be granted after the date hereof), or reclassify, combine, split, subdivide or otherwise make changes with respect to its capital structure;
(v) (A) 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 dividends purchases of inventory and other assets in the ordinary course of business or distributions from its direct pursuant to existing Contracts); or indirect wholly-owned Subsidiaries to the Company (B) sell or other direct or indirect wholly-owned Subsidiaries of the Company);
(d) issue, sell, pledge, otherwise dispose of or encumber (whether by merger, consolidation or acquisition of stock or assets or otherwise) any Company Securities corporation, partnership or Company Subsidiary Securities, other business organization or division thereof or any assets (other than (i) sales or dispositions of inventory and other assets in the issuance ordinary course of shares of Company Common Stock upon business or pursuant to existing Contracts), in each case, which is or are material to the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its termsCompany, or (ii) in accordance enter into, modify or amend any lease with the Stockholder Rights Agreementregard to real property;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (iivi) enter into any new into, modify or amend in any material respectrespect any Material Contract or any contract, any existing employment, severance, retention agreement or change in control agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect arrangement that would be a Material Contract if entered into prior to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employeedate hereof, except for the replacement of any current employee whose employment with the Company entering into, modifying or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case amending Material Contracts in the ordinary course of business consistent with past practice, where such Material Contracts, or modifications or amendments thereto, do not contain any material non-customary onerous terms or conditions and are not reasonably expected to result in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiariesa material financial loss;
(ivii) adopt or effect a plan authorize any new capital expenditures which are, in the aggregate, in excess of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationthe Company’s annual capital expenditure budget set forth on Schedule 6.1(b)(vii) of the Company Disclosure Schedule;
(jviii) (A) make any loans, advances or capital contributions to, or investments in, any other Person, (B) incur any indebtedness for borrowed money or guarantee issue any such debt securities or (C) assume, guarantee, endorse or otherwise become liable or responsible for the indebtedness or other obligations of another Person, issue in each case, in excess of $200,000 in the aggregate;
(ix) except to the minimum extent required by applicable Law (including Section 409(A) of the Code), pursuant to any arrangement in effect as of the date hereof, as contemplated by this Agreement or sell as consistent with past practice, (A) amend any debt securities of the terms or optionsconditions of employment or engagement for any employee or consultant of the Company, warrants(B) amend or adopt any compensation or benefit plan including any pension, calls retirement, profit-sharing, bonus or other rights to acquire any debt securities of the Company employee benefit 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 welfare benefit plan (other than any wholly-owned Subsidiary such adoption or amendment that does not materially increase the cost to the Company of itmaintaining the applicable compensation or benefit plan) with or enter into any arrangement having for the economic effect of any of the foregoingbenefit or its employees or directors, or incur (C) accelerate the vesting of, or the lapsing of restrictions with respect to, any Liens stock options or other than Permitted Liens in connection with compensation,
(x) (A) materially increase the foregoingcompensation or benefits of, or, other than in the financing of ordinary course trade payables of business consistent with past practice practice, pay any bonus to, any employee or pursuant independent contractor of the Company, (B) grant any awards under any Company Plan (including the grant of stock options, stock appreciation rights, performance units, restricted stock, deferred stock awards, stock purchase rights or other stock-based or stock-related awards), or remove or modify existing restrictions in any Company Plan on any awards made thereunder, (C) take any action to an existing financing facilityaccelerate the vesting or payment of any compensation or benefits under any Company Plan (except to the extent provided for under any Company Plan in existence as of the date hereof), except for intercompany loans entered into in between or among (D) make any material determination under any Company Plan that is inconsistent with the Company and/or any ordinary course of its wholly-owned Subsidiariesbusiness or past practice;
(kxi) institute anyimplement or adopt any material change in its methods of accounting, except as may be required to conform to changes in statutory or settle regulatory accounting rules or compromise any pending GAAP or threatened, Legal Actions involving injunctive relief or the payment of monetary damages regulatory requirements with respect thereto and as concurred with by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregateCompany’s independent auditors;
(xii) pay, other than 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; provideddischarge, that neither the Company nor any of its Subsidiaries shall compromise, satisfy, settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or (including any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required Action by a change in GAAP Third Party relating to this Agreement or applicable Law;
(m) enter into any material agreementthe transactions contemplated hereby), agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permitsame, other than Contracts entered into with customers compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of money damages (it being understood that, for A) not in excess of $100,000 in the purposes of this subsection, “aggregate or (B) consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, the reserves reflected in the aggregate, substantially inconsistent Company’s most recent balance sheet contained in the Company SEC Reports;
(xiii) make any material tax election (except in connection with the terms and conditions found in other Contracts preparation of similar size and scope previously entered into by the Company or any of its Subsidiaries Tax Returns in the ordinary course of business) or settle or compromise any material Tax liability or refund;
(xiv) fail to take any action necessary or advisable to protect or maintain the Intellectual Property that is material to the conduct of the business of the Company as currently conducted and planned by the Company to be conducted;
(xv) take any action, other than reasonable actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including procedures with respect to the payment of accounts payable and collection of accounts receivable); or
(sxvi) agree or authorize, commit to do or agree to take any of the foregoing. Nothing contained actions described in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsSection 6.1(b)(i) through 6.1(b)(xv).
Appears in 1 contract
Conduct of Business of the Company. The Company shallExcept as expressly contemplated by this Agreement (including the 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 shall cause each of its Subsidiaries to, during the period from after the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality earlier of the foregoing, between Closing Date or the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company);
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date termination of this Agreement in accordance with its terms, the Company shall (and Parent and Seller shall cause the Company to), and shall cause each other Group Company to, except as set forth on Section 7.1 of the Disclosure Schedules or as consented to in writing by Buyer (which consent shall not be unreasonably withheld, conditioned or delayed), (a) continue their Serviced Loan servicing activities, pricing and payment policies, in all material respects in the Ordinary Course of Business, except 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, (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 a series of transactions:
(i) enter into, materially amend or terminate any Material Contract or Real Property Lease, or waive, release or assign any material rights or material claims thereunder other than in the Ordinary Course of Business; provided that the foregoing shall not restrict the Company’s ability to commence or settle any Action or enter into any agreement permitted by clause (xi) of this Section 7.1(c);
(ii) declare, set aside or pay a dividend on, or make any other distribution (whether securities or property) in accordance with respect of, its equity securities except (A) dividends and distributions by any of the Stockholder Rights AgreementSubsidiaries of the Company to any of the other Group Companies, and (B) dividends or distributions made or paid in Cash and Cash Equivalents;
(eiii) (A) issue, sell, transfer, pledge, grant, dispose of, encumber or deliver any equity securities of 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) adjust, split, combine or reclassify, or subject to recapitalization, any equity securities of any Group Company;
(iv) repurchase, redeem, repay or otherwise acquire any outstanding equity securities of any Group Company;
(v) acquire or agree to acquire in any manner (whether by merger or consolidation, the purchase of an equity interest in or a material portion of the assets of or otherwise) any business or any corporation, partnership, association or other business organization or division thereof of any other Person other than the acquisition of assets in the Ordinary Course of Business that do not exceed $1,000,000 in the aggregate;
(vi) merge or consolidate itself or any Group Company with any other Person, or restructure, recapitalize, reorganize or adopt any other corporate or legal entity reorganization, otherwise alter its legal structure or form or completely or partially liquidate;
(vii) adopt or propose to adopt any amendments to their respective Governing Documents;
(viii) dissolve or liquidate or permit or allow the filing of a petition for relief under any provisions of the United States Bankruptcy Code with respect to any Group Company;
(ix) (A) except as required by applicable Law the terms of any Benefits Arrangement or pursuant Material Contract as in effect on the date hereof or other than in the Ordinary Course of Business, grant, announce or accelerate (including accelerate the vesting of) any incentive awards, bonus, equity-based or similar compensation or any material increase in the salaries, bonuses or other compensation and benefits payable by a Group Company to Section 3.03any Business Employee, (iB) materially increase the compensation benefits under any Company Plan, (C) other than as provided in clauses (A) and (B) or as required by the terms of directorsany Benefits Arrangement or Material Contract as in effect on the date hereof, officers enter into, establish, materially amend or employees terminate any Company Plan, other than as necessary to comply with applicable Law; provided that the renewal of an existing Company Plan on substantially the same terms shall not be viewed as entering into, establishing, amending, or terminating a Company Plan; and (D) hire any new employee or new independent contractor (other than any new hire intended to replace a former employee or independent contractor) with a base salary or guaranteed annual compensation, as applicable, over $200,000; provided that nothing in this Section 7.1(c)(ix) shall be construed to prohibit or limit the ability or right of the Company Seller (or any of its SubsidiariesAffiliates) from amending, adopting, renewing, or terminating any Seller Plans;
(iix) enter into transfer, sell, lease, exclusively license, surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of or subject to any new or amend in Lien (other than Permitted Liens), any material respect, any existing employment, severance, retention or change in control agreement with any assets outside the Ordinary Course of its past or present directors, officers or employees, (iii) promote any officers or employeesBusiness, except with respect to employees for assets with a base salary purchase price, in the aggregate, of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan1,000,000;
(fxi) hire commence, settle or compromise any officer Action or employeethreatened Action that, except for individually or in the replacement aggregate, would be reasonably expected to adversely affect in a material way the post-Closing operation of the Business or business of Buyer or any current employee whose employment of its Affiliates (provided that Seller and its Subsidiaries, including the Company, may enter into any settlement or 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 Subsidiary thereof is terminated one or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000more of the Top Mortgage Servicers);
(gxii) acquireexcept as required by GAAP or by applicable Law, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or change any of its wholly-owned Subsidiariesthe accounting principles or practices used by a Group Company or write up, write down or write off the book value of any material asset;
(xxiii) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course enter into a new line of business;
(hxiv) transfer, license, sell, lease fail to make any scheduled capital expenditure in accordance in all material respects with Section 7.1(c)(xiv) of the Disclosure Schedule or otherwise dispose of any assets (whether by way of merger, consolidation, sale of stock or assetsmake, or otherwise)enter into any agreement or binding obligation with any Person to make, including any other capital expenditures in excess of $1,000,000 in the capital stock aggregate;
(xv) incur, assume, grant, endorse or other equity interests in guarantee any Subsidiary of the Company, Indebtedness other than in the case Ordinary Course of obsolete equipment Business other than (x) Indebtedness that is to be satisfied at the Closing in accordance with this Agreement or assets being replaced(y) Indebtedness pursuant to Intercompany Agreements; or
(xvi) agree in writing or otherwise to do anything contained in this clause (c). provided, however, that, notwithstanding anything to the contrary in each case in the ordinary course of business consistent with past practiceSection 7.1, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 shall be entitled 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” settlement agreement or other Contract to maintain any financial statement condition of any other Person (other than any wholly-owned Subsidiary of it) similar agreement or enter into any arrangement having the economic effect of any of the foregoing, or incur any Liens other than Permitted Liens contract in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries settlement of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(s) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsextent such action would not be prohibited by clause (xi) above.
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 or the Effective Time, the Company agrees to conduct the business of Company, except to the extent that Parent shall otherwise consent in writing in accordance with Section 4.3 hereof, in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to pay the debts and Taxes of the Company when due (subject to Parent’s review of the filing of any Tax Return, as set forth in Section 4.1(e) below), to pay or perform other obligations when due, and, to the extent consistent with such business, to preserve intact the present business organizations of the Company, keep available the services of the present officers and Employees of the Company and preserve the relationships of the Company with customers, suppliers, distributors, licensors, licensees, and others having business dealings with them, all with the goal of preserving unimpaired the goodwill and ongoing business of the Company at the Effective Time. The Company shall, shall promptly notify Parent of any event or occurrence or emergency not in the ordinary course of business of the Company and shall cause each of its Subsidiaries to, 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. For purposes of this Section 4.1, except “in the aggregate” shall refer to a series of related transactions with a single party or group of related parties. Except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 4.1 of the Company Disclosure Letter or as required by applicable LawSchedule, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):in accordance with Section 4.3 hereof:
(a) amend cause or propose permit any modifications, amendments or changes to amend its certificate of incorporation or by-laws (or other comparable organizational documents)the Charter Documents;
(b) undertake any expenditure, transaction or commitment exceeding $50,000 individually or $100,000 in the aggregate or any commitment or transaction of the type described in Section 2.13 hereof;
(c) pay, 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 of liabilities reflected or reserved against in the Current Balance Sheet;
(d) adopt or change accounting methods or practices (including any change in depreciation or amortization policies or rates) other than as required by GAAP;
(e) make or change any material Tax election, adopt or change any Tax accounting method, enter into any closing agreement in respect to Taxes, settle 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 Return or any amended Return unless a copy of such Return has been delivered to Parent for review a reasonable time prior to filing;
(f) 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 property) in respect of any Company Capital Stock, or split, combine or reclassifyreclassify any 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 Company Capital Stock, or directly or indirectly repurchase, redeem or otherwise acquireacquire any shares of Company Capital Stock (or options, warrants or offer to repurchaseother rights convertible into, redeem exercisable or otherwise acquire, any exchangeable for Company Securities or Company Subsidiary SecuritiesCommon Stock) except for the Option Repurchases;
(ch) declareincrease or otherwise change the salary or other compensation payable or to become payable to any officer, set aside director, employee, consultant or pay advisor, or make any dividend declaration, payment or distribution commitment or obligation of any kind for the payment (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company equity or other direct property) of a severance payment, change of control payment, termination payment, bonus or indirect wholly-owned Subsidiaries of the Company);
other additional salary or compensation to any such person (d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option except pursuant to written agreements outstanding under Company Stock Plans as of on the date of this Agreement in accordance with its terms, and disclosed or (ii) in accordance with the Stockholder Rights Agreementmade available to Purchaser);
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation sell, lease, license or otherwise dispose of directors, officers or employees of the Company or grant any security interest in any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock properties or assets, or otherwise, including the sale of any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Personaccounts receivable of the Company, except for properties or assets (wwhether tangible or intangible) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising which are not Intellectual Property and only in the ordinary course of businessbusiness 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, (y) except for advances to employees for travel and business expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessbusiness consistent with past practices;
(hk) transferincur any indebtedness for borrowed money, license, sell, lease or otherwise dispose amend the terms of any assets 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;
(whether by way of merger, consolidation, sale of stock l) waive or assets, release any right or otherwise), including the capital stock or other equity interests in any Subsidiary claim of the Company, including any write-off or other than in compromise of any account receivable of the case Company;
(m) commence or settle any lawsuit, threat of obsolete equipment any lawsuit or assets being replacedproceeding or other investigation by or against the Company or relating to any of its businesses, in each case properties or assets;
(n) issue, grant, deliver or sell or authorize or propose or contract for the issuance, grant, delivery or sale of, or purchase or propose or contract for the purchase of, any Company Capital Stock or any securities convertible into, exercisable or exchangeable for, or subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating any of them to issue or purchase any such shares or other convertible securities, except for the issuance of Company Capital Stock pursuant to the exercise of outstanding Company Options and Company Warrants or the conversion of Company Preferred Stock;
(i) sell, lease, license or transfer to any 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 or Intellectual Property Rights of any Person except in the ordinary course of business consistent with past practice, in each case excluding (ii) purchase or license any transfer, license, sale, lease Intellectual Property or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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) Intellectual Property Rights or enter into any arrangement having agreement or modify or amend any existing agreement with respect to the economic effect Intellectual Property or Intellectual Property Rights of any of the foregoingPerson, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(miii) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract modify or amend any existing agreement with respect to the development of any joint venture, strategic partnership Intellectual Property or alliance;
(n) authorize, or make any commitment Intellectual Property Rights with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxesthird party;
(p) fail enter into or amend any Contract pursuant to maintain in full force and effect material insurance policies covering the which any other party is granted marketing, distribution, development, manufacturing or similar rights of any type or scope with respect to any Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practiceProducts;
(q) adoptenter 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 from or terminate any of the form terms of any Lease Agreements, or waive any term or condition thereof or grant any consents thereunder; or make any material changes in the construction or condition of any such property;
(r) terminate, amend or otherwise modify (or agree to do so), or violate the terms of, any of the Contracts set forth or described in the Disclosure Schedule;
(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 or any equity securities, individually or in the aggregate, to the business of the Company;
(t) grant any right of severance, change of control or termination pay (whether payable in cash, equity or otherwise) to any Employee, except pursuant to written agreements outstanding on the date hereof and as previously made available to Parent, or adopt any new severance plan, or amend or modify or alter in any respect any severance plan, agreement or arrangement existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, ;
(u) except as contemplated specifically permitted by this Agreement;
, adopt, amend or terminate any employee benefit plan, policy or arrangement, or employee stock purchase or stock option plan, or enter into any employment contract (r) enter other than offer letters and letter agreements entered into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “and consistent with past practice, with newly hired employees who are terminable “at will” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that areor, in the aggregatecase of U.K. employees only, substantially inconsistent with upon no more than one month’s contractual notice and who are not officers of the terms and conditions found Company) or collective bargaining agreement, 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 outstanding on the date hereof that have previously been disclosed in writing to Parent;
(v) enter into any strategic alliance, joint venture, affiliate agreement or joint marketing arrangement or agreement;
(w) waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock or any other Contracts 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;
(x) hire, offer to hire or terminate any officer, or encourage or otherwise cause any officer to resign from the Company;
(y) promote, demote, terminate or otherwise change the employment status or titles of similar size and scope previously entered any employee;
(z) alter, or enter into by 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 of its Subsidiaries in the ordinary course of business)interest;
(aa) cancel, amend or renew any insurance policy; or
(sbb) take, commit, or agree in writing or commit otherwise to do take, any of the foregoing. Nothing contained actions described in this Agreement shall give ParentSections 4.1(a) through 4.1(aa) hereof, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, any other action that would (i) prevent the Company shall exercisefrom performing, consistent with or cause the terms Company not to perform, its covenants or agreements hereunder or (ii) cause or result in any of its respective representations and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationswarranties contained herein being untrue or incorrect.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Advent Software Inc /De/)
Conduct of Business of the Company. The Company shallExcept (i) as contemplated or permitted by this Agreement, and (ii) as disclosed in Section 4.1 of the Disclosure Letter, (iii) as required by law, or by a Governmental Entity of competent jurisdiction, or (iv) to the extent that Parent shall cause each of its Subsidiaries tootherwise consent in writing, during the period from the date hereof to the earlier of the Effective Time and the termination of this Agreement until in accordance with its terms, the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, Company will and will cause each Subsidiary to conduct its business operations in the ordinary course of business, business consistent with past practice and, to the extent consistent therewith, and with no less diligence and effort than would be applied in the Company shallabsence of this Agreement, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts seek to preserve substantially intact its and its Subsidiaries’ current business organizationorganizations, to keep available the services service of its and its Subsidiaries’ current officers and employees, to employees and preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees customers and other Persons having business relationships suppliers with itthe intention that its goodwill and ongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, between except (i) as otherwise permitted or contemplated by this Agreement, (ii) as disclosed in Section 4.1 of the Disclosure Letter, (iii) as required by law, or by a Governmental Entity of competent jurisdiction, or (iv) to the extent that Parent shall otherwise consent in writing, during the period from the date hereof to the earlier of this Agreement and the Effective Time, except as otherwise expressly contemplated by and the termination of this Agreement or as set forth in Section 6.01 of accordance with its terms, neither the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Subsidiary will:
(a) amend its Certificate or propose to amend its certificate Articles of incorporation Incorporation or by-laws bylaws (or other comparable organizational documentssimilar governing document);
(b) splitauthorize for issuance, combine issue, sell, deliver or reclassifyagree or commit to issue sell or deliver (whether through the issuance or granting of options, repurchasewarrants, redeem commitments, subscriptions, rights to purchase or otherwise acquire, otherwise) any stock of any class or offer any other securities (except bank loans) or equity equivalents (including any stock options or stock appreciation rights) except for the issuance and sale of Shares pursuant to repurchase, redeem or otherwise acquire, any Company Securities or Stock Options granted under the Company Subsidiary SecuritiesPlans;
(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, stock or property or otherwiseany combination thereof) in respect ofof its capital stock, make any other actual, constructive or enter into any Contract with deemed distribution in respect to the voting of, any shares of its capital stock or otherwise make any payments to stockholders in their capacity as such, or redeem or otherwise acquire any of its securities or any securities of any Subsidiary (other than dividends the repurchase of restricted stock and cancellation of Company Stock Options following termination of employment with or distributions from its direct or indirect wholly-owned Subsidiaries provision of services to the Company or other direct or indirect wholly-owned Subsidiaries of the Companyany Subsidiary);
(d) issueadopt a plan of complete or partial liquidation, selldissolution, pledgemerger, dispose of consolidation, restructuring, recapitalization or encumber any Company Securities or Company Subsidiary Securities, other reorganization (other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights AgreementMerger);
(e) except as required by applicable Law or pursuant to Section 3.03alter through merger, (i) increase the compensation of directorsliquidation, officers or employees of the Company reorganization, restructuring or any other fashion the corporate structure of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 as the result of the termination or resignation ownership of any officer or employee, or (iv) establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee PlanSubsidiary;
(f) hire (i) incur, assume or forgive any officer long-term or employee, short-term debt or issue any debt securities except for borrowings under existing lines of credit in the replacement ordinary course of business consistent with past practices or trade payables arising in the ordinary course of business consistent with past practices; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any current employee whose employment other person except for obligations of Subsidiaries incurred in the ordinary course of business consistent with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
past practices; (giii) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for other person (w) intercompany loans, advances other than to Subsidiaries or capital contributions entered into in between customary loans or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease practices); (iv) pledge or other disposition in connection with any transaction between or among the Company and/or one or more otherwise encumber shares of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 capital stock of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” Subsidiary 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, Other Interests or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice (v) mortgage or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or pledge any of its wholly-owned Subsidiariesmaterial properties or assets, tangible or intangible, or create or suffer to exist any material Lien thereupon;
(kg) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change as may be required by a change in GAAP or applicable Law;
law, (m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(ri) enter into, terminateadopt, modify amend in any manner or waive terminate any material right underbonus, any Material Contract or Permitprofit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, other than Contracts offer letters, letter agreements and options to purchase Shares entered into with customers new hires in the ordinary course of business consistent with past practice and performance bonuses granted to employees on a basis consistent with the past practices of the Company, (it being understood thatii) enter into, adopt, amend or terminate any pension, retirement, deferred compensation, employment, health, life, or disability insurance, dependent care, severance or other employee benefit plan agreement, trust, fund or other arrangement for the purposes benefit or welfare of this subsectionany director, “officer or employee, other than in the ordinary course of the Company's business consistent with past practice or (iii) increase in any manner the compensation or fringe benefits of any director, officer or employee or consultant or pay any benefit not required by any plan and arrangement as in effect as of the date hereof (including the granting of stock appreciation rights or performance units), except for normal increases in cash compensation in the ordinary course of business consistent with past practice” shall not include entering into ;
(i) acquire, sell, lease, license or dispose of any Contract assets or properties in any single transaction or series of related transactions having terms and conditions a fair market value in excess of One Million Dollars (including terms and conditions regarding pricing and Liabilities$1,000,000) that are, in the aggregate, substantially other than sales or licenses of its products in the ordinary course of business consistent with past practices; (ii) enter into any exclusive license, distribution, marketing, sales or other agreement; (iii) enter into a "development services" or other similar agreement pursuant to which the Company may purchase or otherwise acquire the services of another person, other than in the ordinary course of business consistent with past practices; (iv) acquire, sell, lease, license, transfer, encumber, enforce, or otherwise dispose of any Company Intellectual Property, other than licenses or sales of its products or services in the ordinary course of business consistent with past practices or (v) knowingly, willfully, wantonly, or negligently infringe upon, misappropriate or otherwise violate the rights of any third party intellectual property;
(i) unless required by a change in applicable law or in United States generally accepted accounting principles, change any of the accounting principles, practices or methods used by it;
(j) revalue any of its assets or properties, 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 practices;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, limited liability company, partnership or other person or any division thereof or any equity interest therein; (ii) enter into any Contract other than in the ordinary course of business consistent with past practices that would be material to the Company and its Subsidiaries, taken as a whole; (iii) amend, modify or waive any right under any of its material Contracts; (iv) modify its standard warranty terms for its products or services or amend or modify any product or service warranties in effect as of the date hereof in any material manner that is adverse to the Company or any Subsidiary; (v) enter into any Contract that contains non-competition restrictions, including any restrictions relating to the conduct of the Company's or any Subsidiary's business or the sale of the Company's or any Subsidiary's products or any geographic restrictions, in any case that would prohibit or restrict the Surviving Company or any of its affiliates from conducting the business of the Company or any Subsidiary as presently conducted or (vi) authorize any new capital expenditure other than as set forth in Section 4.1(k) of the Parent Disclosure Letter up to an aggregate amount equal to One Million Dollars ($1,000,000);
(l) make or rescind any express or deemed election relating to Taxes or settle or compromise any Tax liability or enter into any closing or other agreement with any Tax authority; or file or cause to be filed any amended Tax Return, file or cause to be filed claim for refund of Taxes previously paid, or agree to an extension of a statute of limitations with respect to the assessment or determination of Taxes;
(m) fail to file any Tax Returns when due, fail to cause such Tax Returns when filed to be true, correct and complete, prepare or fail to file any Tax Return of the Company in a manner inconsistent with past practices in preparing or filing similar Tax Returns in prior periods 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, in each case, except to the terms and conditions found in other Contracts extent required by applicable law; or fail to pay any Taxes when due;
(n) settle or compromise any pending or threatened suit, action or claim that (i) relates to the transactions contemplated hereby or (ii) the settlement or compromise of similar size and scope previously entered into which would require the payment by the Company or any Subsidiary of its Subsidiaries damages in excess of Five Hundred Thousand Dollars ($500,000) or involves any equitable relief;
(o) knowingly take any action that would result in a failure to maintain trading of the Shares on the Nasdaq National Market;
(p) take any action that results in the ordinary course acceleration of business)vesting of any Company Stock Option, except as may be required pursuant to any agreement in effect as of the date hereof;
(q) allow any Insurance Policy to be amended or terminated without replacing such policy with a policy providing at least equal coverage, insuring comparable risks and issued by an insurance company financially comparable to the prior insurance company; or
(sr) take or agree in writing or commit otherwise to do take any of the foregoingactions described in Sections 4.1(a) through 4.1(q). Nothing contained in Notwithstanding the foregoing and any other provision of this Agreement Agreement, neither Parent nor Acquisition shall give Parent, directly or indirectly, have the right to control or direct the Company’s or its Subsidiaries’ 's operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries toExcept as permitted or contemplated by this Agreement or as required by applicable Law, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement unless Purchaser otherwise consents in writing (which consent will not be unreasonably withheld or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewithdelayed), the Company shall, and shall cause each of its Subsidiaries to, : (x) conduct its business in the ordinary course consistent with past practice; (y) use its commercially reasonable efforts to comply in all material respects with all applicable Laws and the requirements of all Material Contracts; and (z) use commercially reasonable efforts to: (i) maintain and preserve substantially intact its business organization and its Subsidiaries’ business organization, to keep available the services goodwill of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons those having business relationships with it; and (ii) retain the services of its present officers and key employees. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted or contemplated by this Agreement or Agreement, as set forth in Section 6.01 of the Company Disclosure Letter on Schedule 5.2 or as required by applicable Law, during the period from the date of this Agreement until the Effective Time, the Company shall not, nor and shall it not permit any of its Subsidiaries to, without the prior written consent of Parent to unless Purchaser otherwise consents in writing (which such consent shall not be unreasonably withheld or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(ci) declare, set aside or pay any dividend dividends on, or distribution make any other distributions (whether in cash, stocksecurities or other property) in respect of any of the capital stock of the Company or any of its Subsidiaries (other than dividends and distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent); (ii) adjust, property split, combine or otherwise) reclassify any of the capital stock of the Company or any of its Subsidiaries or issue or authorize the issuance of any other securities in respect of, in lieu of or enter into in substitution for shares of capital stock or any Contract with respect to other securities of the voting ofCompany or any of its Subsidiaries; or (iii) purchase, redeem or otherwise acquire any shares of its capital stock (or any other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to securities of the Company or any of its Subsidiaries or any rights, warrants or options to acquire any such shares or other direct or indirect wholly-owned Subsidiaries of the Company)securities;
(db) issue, deliver, sell, pledgegrant, pledge or otherwise dispose of or encumber any shares of capital stock of the Company Securities or Company Subsidiary Securitiesany of its Subsidiaries, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible or exchangeable securities (other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option Eligible Options outstanding under Company Stock Plans as of on the date of this Agreement in accordance with its terms, or (ii) and listed on Section 3.2 hereto in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees terms of the applicable Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Stock Plan;
(fc) hire incur any officer indebtedness for borrowed money or employee, except for the replacement of guarantee any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Companyindebtedness, other than in the case of obsolete equipment or assets being replacedthan, in each case in the ordinary course of business consistent with past practice;
(d) sell, in each case excluding any transfer, lease, license, mortgage, encumber or subject to any Lien or otherwise dispose of (including pursuant to a sale-leaseback transaction or an asset securitization transaction) any of its properties or assets (including securities of Subsidiaries) to any Person, lease except: (i) sales of merchandise in the ordinary course of business; (ii) pursuant to Contracts in force at the date of this Agreement and disclosed to Purchaser; or (iii) dispositions of obsolete assets;
(e) make any capital expenditures, except in the ordinary course of business consistent with past practice;
(f) make any acquisition (by purchase of securities or assets, merger, consolidation or otherwise) of any other Person, business or division or make any investment (by contribution to capital, property transfers, purchase of securities or otherwise) in, or loan to, or any guarantee for the benefit of, any Person;
(g) enter into, or materially amend, modify or supplement any Material Contract outside the ordinary course of business consistent with past practice (except as may be necessary for the Company to comply with its obligations hereunder) or waive, release, grant, assign or transfer any of its material rights or claims (whether such rights or claims arise under a Material Contract or otherwise) or settle any material litigation or claim made against the Company;
(h) enter into any joint venture, general or limited partnership agreement, limited liability company agreement or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiariessimilar agreement;
(i) amend the Company Charter Documents or the Subsidiary Documents;
(j) adopt or effect a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, merger, consolidation or other reorganization;
(j) 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;; or
(k) institute anyauthorize any of, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle commit or agree in writing or otherwise, to settle take any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(s) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectlyof, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsforegoing actions.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement until to the earlier to occur of (x) the date of the termination of this Agreement in accordance with its terms and (y) the Effective Time, except (i) as set forth in Section 5.01 of the Disclosure Schedule, (ii) as expressly contemplated by this Agreement or Agreement, (iii) as required by applicable Law or with the prior written a Governmental Authority, or (iv) as consented to in writing by Parent (such consent of Parentnot to be unreasonably withheld, conduct its business in the ordinary course of business, and, to the extent consistent therewithconditioned or delayed), the Company shall, and shall cause each of its Subsidiaries to, (A) conduct its business in all material respects in the ordinary course of business and, to the extent consistent therewith, use its commercially reasonable efforts to preserve substantially intact its current business organization and maintain relationships with Governmental Authorities, its significant customers, suppliers and distributors and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having with which it has significant business relationships relations and (B) reasonably consult with itParent regarding any material changes in the Company’s strategy. Without In addition to and without limiting the generality of the foregoing, between during the period from the date of this Agreement to the earlier to occur of (x) the date of the termination of this Agreement in accordance with its terms and (y) the Effective Time, except as otherwise expressly contemplated by this Agreement or (i) as set forth in Section 6.01 5.01 of the Company Disclosure Letter or Schedule, (ii) as expressly contemplated by this Agreement, (iii) as required by applicable LawLaw or a Governmental Authority, or (iv) as consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall not, nor and shall it permit cause its Subsidiaries not to, take any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):following actions:
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(bi) split, combine or reclassifyreclassify any shares of its capital stock, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(cii) declare, set aside or pay any dividend or make any other distribution (whether in cash, stock, property or otherwiseany combination thereof) in respect of, or enter into any Contract with respect to the voting of, of any shares of its capital stock or other securities (other than dividends or distributions from by any of its direct or indirect wholly-owned Subsidiaries Subsidiaries), or (iii) redeem, repurchase, cancel, or otherwise acquire or offer to redeem, repurchase or otherwise acquire, directly or indirectly, any of its securities or any securities of any of its Subsidiaries, except for redemptions, repurchases, cancellations or other acquisitions (A) required (or permitted in connection with any net share settlement or Tax withholding) by the terms of the Company Equity Plan or any award agreement thereunder or (B) required by the terms of any other plans, arrangements or Contracts existing on the date hereof, as set forth in Section 5.01(a) of the Disclosure Schedule, between the Company or other direct any of its Subsidiaries, on the one hand, and any director, employee or indirect wholly-owned Subsidiaries equityholder of the Company)Company or any of its Subsidiaries, on the other hand;
(db) issue, sell, pledge, grant, transfer, dispose of of, enter into any Contract with respect to, or encumber any Company Securities shares of its capital stock or Company Subsidiary Securitiesother equity interests or securities exercisable or convertible into, or exchangeable or redeemable for, any such shares or other than equity interests, or any rights, warrants, options, calls, or commitments to acquire any such shares or other equity interests, except for (i) issuances or sales of any of the issuance foregoing to the Company or any wholly-owned Subsidiary of the Company and (ii) issuances of shares of Company Common Stock upon the exercise of any Company Stock Option Options or upon the vesting of Restricted Shares, in each case as outstanding under on the date hereof in accordance with Section 2.07(d)(iv);
(c) voluntarily adopt or publicly propose a plan of merger, consolidation, complete or partial liquidation or dissolution of the Company Stock Plans or any of its Subsidiaries or otherwise enter into any agreements or arrangements imposing changes or restrictions on its assets, operations or businesses that are material to the Company and its Subsidiaries taken as a whole;
(d) amend its Organizational Documents;
(e) acquire or dispose (directly or indirectly, by merger, consolidation or acquisition or disposition of stock or other equity interests or of assets) of any Person or any business or division thereof;
(f) incur, assume or guarantee any Indebtedness;
(g) make any loans or advances to any Person, other than loans or advances (i) by the Company to any of its wholly-owned Subsidiaries, or by any of the Company’s wholly-owned Subsidiaries to another wholly-owned Subsidiary of the Company, (ii) advances to customers made in the ordinary course of business consistent with past practice, or (iii) required by any Contract or other legal obligation of the Company or any of its Subsidiaries in existence as of the date of this Agreement as set forth in accordance with its termsSection 5.01(g) of the Disclosure Schedule;
(h) acquire, transfer, assign, divest, sell, lease, license, permit or suffer to exist the creation of any Lien upon, or otherwise dispose of any Subsidiary or any material amount of assets, securities or property (iiincluding Owned Intellectual Property) except as permitted pursuant to Contracts existing as of the date hereof as set forth on Section 5.01(h) of the Disclosure Schedule;
(i) abandon or allow any material Owned Intellectual Property to lapse or expire;
(j) settle any Action against the Company or any of its Subsidiaries (other than Actions arising in connection with this Agreement or the transactions contemplated hereby, which are governed by Section 5.11), other than settlements of Actions where the amount paid by the Company or any of its Subsidiaries (less the amount reserved for such matters by the Company and less the amount of any insurance recoveries) in settlement does not exceed $100,000 individually or $300,000 in the aggregate and that would not result in the imposition of any writ, judgment, decree, settlement, award, injunction or similar order of any Governmental Authority that would restrict the future activity or conduct of the Company or any of its Subsidiaries or a finding or admission of a violation of Law or violation of the rights of any Person;
(k) materially change its accounting or Tax reporting methods, principles or policies, except as may be required by Law or GAAP;
(l) make, change or revoke any material Tax election, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any material Tax claim, audit, assessment or dispute, surrender any right to claim a refund of a material amount of Taxes, take any action which is reasonably likely to result in a material increase in the Tax liability of the Company or its Subsidiaries, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent or its Affiliates;
(m) make or authorize any capital expenditure, other than capital expenditures that are not, individually, in excess of $75,000 or, in the aggregate for the Company and its Subsidiaries taken as a whole, in excess of $300,000;
(n) assign, transfer, lease, cancel, fail to renew or fail to extend any Permit issued by the FCC or any other Governmental Authority or discontinue any operations that require prior regulatory approval for discontinuance;
(o) enter into any line of business in any geographic area other than the lines of business of the Company and its Subsidiaries as of the date hereof;
(p) enter into any contract that would have been a Material Contract or Real Property Lease had it been entered into prior to this Agreement, or amend, modify or terminate any Material Contract or Real Property Lease in any material respect, other than expirations of any such Material Contract in the ordinary course of business in accordance with the Stockholder Rights Agreementterms of such Contract, or cancel, modify or waive any material matured debts or material claims held by it or waive any material rights under any Material Contract or Real Property Lease;
(eq) except other than as required by applicable Law any Contract or pursuant to Section 3.03Benefit Plan in existence as of the date of this Agreement, (i) increase the amount of compensation or benefits payable to any employee, officer, individual independent contractor or director of the Company or any of its Subsidiaries, including as a result of making any promotion, changing job titles or reclassifying any employee, officer, individual independent contractor or director of the Company or any of its Subsidiaries, other than annual increases in employees’ wage or salary, in the ordinary course of business, consistent with past practice, with respect to any employee whose annual compensation is not in excess of $100,000 and which increases do not exceed 5% for any individual employee or 3% for all employees of the Company and its Subsidiaries, (ii) grant any rights to 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 of its Subsidiaries, (iii) take any action to amend or waive any vesting criteria or accelerate vesting, exercisability or funding under any Benefit Plan or award granted thereunder, (iv) grant any new awards, or amend or modify the terms of any outstanding awards, under any Benefit Plan, (v) forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business) to any employee of the Company or its Subsidiaries, (vi) hire any employee or engage any independent contractor (who is a natural person) with an annual salary or wage rate or consulting fees in excess of $100,000 individually, (vii) terminate the employment of any officer other than for cause; (viii) become a party to, establish, adopt, terminate or amend in any material respect any Benefit Plan or any arrangement that would have been a Benefit Plan has it been entered into prior to this Agreement; or (ix) become a party to any consulting Contract, other than any such Contract that can be terminated on thirty (30) days’ or fewer notice and without payment of a penalty;
(r) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization;
(s) make any written or oral communications to the directors, officers or employees of the Company or any of its Subsidiaries, (ii) enter into any new Subsidiaries addressing how existing compensation or amend in any material respect, any existing employment, severance, retention benefit matters will or change in control agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect may be affected by the transactions contemplated by this Agreement prior to employees providing Parent with a base salary of less than $60,000 as the result copy of the termination or resignation intended communication; provided, that Parent shall have a reasonable period of time to review and comment on the communication, and the Company shall consider any officer or employeesuch comments in good faith; or
(t) authorize any of, or (iv) establish, adopt, enter into, amend, terminate, exercise any discretion under, commit or agree to take any action to accelerate rights under any Company Employee Plansof, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 foregoing actions. Notwithstanding the foregoing, nothing in this Section 5.01 is intended to or incur any Liens other than Permitted Liens shall result in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than any Legal Action brought against ceding control to Parent or Merger Sub arising out of a breach the Company’s or alleged breach of this Agreement by Parent or Merger Sub; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the Subsidiaries’ basic ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(s) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations commercial decisions prior to the Effective Time. Prior , and prior to the Effective TimeClosing Date, the Company and its Subsidiaries shall exercise, consistent with and subject to the terms and conditions of this Agreement, complete control and supervision over its their operations. The Company and its Subsidiaries’ operationsSubsidiaries shall consult with Parent regarding any potential settlement or other action that would or would reasonably be expected to change the regulatory status of the Company or any of its Subsidiaries under the Communications Act and shall give good faith consideration to any concerns raised by Parent with respect thereto.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries toExcept as contemplated by this Agreement, during the period from the date of this Agreement until hereof to the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of ParentCompany will and will cause each Subsidiary to, conduct its business operations in the ordinary course of business, business consistent with past practice and, to the extent consistent therewith, and with no less diligence and effort than would be applied in the Company shallabsence of this Agreement, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts seek to preserve substantially intact its and its Subsidiaries’ current business organizationorganizations, to keep available the services service of its and its Subsidiaries’ current directors, officers and employees, to employees and preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees suppliers and other Persons others having business relationships dealings with itit with the intention that its goodwill and ongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by provided in this Agreement or Agreement, as set forth in Section 6.01 4.1 of the Company Disclosure Letter Letter, or as required by applicable Lawlaw, prior to the Effective Time:
(a) neither the Company shall not, nor shall it permit any of its Subsidiaries toSubsidiary will, without the prior written consent of Parent and Acquisition (which consent may be withheld in Parent’s sole discretion but, if given, shall not be unreasonably withheld or delayeddeemed a consent and waiver for all purposes under this Agreement):
(ai) amend its Memorandum of Association, Articles of Association, Certificate of Incorporation or propose to amend its certificate of incorporation or by-laws Bylaws (or other comparable organizational documentssimilar governing document);
(bii) authorize for issuance, issue, sell, deliver or agree or commit to issue sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or equity equivalents (including any stock options or stock appreciation rights) except for (x) the issuance and sale of Shares pursuant to Company Stock Options granted under the Company Plans prior to the date hereof or in accordance with this Section 4.1, (y) the issuance of Shares pursuant to the Company ESPP at the Final Exercise Date, and (z) the grant of options after the date hereof to newly hired employees of the Company or any Subsidiary or in connection with July 2005 annual reviews, in each case on terms consistent with past practice, provided that the options granted to any such individual shall be exercisable for no more than 20,000 Shares and none of which options shall accelerate in connection with the Merger or any of the other transactions contemplated hereby (or by a “double trigger” after the Merger);
(iii) split, combine or reclassifyreclassify any shares of its capital stock, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or other distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect ofof its capital stock, make any other actual, constructive or enter into any Contract with deemed distribution in respect to the voting of, any shares of its capital stock or otherwise make any payments to shareholders in their capacity as such, or redeem or otherwise acquire any of its securities or any securities of any Subsidiary (other than dividends the repurchase of restricted stock and cancellation of Company Stock Options following termination of employment with or distributions from its direct or indirect wholly-owned Subsidiaries provision of services to the Company or other direct or indirect wholly-owned Subsidiaries of the Companyany Subsidiary);
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 as the result of the termination or resignation of any officer or employee, or (iv) establishadopt a plan of complete or partial liquidation, adoptdissolution, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition restructuring, recapitalization or other reorganization (other than the Merger);
(v) alter through merger, liquidation, reorganization, restructuring or any other fashion the corporate structure of stock the Company’s ownership of any Subsidiary;
(vi) (A) incur, assume or assetsforgive any long-term or short-term indebtedness for borrowed money or issue any debt securities; (B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person except for obligations of Subsidiaries or customary loans or advances to employees for business-related expenses, any in each case in the ordinary course of business or Person or division thereof or consistent with past practices; (C) make any loans, advances or capital contributions to or investments in any Person, except for other person (w) intercompany loans, advances other than to Subsidiaries or capital contributions entered into in between customary loans or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for business-related expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease practices); (D) pledge or other disposition in connection with any transaction between or among the Company and/or one or more otherwise encumber shares of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 capital stock of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” Subsidiary 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 foregoingOther Interests; or (E) mortgage or pledge any of its material properties or assets, tangible or intangible, or incur create or suffer to exist any Liens material Lien thereupon, except for the grant of any non-exclusive licenses to third parties in the ordinary course of business, consistent with past practices;
(vii) except as may be required by applicable law or by this Agreement, (1) enter into, adopt, amend in any manner or terminate any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement other than Permitted Liens offer letters, letter agreements and, subject to subsection (a)(ii) above, options to purchase Shares entered into with new hires in connection the ordinary course of business consistent with past practices, or (2) enter into, adopt, amend in any manner or terminate any pension, retirement, deferred compensation, employment, health, life, or disability insurance, dependent care, severance or other employee benefit plan agreement, trust, fund or other arrangement for the foregoingbenefit or welfare of any director, officer or employee, other than in the financing of ordinary course trade payables of the Company’s business consistent with past practice or pursuant to an existing financing facilityincrease in any manner the compensation or fringe benefits of any director, except for intercompany loans entered into officer or employee or consultant or pay any benefit not required by any plan and arrangement as in between effect as of the date hereof (including the granting of stock appreciation rights or among the Company and/or any of its wholly-owned Subsidiariesperformance units);
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(mviii) enter into any material agreementexclusive license, agreement in principledistribution, letter of intentmarketing, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset sales or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permitagreement, other than Contracts consulting agreements entered into with customers in the ordinary course of business consistent with past practice that are exclusive on the part of the consultant only;
(it being understood thatix) accelerate the vesting of any Company Stock Option (except pursuant to acceleration provisions in existence prior to the date hereof and listed in Section 2.2 of the Disclosure Letter);
(x) accept any Grants from any Governmental Entity;
(xi) adopt any rights agreement or issue any preferred stock purchase rights;
(A) acquire (by merger, for consolidation or acquisition of stock or assets) any corporation, limited liability company, partnership or other person or any division thereof or any equity interest therein or (B) enter into any Contract other than in the purposes ordinary course of this subsection, “business consistent with past practice” practices that would be material to the Company and its Subsidiaries, taken as a whole; or
(xiii) take or agree in writing or otherwise to take any of the actions described in Sections 4.1(a)(i) through 4.1(a)(xii); and
(b) neither the Company nor any Subsidiary will, without the prior written consent of Parent and Acquisition (which consent shall not include entering be unreasonably withheld, conditioned or delayed and, if given, shall be deemed a consent and waiver for all purposes under this Agreement):
(i) (A) acquire, sell, lease license or dispose of any assets or properties in any single transaction or series of related transactions having a fair market value in excess of $50,000 per month in the aggregate, other than sales, leases or licenses of its products in the ordinary course of business consistent with past practices, acquisitions of hardware components in the ordinary course of business consistent with past practice or acquisitions set forth in Section 4.1(b)(i)(A) of the Disclosure Letter; (B) enter into a “development services” or other similar agreement pursuant to which the Company or any Contract having Subsidiary is purchasing or otherwise acquiring the services of another person; or (C) acquire, sell, lease, license, transfer or otherwise dispose of any Intellectual Property, in each case other than licenses or sales of its products in the ordinary course of business consistent with past practices;
(ii) unless required by a change in applicable law or in US GAAP, change any of the accounting principles, practices or methods used by it;
(iii) unless required by a change in applicable law or in US GAAP, revalue any of its assets or properties, 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 practices;
(iv) (A) amend, modify or waive any material right under any of its Material Contracts; (B) modify its standard warranty terms and conditions for its products or services or amend or modify any product or service warranties in effect as of the date hereof in any material manner that is adverse to the Company or any Subsidiary; or (including terms and conditions regarding pricing and LiabilitiesC) authorize any new capital expenditure that areexceeds $50,000 per month in the aggregate or authorize any new capital expenditures that, in the aggregate, substantially exceed $500,000 from the date hereof until the Effective Time, other than the capital expenditures set forth in Section 4.1(b)(iv)(C);
(v) make or rescind any express or deemed material election relating to Taxes or settle or compromise any Tax liability or enter into any closing or other agreement with any Tax Authority; or file or cause to be filed any amended Tax Return, file or cause to be filed claim for refund of Taxes previously paid, or agree to an extension of a statute of limitations with respect to the assessment or determination of Taxes;
(vi) fail to file any Tax Returns when due, fail to cause such Tax Returns when filed to be true, correct and complete, prepare or fail to file any Tax Return of the Company or any Subsidiary in a manner inconsistent with past practices in preparing or filing similar Tax Returns in prior periods 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, in each case, except to the terms and conditions found in other Contracts extent required by applicable law; or fail to pay any Taxes when due;
(vii) settle or compromise any pending or threatened suit, action or claim that (i) relates to the transactions contemplated hereby or (ii) the settlement or compromise of similar size and scope previously entered into which would require the payment by the Company or any Subsidiary of its Subsidiaries damages in the ordinary course excess of business); or$250,000 or that involves any injunction or other equitable relief;
(sviii) knowingly take any action that would result in a failure to maintain trading of the Shares on the Nasdaq National Market;
(ix) allow any Insurance Policy to be amended or terminated without replacing such policy with a policy providing comparable coverage, insuring comparable risks and issued by an insurance company financially comparable to the prior insurance company;
(x) take or agree in writing or commit otherwise to do take any of the foregoing. Nothing contained actions described in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsSections 4.1(b)(i) through 4.1(b)(ix).
Appears in 1 contract
Samples: Merger Agreement (Verisity LTD)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries toExcept as contemplated by this Agreement or as otherwise set forth on Schedule 7.1, during the period from the date of this Agreement until to the Effective Time, except as expressly contemplated by earlier of the Closing Date and the termination of this Agreement or as required by applicable Law or in accordance with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewithArticle 10, the Company shall, and shall shall, subject to applicable Law, cause each of its the Company Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its conduct their respective business and its Subsidiaries’ business organization, to keep available operations in the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries toordinary course and, without the prior written consent of Parent the Buyer (which consent shall not be unreasonably withheld or delayed):; provided, that the Buyer shall respond as soon as reasonably practicable but in no event later than three (3) Business Days following receipt of the Company’s written request for such response), shall not undertake any of the following actions:
(a) amend issue, sell or pledge, or authorize or propose the issuance, sale or pledge of (i) additional shares of any class in the capital of the Company (including the Shares) or any Company Subsidiary, or securities convertible into or exchangeable for any such shares, or any rights, warrants or options to amend its certificate acquire any such shares or other convertible securities of the Company or any Company Subsidiary or (ii) any other securities in respect of, in lieu of, or in substitution for shares in the capital of the Company (including the Shares) or any Company Subsidiary outstanding on the date hereof;
(b) adopt any amendment to the articles of incorporation or by-laws (or other comparable organizational documents);
(b) split, combine of the Company or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securitiesother than to facilitate the transactions contemplated hereby;
(c) declare, set aside or pay incur any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock Indebtedness (other than dividends ordinary course borrowings under the Assumed Indebtedness and the Parent Debt and other performance bonds or distributions from its direct or indirect wholly-owned Subsidiaries to letters of credit entered into in the Company or other direct or indirect wholly-owned Subsidiaries ordinary course of the Companybusiness consistent with past practice);
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) increase in any material manner the issuance rate or terms of shares of Company Common Stock upon the exercise compensation or benefits of any Company Stock Option outstanding of its directors, or officers, except as may be required under Company Stock Plans existing employment agreements or such increases as are granted in the ordinary course of the date of this Agreement in accordance business consistent with its termspast practices, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required pay or agree to pay any pension, retirement allowance or other employee benefit not contemplated by applicable Law or pursuant any Company Plan to Section 3.03any director, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 as the result of the termination or resignation of any officer or employee, whether past or present, other than in the ordinary course of business consistent with past practice or as required by Law, or (iviii) establish, adopt, enter into, amendadopt or amend any employment, terminatebonus, exercise severance or retirement contract or adopt any discretion underemployee benefit plan, in each case other than in the ordinary course of business consistent with past practices or take as required by Law;
(i) except in the ordinary course of business consistent with past practices, sell, lease, transfer or otherwise dispose of, any action to accelerate rights under of its material property or assets or (ii) create any Company Employee Plans, Encumbrance (other than a Permitted Encumbrance) on any material property or make any contribution to any Company Employee Planassets;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Personcontributions, except advances for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising travel and other normal business expenses to officers and employees in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessconsistent with past practices;
(hg) transfermaterially amend, license, sell, lease or otherwise dispose of any assets (whether by way of merger, consolidation, sale of stock or assetsbecome subject to, or otherwise), including the capital stock terminate any Material Contract or other equity interests in any Subsidiary of the Company, Lease (other than in the case of obsolete equipment (x) bidding for, entering into, renewing or assets being replaced, in each case replacing contracts with customers or suppliers in the ordinary course of business consistent with past practice, (y) terminations of contracts and Leases as a result of the expiration of the term of such contracts or Leases and (z) bidding for, entering into, renewing or replacing Leases in each case excluding any transfer, license, sale, lease the ordinary course of business consistent with past practice);
(h) materially and adversely change or other disposition in connection terminate an existing relationship with any transaction between or among Material Carrier having business dealings with the Company and/or one or more of its wholly-owned Subsidiariesany Company Subsidiary;
(i) adopt acquire any business or effect Person, by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a plan single transaction or a series of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationrelated transactions;
(j) incur write off as uncollectible any indebtedness for borrowed money notes 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facilityaccounts receivable, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers write offs in the ordinary course of business consistent with past practice charged to applicable reserves;
(it being understood that, for the purposes k) make any change in any method of this subsection, “consistent with past practice” shall not include entering accounting or auditing practice other than those required by IFRS;
(l) enter into any Contract having terms transaction with an Affiliate (other than any transaction between the Company and conditions a Company Subsidiary or between Company Subsidiaries);
(including terms and conditions regarding pricing and Liabilitiesm) that aremake or change any material Tax election, in the aggregatefile any material amended Tax Return, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by change any Tax accounting period or settle any material Tax claim relating to the Company or any of its Subsidiaries the Company Subsidiaries;
(n) cancel or reduce any insurance coverage other than with respect to any Company Plan in the ordinary course of business)business consistent with past practice;
(o) undertake any material change to the operation of the business as currently conducted by the Company and the Company Subsidiaries; or
(sp) agree or commit in writing to do take any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsforegoing actions.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, (a) From and shall cause each of its Subsidiaries to, during the period from after the date of this Agreement until the Effective Timeearlier of the Closing or the termination of this Agreement in accordance with its terms, the Company shall, and the Company shall cause its Subsidiaries to, except as expressly contemplated by this Agreement or any Ancillary Document, as required by applicable Law or with the prior written consent Law, as set forth on Section 5.1(a) of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewith, the Company shallDisclosure Schedules, and or as consented to in writing by SPAC (it being agreed that any request for a consent shall cause each of its Subsidiaries tonot be unreasonably withheld, conditioned or delayed), use its commercially reasonable efforts to (i) conduct and operate the business of the Group Companies in the ordinary course in all material respects, (ii) maintain and preserve substantially intact its and its Subsidiaries’ in all material respects the business organization, to assets, properties and material business relations of the Group Companies, taken as a whole, (iii) keep available the services of its and its Subsidiaries’ current the present officers and employees, to Key Employees of the Company and (iv) preserve its existing relations and its Subsidiaries’ present relationships goodwill of the Group Companies with customers, suppliers, distributors, licensors, licensees distributors and other Persons having business relationships with it. creditors of the Group Companies.
(b) Without limiting the generality of the foregoing, between from and after the date of this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with its terms, the Company shall, and the Effective TimeCompany shall cause its Subsidiaries to, except as otherwise expressly contemplated by this Agreement or any Ancillary Document, as required by applicable Law (including COVID-19 Measures), as set forth in on Section 6.01 5.1(b) of the Company Disclosure Letter Schedules or as required consented to in writing by applicable LawSPAC (such consent, the Company shall notnot to be unreasonably withheld, nor shall it permit conditioned or delayed), not do any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):following:
(ai) amend declare, set aside, make or propose to amend its certificate pay a dividend on, or make any other distribution or payment (whether in cash, stock or property) in respect of, any Equity Securities of incorporation any Group Company or by-laws (Merger Sub or other comparable organizational documents);
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any outstanding Equity Securities of any Group Company Securities or Company Subsidiary Securities;
Merger Sub, other than (cx) declaredividends or distributions, declared, set aside or pay paid by any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to of the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Company’s Subsidiaries to the Company or other direct any Subsidiary that is, directly or indirect wholly-indirectly, wholly owned by the Company and (y) any dividends or distributions required under the Governing Documents of any joint venture of any Subsidiaries of the Company);
(dii) (A) merge, consolidate, combine or amalgamate any Group Company or Merger Sub with any Person or (B) purchase or otherwise acquire (whether by merging or consolidating with, purchasing any Equity Security in or a substantial portion of the assets of, or by any other manner) any corporation, partnership, association or other business entity or organization or division thereof, other than such acquisitions and purchases that would not require financial statements of the acquired business to be included in the Registration Statement / Proxy Statement pursuant to Rule 3-05 of Regulation S-X under the Securities Act;
(iii) adopt any amendments, supplements, restatements or modifications to any Group Company’s or Merger Sub’s Governing Documents;
(iv) transfer, issue, sell, pledgegrant or otherwise directly or indirectly dispose of, dispose or subject to a Lien, (A) any Equity Securities of any Group Company or encumber Merger Sub or (B) any options, restricted stock, warrants, rights of conversion or other rights, agreements, arrangements or commitments obligating any Group Company or Merger Sub to issue, deliver or sell any Equity Securities or Company Subsidiary Securitiesof any Group Company, other than (i) the issuance of shares of capital stock of the Company Common Stock upon the exercise of any Company Stock Option Equity Award outstanding under Company Stock Plans as of on the date of this Agreement in accordance with its termsthe terms of the applicable Company Equity Plan and the underlying grant, award or (ii) similar agreement or the issuance of Company Options in accordance with the Stockholder Rights Agreementterms of employment agreements;
(ev) except as required by applicable Law incur, create or pursuant to Section 3.03assume any Indebtedness in excess of $500,000, other than (x) ordinary course trade payables, (iy) increase the compensation of directors, officers or employees of between the Company or and any of its wholly owned Subsidiaries or between any of such wholly owned Subsidiaries or (z) in connection with borrowings, extensions of credit and other financial accommodations under the Company’s and Subsidiaries’ existing credit facilities, (ii) enter into any new or amend notes and other existing Indebtedness and, in any material respecteach case, any existing employment, severance, retention or change in control agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Planrefinancings thereof;
(fvi) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to to, or guarantees for the benefit of, or any investments in in, any Person, except for other than (wA) intercompany loans, advances loans or capital contributions entered into in between or among the Company and/or and any of its wholly-wholly owned Subsidiaries, (xB) trade payables arising the reimbursement of expenses of employees in the ordinary course of business and consistent with past practice, (C) prepayments and deposits paid to suppliers of any Group Company in the ordinary course of business, (yD) advances trade credit extended to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 customers of the Company, other than in the case of obsolete equipment or assets being replaced, in each case Group Companies in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among and (D) advances to wholly owned Subsidiaries of the Company and/or one or more of its wholly-owned SubsidiariesCompany;
(vii) except (x) as forth in Section 5.1(b)(vii) of the Company Disclosure Schedules, (y) as required under the existing terms of any Employee Benefit Plan of any Group Company that is set forth on Section 3.11(b) of the Company Disclosure Schedules or (z) as required by any applicable Law, (A) amend, modify, adopt, enter into or terminate any Employee Benefit Plan of any Group Company or any other benefit or compensation plan, policy, program, agreement, trust, fund or Contract that would be an Employee Benefit Plan if in effect as of the date of this Agreement, (B) increase or decrease the compensation or benefits payable to any current or former director, manager, officer, employee, individual independent contractor or other service provider of any Group Company, (C) accelerate, by any action or omission of any Group Company, any payment, right to payment, vesting or benefit, or the funding of any payment, right to payment, vesting or benefit, payable or to become payable to any current or former director, manager, officer, employee, individual independent contractor or other service provider of any Group Company or (D) waive or release any noncompetition, non-solicitation, no-hire, nondisclosure or other restrictive covenant obligation of any current or former director, manager, officer, employee, individual independent contractor or other service provider of any Group Company;
(viii) (i) adopt modify, extend, terminate, negotiate, or effect enter into any CBA or (ii) recognize or certify any labor union, works council, or other labor organization or group of employees of the Group Companies as the bargaining representative for any employees of the Group Companies;
(ix) hire, engage, terminate (without cause), furlough, or temporarily lay off any employee or independent contractor with annual target compensation in excess of $200,000;
(x) implement or announce any closings, employee layoffs, furloughs, reductions-in-force, reduction in terms and conditions of employment, or other personnel actions that could implicate the WARN Act;
(xi) make, change or revoke any election concerning Taxes (including, for the avoidance of doubt, making any U.S. federal income Tax entity classification election pursuant to Treasury Regulations Section 301.7701-3(c) with respect to the Company or any Company Subsidiary not otherwise contemplated by this Agreement), change or otherwise modify any method of accounting as such relates to Taxes, amend any income or other material Tax Return, surrender any right to claim a refund of income or other material Taxes, enter into any Tax closing agreement, settle any Tax claim or assessment, change its jurisdiction of Tax residence, or consent to any extension or waiver of the limitation period applicable to or relating to any Tax claim or assessment;
(xii) enter into any settlement, conciliation or similar Contract outside of the ordinary course of business the performance of which would involve the payment by the Group Companies in excess of $500,000, in the aggregate, or that imposes, or by its terms will impose at any point in the future, any material, non-monetary obligations on any Group Company (or SPAC or any of its Affiliates after the Closing);
(xiii) authorize, recommend, propose or announce an intention to adopt, or otherwise effect, a plan of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, reorganization or other reorganizationsimilar transaction involving any Group Company;
(jxiv) incur change any indebtedness for borrowed money or guarantee Group Company’s methods of accounting in any such indebtedness of another Personmaterial respect, 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, than changes that are made in accordance with PCAOB standards;
(xv) enter into any “keep well” Contract with any broker, finder, investment banker or other Contract Person under which such Person is or will be entitled to maintain any financial statement condition of any brokerage fee, finders’ fee or other Person (other than any wholly-owned Subsidiary of it) or enter into any arrangement having the economic effect of any of the foregoing, or incur any Liens other than Permitted Liens commission in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as transactions contemplated by this Agreement;
(rxvi) except for entries, modifications, amendments, waivers, terminations or non-renewals in the ordinary course of business, enter into, terminatematerially modify, modify or materially amend, waive any material right under, terminate (excluding any expiration in accordance with its terms) or fail to renew, any Contract required to be disclosed on Section 3.19 of the Company Disclosure Schedules (excluding, for the avoidance of doubt, any expiration or automatic extension or renewal of any such Material Contract pursuant to its terms) or Permitany Real Property Lease;
(xvii) fail to maintain the Leased Real Property in substantially the same condition as of the date of this Agreement, other than Contracts entered into with customers in the ordinary course of business consistent with past practice wear and tear, casualty and condemnation;
(it being understood thatxviii) abandon, for the purposes of this subsectionsell, “consistent with past practice” shall not include entering into assign, or exclusively license any Contract having terms and conditions material Company Owned Intellectual Property to any Person (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries than in the ordinary course of business);
(xix) sell, lease, license, encumber or otherwise dispose of any properties or assets except for the sale, lease, license, or disposition in the ordinary course of business;
(xx) close any facility or discontinue any material line of business or material business operations; or
(sxxi) agree (y) suffer any Lien on or commit transfer, let lapse, abandon or dispose of any material Company Owned Intellectual Property or (z) license any Company Owned Intellectual Property, except for non-exclusive licenses granted in the ordinary course of business; or
(xxii) enter into any Contract to do take, or cause to be taken, any of the foregoingactions set forth in this Section 5.1. Nothing contained Notwithstanding anything in this Section 5.1 or this Agreement to the contrary, (a) nothing set forth in this Agreement shall give ParentSPAC, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations of the Group Companies prior to the Effective Time. Prior Closing, (b) any action taken, or omitted to be taken, by any Group Company to the Effective Timeextent such act or omission is reasonably determined by the Company, based on the advice of outside legal counsel, to be necessary to comply with any Law, Order, directive, pronouncement or guideline issued by a Governmental Entity providing for business closures, “sheltering-in-place” or other restrictions that relates to, or arises out of, COVID-19 shall in no event be deemed to constitute a breach of this Section 5.1 and (c) any action taken, or omitted to be taken, by any Group Company to the extent that the board of directors of the Company reasonably determines that such act or omission is necessary in response to COVID-19 to maintain and preserve in all material respects the business organization, assets, properties and material business relations of the Group Companies, taken as a whole, shall not be deemed to constitute a breach of this Section 5.1; provided, however, (i) in the case of each of clause (b) and (c), the Company shall exercisegive SPAC prior written notice of any such act or omission to the extent reasonably practicable, consistent with which notice shall describe in reasonable detail the terms act or omission and conditions the reason(s) that such act or omission is being taken, or omitted to be taken, pursuant to clause (b) or (c) and, in the event that it is not reasonably practicable for the Company to give the prior written notice described in this clause (i), the Company shall instead give such written notice to SPAC promptly after such act or omission and (ii) in no event shall clause (b) or (c) be applicable to any act or omission of this Agreementthe type described in Section 5.1(b)(i), complete control and supervision over its and its Subsidiaries’ operationsSection 5.1(b)(ii), Section 5.1(b)(iii), Section 5.1(b)(iv), Section 5.1(b)(vii), Section 5.1(b)(viii), Section 5.1(b)(x) or Section 5.1(b)(xii) (to the extent related to any of the foregoing).
Appears in 1 contract
Samples: Business Combination Agreement (Software Acquisition Group Inc. II)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date ---------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company agrees (except as expressly contemplated by this Agreement or as required by applicable Law or with to the prior written extent that Parent shall otherwise consent of Parentin writing), conduct to carry on its business in the usual, regular and ordinary course of in substantially the same manner as heretofore conducted (recognizing that the Company is aggressively expanding its business), to pay debts and Taxes when due, to pay or perform other obligations when due, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries towith such business, use its commercially all reasonable efforts consistent with past practice and policies to preserve substantially intact its and its Subsidiaries’ the Company's present business organization, to keep available the services of its and its Subsidiaries’ current present officers and employees, to key employees and preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees licensees, and other Persons others having business relationships dealings with it. Without limiting , all with the generality goal of preserving unimpaired the foregoing, between the date of this Agreement Company's goodwill and ongoing businesses 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. Except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable LawAgreement, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Parent:
(a) amend Enter into any commitment or propose transaction which (i) creates a capital expenditure or commitment by the Company, either individually or in the aggregate, exceeding $50,000; (ii) destroys, damages or results in the loss of any material assets, business or customer of the Company (whether or not covered by insurance); (iii) materially extends or modifies the terms of any agreement which (1) involves the payment of greater than $50,000 per annum or which extends for more than one year, (2) involves any payment or obligation to amend its certificate any affiliate of incorporation the Company other than in the ordinary course of business as conducted on that date and consistent with past practices, or by-laws (or other comparable organizational documents)iv) involves the sale of any material assets;
(b) Change any accounting method or practice (including any change in depreciation or amortization policies or rates) by the Company;
(c) Sell, lease, license or otherwise dispose of material assets or properties of the Company, or create any security interest in such assets or properties except in the ordinary course of business as consistent with past practices;
(d) Advance a loan to any person or entity, incur any indebtedness, guarantee any indebtedness, issue or sell of any debt securities of the Company or guarantee any debt securities of others; except for incurring trade debt or ------ making advances to employees for travel and business expenses in the ordinary course of business and consistent with past practices;
(e) Waive or release any right or claim of the Company, including a write-off or other compromise of any account receivable of the Company; except ------ for any waiver or release in connection with the Xxxxx Action;
(f) Change the price or royalties set or charged by the Company to its customers or licensees or in pricing or royalties set or charged by persons who have licensed Intellectual Property (as defined in Section 2.13 hereof) to the Company; except where the maximum possible effect of such change will not exceed ------ an aggregate $2 million;
(g) Amend or terminate any material contract, agreement or license to which the Company is a party or by which it is bound;
(h) Except in the ordinary course of business, transfer to any person or entity any rights to the Intellectual Property of the Company;
(i) Enter into or amend any agreement pursuant to which any other party is granted marketing, distribution or similar rights of any type or scope with respect to any products or services of the Company; except for agreements ------ in the ordinary course of business which provide for the payment of commissions or finder's fees;
(j) Amend or otherwise modify (or agree to do so), except in the ordinary course of business, or violate in a material way any of the agreements set forth or described in Exhibit F; ---------
(k) Commence any litigation; except in connection with the Xxxxx ------ Action;
(l) 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 reclassifyreclassify 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, or repurchase, redeem or otherwise acquire, directly or offer to repurchase, redeem or otherwise acquireindirectly, any shares of its capital stock (or options, warrants or other rights exercisable therefor); except for ------
(i) securities issued in connection with the exercise of Company Securities Options and the conversion of any Preferred Stock, and (ii) options granted for up to an aggregate 120,000 shares of Company Common Stock (including Company Options issued between the Balance Sheet Date and the Agreement Date) issued in the ordinary course of business and consistent with past practice (excluding any grants to the Principal Employees) in connection with hiring new employees or Company Subsidiary Securitiesemployment anniversary merit grants;
(cm) declareIssue, set aside grant, deliver or pay any dividend sell or distribution (whether in cashauthorize or propose the issuance, stockgrant, property delivery or otherwise) in respect sale of, or enter into any Contract with respect purchase or commit to the voting purchase of, any shares of its capital stock (other than dividends or distributions from its direct securities convertible into, or indirect wholly-owned Subsidiaries subscriptions, rights, warrants or options to the Company acquire, or other direct agreements or indirect wholly-owned Subsidiaries commitments of the Company);
(d) issue, sell, pledge, dispose of any character obligating it to issue any such shares or encumber any Company Securities or Company Subsidiary Securities, other than convertible securities; except for (i) securities issued in ------ connection with the issuance exercise of Company Options and the conversion of any Preferred Stock, and (ii) options granted for up to an aggregate 120,000 shares of Company Common Stock upon (including Company Options issued between the exercise Balance Sheet Date and the Agreement Date) issued in the ordinary course of business and consistent with past practice (excluding any grants to the Principal Employees) in connection with hiring new employees or employment anniversary merit grants;
(n) Cause or permit any amendments to its Articles of Incorporation or Bylaws;
(o) 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 its business;
(p) Sell, lease, license or otherwise dispose of any Company Stock Option of its properties or assets, except in the ordinary course of business and consistent with past practices;
(q) Grant any loans to others or purchase debt securities of others or amend the terms of any outstanding under Company Stock Plans as loan agreement, except in the ordinary course of business and consistent with past practices;
(r) Except in connection with the date of this Agreement in accordance with its termsXxxxx Action, grant any severance or termination pay (i) to any director or officer, or (ii) in accordance with to any other employee except payments made pursuant to standard written agreements outstanding on the Stockholder Rights Agreement------ date hereof;
(es) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (ii) enter into any new Adopt or amend in any material respect, employee benefit plan or pay or agree to pay any existing employment, severance, retention special bonus or change in control agreement with special remuneration to any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 as the result of the termination or resignation of any officer director or employee, or (iv) establish, adopt, enter into, amend, terminate, exercise any discretion under, increase the salaries or take any action to accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any wage rates of its wholly-owned Subsidiaries, (x) trade payables arising employees; except in the ordinary ------ course of business, consistent with past practice and in a manner which will not give rise to variable price accounting;
(yt) advances to employees for expenses reimbursable under Revalue any of its assets, including without limitation writing down the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances value of inventory or writing off notes or accounts receivable other than in the ordinary course of business;
(hu) transferExcept in connection with the Xxxxx Action, licensepay, selldischarge or satisfy, lease in an amount in excess of $25,000 (in any one case) or otherwise dispose of $50,000 (in the aggregate), any assets claim, liability or obligation (whether by way of mergerabsolute, consolidationaccrued, sale of stock asserted or assetsunasserted, contingent or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, other than in the case of obsolete equipment payment, discharge or assets being replaced, in each case satisfaction in the ordinary course of business of liabilities reflected or reserved against in the Financial Statements (or the notes thereto) or incurred in the ordinary course of business and consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among practice subsequent to the Company and/or one or more date of its wholly-owned Subsidiariesthe Financial Statements;
(iv) Make or change any material election in respect of Taxes, adopt or effect a plan change any accounting method in respect of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 PersonTaxes, 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessmentassessment in respect of Taxes, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations limitation period applicable to any material claim or assessment, assessment in each case, with respect to of Taxes;
(pw) fail to maintain in full force and effect material insurance policies covering the Company Enter into any strategic alliance or its Subsidiaries and its joint marketing arrangement or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, agreement; except for arrangements or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers agreements in the ordinary course of ------ business consistent with past practice (it being understood that, which provide for the purposes payment of this subsectioncommissions or finder's fees;
(x) Hire any new employee, “consistent terminate the employment of any existing employee, add any new consultant or contractor (or group of such consultants or contractors) with past practice” shall not include entering into annual compensation in excess of $100,000, terminate the relationship with any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that areexisting consultant or contractor, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or fail to take any of its Subsidiaries in the ordinary course of business)aforementioned actions if requested by Parent; or
(sy) Take, or agree in writing or commit otherwise to do take, any of the foregoing. Nothing contained actions described in this Agreement shall give ParentSections 4.1(a) through (y) above, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, any other action that would prevent the Company shall exercise, consistent with from performing or cause the terms and conditions of this Agreement, complete control and supervision over Company not to perform its and its Subsidiaries’ operationscovenants hereunder.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement until the earlier of the termination of this Agreement or the Effective Time, except (i) as expressly contemplated by this Agreement or as may be required by applicable Law or Law, (ii) with the prior written consent of Parent, conduct its business not to be unreasonably withheld, conditioned or delayed, (iii) as required by this Agreement or (iv) as set forth in Section 5.1 of the ordinary course of business, and, to the extent consistent therewithCompany Disclosure Schedule, the Company shall, and shall cause each of its Subsidiaries to, use conduct its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company);
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (ii) enter into any new or amend in any all material respect, any existing employment, severance, retention or change in control agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case respects in the ordinary course of business consistent with past practice, and to use commercially reasonable efforts to (A) maintain and preserve intact its business organization, (B) keep available the services of key employees and (C) maintain satisfactory relationships with customers, suppliers and distributors having material relationships with the Company or any of its Subsidiaries. Without limiting the foregoing, during the period from the date hereof until the earlier of the termination of this Agreement or the Effective Time, except (i) as may be required by applicable Law, (ii) with the prior written consent of Parent, not to be unreasonably withheld, conditioned or delayed, (iii) as required by this Agreement or (iv) as set forth in each case excluding Section 5.1 of the Company Disclosure Schedule, the Company shall not, and shall cause its Subsidiaries not to:
(a) amend the Company Organizational Documents or the Company Subsidiary Organizational Documents, or otherwise take any transferaction to exempt any person from any provision of the Company Organizational Documents or the Company Subsidiary Organizational Documents;
(b) split, licensecombine, salesubdivide, lease amend the terms of or reclassify any of its capital stock;
(c) make, declare or pay any dividend, or make any other disposition 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 (A) dividends paid by any of the wholly owned Subsidiaries of the Company to the Company or to any of their wholly owned Subsidiaries, respectively or (B) the acceptance, surrender or withholding of shares of Company Common Stock as payment for the exercise price of Company Stock Options or for withholding Taxes incurred in connection with any transaction between or among the exercise of Company Stock Options, in each case, in accordance with past practice and the terms of the Company and/or one Equity Plans or more of its wholly-owned Subsidiariesagreements evidencing Company Stock Options thereunder;
(id) (A) issue, sell, grant 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, including any Company Stock Options, except as permitted pursuant to the exercise of any purchase rights under the Company ESPP in accordance with the terms of Section 2.4, the exercise of Company Stock Options in accordance with their terms or pursuant to the grant of Company Stock Options in accordance with Section 5.1(d) of the Company Disclosure Schedule, or (B) enter into any agreement, understanding or arrangement with respect to the sale or voting of its capital stock or other equity interests;
(e) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other similar form of reorganization, other than transactions between the Company and any direct or indirect wholly owned Company Subsidiary or between direct or indirect wholly owned Company Subsidiaries;
(jf) incur (A) incur, assume, endorse, guarantee or otherwise become liable for any indebtedness for borrowed money Indebtedness (other than Indebtedness described in clause (F) of the definition of Indebtedness that is incurred in the ordinary course of business) or guarantee any such indebtedness of another Person, issue or sell any debt securities or calls, options, warrants, calls warrants or other rights to acquire any debt securities of (directly, contingently or otherwise), except for any Indebtedness for borrowed money owed solely among the Company and/or its wholly owned Subsidiaries and other than (1) borrowings in an aggregate amount not to exceed $750,000 incurred in the ordinary course of business pursuant to existing credit facilities, and (2) purchase money financings and capital leases entered into in the ordinary course of business in an aggregate amount not to exceed $250,000 at any time outstanding; or (B) incur any Lien relating to Indebtedness on any of its Subsidiariesmaterial property or assets, guarantee except for Permitted Liens securing Indebtedness expressly permitted by the foregoing clause (A)(2), provided that in the case of (A)(2) such Lien shall extend only to the property the purchase or lease of which is financed thereby;
(g) make any debt securities of another Person, enter into any “keep well” loans or other Contract advances to maintain any financial statement condition of any other Person person, except for (A) loans or advances for indemnification, attorneys’ fees, travel and other than any wholly-owned Subsidiary of it) or enter into any arrangement having business expenses in the economic effect of any of the foregoing, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables of business consistent with past practice or pursuant to an existing financing facility(B) extended payment terms for customers in the ordinary course of business;
(A) sell, except for intercompany loans entered into in between transfer, mortgage, license, encumber or among the Company and/or otherwise dispose of any of its whollyIntellectual Property rights, material properties or assets to any person other than (1) to the Company or a wholly owned Subsidiary of the Company, (2) sales of products, services, inventory or obsolete equipment in the ordinary course of business or pursuant to written contracts or commitments existing as of the date of this Agreement, and (3) non-exclusive licenses granted in connection with the sale of products and services to customers in the ordinary course of business, or (B) cancel, release or assign any Indebtedness of any person owed to it or any claims held by it against any person other than the release of claims held by it in the ordinary course of business or in an amount not to exceed $100,000;
(i) (A) acquire (whether by merger or consolidation, acquisition of stock or assets or by formation of a joint venture or otherwise) any other person or business or any assets, deposits or properties of any other person, or (B) make any investment in any other person either by purchase of stock or securities, contributions to capital, or property transfers except in each case of the foregoing (A) or (B) for (1) acquisitions from wholly owned Company Subsidiaries, (2) investments in equity and debt instruments that constitute cash or cash equivalents consistent with the Company’s past cash management programs, (3) the purchase of equipment, supplies and inventory in the ordinary course of business and (4) inbound paid-up licenses of Intellectual Property in the ordinary course of business;
(j) make any commitments with respect to capital expenditures in excess of an aggregate amount equal to $2,000,000 (regardless of when the amounts would be paid) during any fiscal quarter;
(k) institute anyother than in the ordinary course of business consistent with past practice (except with respect to any Company Material Contract of the type (or that would be of the type) described in Section 3.19(a)(iii) or Section 3.19(a)(iv) (in each case disregarding the exclusion of Contracts with sales representatives or distributors)), terminate (other than upon the expiration of its term), materially amend, or settle waive, release or compromise assign any pending material right under, any Company Material Contract or threatened, Legal Actions involving injunctive relief or enter into any contract that would constitute a Company Material Contract if it were in effect on the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than any Legal Action brought against Parent or Merger Sub arising out of a breach or alleged breach date of this Agreement by Parent or Merger Sub; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofAgreement;
(l) make any material change in any method of financial accounting principles or practices, except for any change as required by a the terms of any Company Benefit Plan as in effect on the date of this Agreement, (A) increase the cash compensation or benefits payable or to become payable to any of its directors, officers, employees or individual independent contractors, (B) grant to any of its directors, officers, employees or individual independent contractors any new, or increase in, severance or termination pay, (C) pay or award, or commit to pay or award, any bonuses or incentive compensation to any of its officers or employees, (D) enter into any employment, service, severance, change in GAAP of control or applicable Lawretention agreement (excluding offer letters or other agreements that do not provide for severance, termination, retention or change of control benefits) with any of its directors, officers, employees or individual independent contractors, (E) establish, adopt, enter into, amend or terminate any Collective Bargaining Agreement or Company Benefit Plan, other than amendments to Company Benefit Plans that are health and welfare plans that do not materially increase the aggregate annual cost to the Company of maintaining such plans, (F) accelerate the vesting or payment of, or fund, any compensation or benefit under any Company Benefit Plan, (G) hire or terminate the employment or service of any employee or individual independent contractor whose total annual cash compensation exceeds $300,000, other than for cause, or (H) hire or engage any employee or individual independent contractor whose total annual cash compensation exceeds $300,000;
(m) enter into implement or adopt any material agreementchange in its financial accounting principles, agreement practices or methods, other than as may be required by changes in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or allianceGAAP;
(n) authorizecommence, settle or make compromise any commitment litigation, suit, action or proceeding, except for commencements, settlements or compromises that (A) involve solely monetary remedies with a value not in excess of $250,000 with respect toto any individual litigation, suit, action or proceeding or $500,000 in the aggregate, (B) do not impose any capital expenditure, except as contemplated material restriction on the Company’s business or the business of any of the Company’s Subsidiaries and (C) do not relate to any litigation by the Company’s existing fiscal year 2012 Capital Budgetstockholders in connection with this Agreement or the Mergers;
(o) make, change or revoke any material Tax election, change or adopt any Tax accounting period or change any material method of Tax accounting, file amend any material amended Tax Return, enter into any material “closing agreement” within the meaning of Section 7121(a) of the Code (or any similar provision of state, local or foreign Law) or other material agreement with any taxing authority with respect to any material Tax, request any Tax ruling from any Governmental Entity, settle or compromise any material claim Tax liability or assessmentany audit, examination or other proceeding relating to a material amount of Taxes, or surrender any right to claim for a material refundrefund of Taxes, offset enter into any material Tax sharing, allocation, indemnity or similar agreement or arrangement (other reduction than customary provisions in Liability or consent commercial arrangements entered into in the ordinary course of its business and the primary purpose of which is not related to any Taxes) or, except in the ordinary course of business, agree to an extension or waiver of the statute of limitations period applicable to any material claim or assessment, in each case, with respect to a material amount of Taxes;
(p) materially reduce the amount of insurance coverage or fail to maintain in full force and effect renew any material existing insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practicepolicies;
(qi) adopt, modify from the form existing on the date hereofamend any Company Permits in a manner that adversely impacts its ability to conduct its business in any material respect, or implement a rights plan(ii) terminate or allow to lapse, “poison pill” or similar arrangement, except as contemplated by this Agreementany Company Permits that are material to its ability to conduct its business;
(ri) enter intocancel, terminateor fail to reasonably apply for, modify continue to prosecute or waive maintain, or permit to lapse, or fail to comply with any material right underobligation with respect to, any Material Contract or Permitmaterial Company Registrations, other than Contracts entered into (ii) fail to comply with customers in the ordinary course of business consistent any material obligation with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into respect to any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by agreements pursuant to which the Company or any Company Subsidiary licenses or obtains the right to use any material Company Licensed Intellectual Property, or (iii) disclose to any third party any material Trade Secret of its Subsidiaries the Company or any Company Subsidiary in a way that results in loss of trade secret protection or confidentiality;
(s) enter into any Contract under which the ordinary course Company or any Subsidiary of business)the Company agrees to pay any royalties or any other monetary obligation with respect to any material Intellectual Property; or
(st) agree to take, or commit make any commitment to do take, any of the foregoing. Nothing contained in foregoing actions that are prohibited pursuant to this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsSection 5.1.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries toExcept as expressly permitted or required by this Agreement, during the period from commencing on the date hereof and ending on the earlier of (i) the Closing Date and (ii) the date on which this Agreement until is terminated in accordance with its terms:
(a) The Seller shall cause the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, Company to conduct its business operations in all material respects only in the ordinary course Ordinary Course of business, Business and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, to use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ respective business organizationorganizations, to keep available the services of its current senior management as a group and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present maintain satisfactory relationships with customers, suppliers, distributors, licensors, licensees and other Persons any Person having significant business relationships with it. Without limiting the generality Company.
(b) The Seller shall cause the Company to not effect any of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, following without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):the Purchaser:
(ai) amend make any change in or propose amendment to amend its certificate of incorporation organizational documents or its by-laws (or other comparable organizational governing documents)) in a manner that would reasonably be expected to materially delay or impede the ability of the Company to consummate the transactions contemplated hereby;
(bii) split, combine issue or reclassify, repurchase, redeem or otherwise acquiresell, or offer authorize to repurchase, redeem issue or otherwise acquiresell, any Company Securities shares of its capital stock or Company Subsidiary Securities;
(c) declareany other ownership interests, set aside or pay issue or sell, or authorize to issue or sell, any dividend securities convertible into or distribution (whether in cashexchangeable for, stockor options, property warrants or otherwise) in respect ofrights to purchase or subscribe for, or enter into any Contract arrangement or contract with respect to the voting issuance or sale of, any shares of its capital stock (or any other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company)ownership interests;
(diii) issuesplit, sellcombine, pledgeredeem or reclassify, dispose of purchase or encumber otherwise acquire, or declare, pay or set aside any Company Securities dividend or Company Subsidiary Securitiesmake any distribution with respect to, other than (i) the issuance of any shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, capital stock or (ii) in accordance with the Stockholder Rights Agreementits other securities;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidationinvestment in, acquisition of stock or assetsof, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in to, any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, Person other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale;
(v) sell, lease or other disposition in connection with otherwise dispose of any transaction between or among the Company and/or one or more of its wholly-owned Subsidiariesproperties or assets, except in the Ordinary Course of Business;
(ivi) adopt amend, supplement, modify, terminate or effect waive any material rights under any material contract or enter into a plan contract which, had it been entered into prior to the date hereof, would have been a material contract, except in the Ordinary Course of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationBusiness;
(jvii) incur any indebtedness for borrowed money or guarantee make any such indebtedness of another Person, issue loan or sell any debt securities or options, warrants, calls or other rights advance 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, or incur any Liens other than Permitted Liens in connection with the foregoingPerson, other than the financing of ordinary course trade payables consistent with past practice or pursuant routine advances to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount employees consistent with past practice;
(qviii) adoptgrant or agree to grant to any officer or employee of the Company any increase in wages or bonus, modify from severance, profit sharing, retirement, deferred compensation, insurance or other compensation or benefits, establish any new compensation or benefit plans or arrangements or amend or agree to amend any existing Plan, except (A) as may be required under applicable Law, (B) as specifically required by the form existing provisions of any Plan in effect on the date hereof, hereof or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement(C) in the Ordinary Course of Business consistent with past practices in respect of employees;
(rix) enter intodelay or defer the payment of any accounts payable;
(x) make or authorize capital expenditures other than capital expenditures consistent with the Company’s operating plan and not in excess of $10,000 in the aggregate;
(xi) pay, terminate, modify discharge or waive satisfy any material right under, any Material Contract or Permitliabilities, other than Contracts entered into with customers in the ordinary course Ordinary Course of business consistent with past practice (it being understood that, for the purposes of this subsection, “Business consistent with past practice” shall not include entering into ;
(xii) grant any Contract having terms and conditions license with respect to Company Intellectual Property;
(including terms and conditions regarding pricing and Liabilitiesxiii) take any action or omit to take any action that arewould reasonably be expected to cause any Company Intellectual Property to become invalidated, in abandoned or dedicated to the aggregate, substantially inconsistent public domain;
(xiv) accelerate or change its policy with respect to the terms and conditions found in other Contracts collection of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business)accounts receivable; or
(sxv) agree authorize any of, or commit or agree to do take any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectlyof, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsforegoing actions.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from From the date hereof until the earlier of the Closing or the termination of this Agreement until the Effective Timepursuant to Article XII, except as expressly contemplated by in this Agreement or as required expressly consented to in writing by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewithBuyer, the Company shall, and shall cause each of its Subsidiaries to, conduct its business and operations in the ordinary course of business consistent with past practice and use its commercially reasonable best efforts to (i) preserve substantially intact its and its Subsidiaries’ present business organization, to (ii) maintain in effect all material Licenses, (iii) keep available the services of its and its Subsidiaries’ current members, officers and key employees, to preserve its and its Subsidiaries’ present (iv) maintain good relationships with customersits Advisory Clients, suppliers, distributors, licensors, licensees vendors and other Persons others having material business relationships with itit and (v) manage its working capital (including the timing of collection of accounts receivable and of the payment of accounts payable) in the ordinary course of business consistent with past practice. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 Schedule 8.1, or in order to comply with the express terms and obligations of this Agreement, the Sellers and Sosnoff shall cause the Company Disclosure Letter or as required by applicable Lawand its Subsidiaries not to, and the Company shall not, nor not and shall it not permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed)::
(a) amend or propose except to effect the Recapitalization, amend its certificate of incorporation Organizational Documents (whether by merger, consolidation or by-laws (or other comparable organizational documentsotherwise);
(b) except to effect the Recapitalization, split, combine or reclassifyreclassify any equity interests or other securities of the Company or any of its Subsidiaries (whether by merger, consolidation or otherwise);
(c) other than tax distributions and monthly profits distributions in the ordinary course of business consistent with historical past practice and the distribution of excess cash in amounts not to exceed the amount required to avoid a shortfall in the Company’s Net Working Capital at Closing, make any distribution in respect of or directly or indirectly repurchase, redeem or otherwise acquire, acquire any equity interests or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares other securities of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or any of its Subsidiaries or any securities convertible into or exercisable or exchangeable for any ownership interests or other direct or indirect wholly-owned Subsidiaries security of the CompanyCompany or any of its Subsidiaries (whether by merger, consolidation or otherwise);
(d) except to effect the Recapitalization, issue, selldeliver or sell any equity interests or other securities of the Company or any of its Subsidiaries (whether by merger, pledge, dispose of consolidation or encumber any Company Securities or Company Subsidiary Securitiesotherwise), other than (i) the issuance of shares of Company Common Stock upon the exercise any equity interests or other securities of any Company Stock Option outstanding under Company Stock Plans as wholly owned Subsidiary of the date Company to the Company or any other wholly owned Subsidiary of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights AgreementCompany;
(e) except as required to effect the Recapitalization, amend any term of any equity interests or other securities of the Company or any of its Subsidiaries (whether by applicable Law merger, consolidation or pursuant to Section 3.03otherwise);
(f) incur any capital expenditures or any Liabilities in respect thereof, other than any capital expenditures that do not exceed $25,000 individually or $50,000 in the aggregate;
(ig) increase acquire (by merger, consolidation or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than supplies in the compensation ordinary course of directorsbusiness consistent with past practice;
(h) sell, officers lease or employees otherwise transfer, or create or incur any Lien on, any assets, securities, properties or interests of the Company or any of its Subsidiaries, (ii) enter into any new or amend other than in any material respect, any existing employment, severance, retention or change in control agreement the ordinary course of business consistent with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Planpractice;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(gi) acquire, sell, lease, license, transfer, pledge, encumber, grant or dispose of (whether by merger, consolidation, acquisition of stock purchase, sale or assetsotherwise) any Company Intellectual Property, or otherwiseenter 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 Person do any act or division thereof knowingly omit to do any act whereby any material Company Intellectual Property may become invalidated, abandoned, unmaintained, unenforceable or dedicated to the public domain;
(j) other than in connection with actions permitted by Section 8.1(f) or 8.1(g), make any loans, advances or capital contributions to to, or investments in in, any other Person;
(k) create, except for (w) intercompany loansincur, advances assume, suffer to exist or capital contributions entered into in between or among otherwise be liable with respect to any Indebtedness, other than the Company and/or any incurrence of its wholly-owned Subsidiaries, (x) trade payables arising indebtedness in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessconsistent with past practice;
(hl) transferadopt, licenseestablish, sellenter into, lease amend or terminate, or increase the benefits under, any Company Plan, or other employee benefit, plan, practice, program, policy or Contract that would be a Company Plan if in effect on the date hereof, in any case other than as may be required by the terms of such Company Plan or other plan, practice, program, policy or Contract as may be required by applicable Law or in order to qualify under Sections 401 and 501 of the Code or Section 409A of the Code;
(m) increase compensation or fringe benefits of any current or former member, officer, employee or consultant of the Company or any of its Subsidiaries;
(n) 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;
(o) make any change with respect to its senior administrative, marketing, portfolio management and supervisory personnel, or hire or terminate any such Person;
(p) extend credit or renew or forgive a previously existing extension of credit (either directly or indirectly) for the benefit of any Covered Person;
(q) enter into any Contract that limits or otherwise dispose of restricts in any assets (whether by way of mergermaterial respect the Company, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company or any of their respective Affiliates or any successor thereto or that would reasonably be expected, after the Closing, to limit or restrict in any material respect the Company, any of its Subsidiaries, the Buyer or any of their respective Affiliates, from engaging or competing in any line of business, in any location or with any Person;
(r) enter into, amend or modify in any material respect or terminate any Material Contract (other than in the case of obsolete equipment an Advisory Contract) or assets being replacedIP License, in each case other than in the ordinary course of business consistent with past practice, in each case excluding or otherwise waive, release or assign any transfermaterial rights, license, sale, lease claims or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 benefits thereto 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(ks) institute anychange any methods of accounting, except as required by changes in GAAP as agreed to by its independent public accountants;
(t) settle (i) any material Action involving or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by against the Company or any of its Subsidiaries of or (ii) any amount exceeding $25,000 individually or $100,000 in Action that relates to the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofContemplated Transactions;
(lu) make amend, modify or waive any rights under, in any material change respect, any Advisory Contract (including by entering into or amending any side letter relating thereto) other than (i) a reduction in the fee payable thereunder which is reflected in the applicable Advisory Contract Value and (ii) amendments, modifications and waivers in the ordinary course of business that are not adverse to the Company in any method material respect (it being understood that, without limitation, the addition of financial accounting principles or practices, except for any change required by a change changes to “most-favored nation” clauses and changes in GAAP or applicable Lawthe 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);
(mv) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by accelerate the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset billing or other reduction in Liability or consent realizations of advisory fees payable to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from delay the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in payment of Liabilities beyond the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(sw) agree agree, commit or commit offer to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Evercore Partners Inc.)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from From the date of this Agreement until the Effective TimeTime (or the earlier termination of this Agreement in accordance with its terms), except as expressly contemplated by this Agreement or as required by applicable Law or with as expressly required by this Agreement or as set forth in Section 5.01 of the prior written Company Disclosure Schedule or unless Parent shall otherwise consent of Parentin writing (such consent not to be unreasonably withheld, conduct its business in the ordinary course of business, and, to the extent consistent therewithconditioned or delayed), the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company);
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with conduct its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, and (ii) use its reasonable best efforts to maintain its assets and properties and preserve intact and maintain its business organization and goodwill of those having business relationships with any of it and to keep available the services of its present officers and employees on terms and conditions substantially comparable to those currently in each case excluding effect. In addition to and without limiting the generality of the foregoing, from the date hereof until the Effective Time (or the earlier termination of this Agreement in accordance with its terms), except as required by applicable Law or as expressly required by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule, without the prior written consent of Parent (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit any transferof its Subsidiaries to:
(a) adopt or propose any change in, licenseor amendment of, sale, lease its certificate of incorporation or by-laws or other disposition comparable organizational documents;
(b) (i) declare, set aside, make or pay any dividend or other distribution (whether in connection with cash, stock or property) in respect of any transaction between or among the Company and/or one or more of its capital stock (other than dividends or distributions declared, set aside, made or paid by any wholly-owned Subsidiaries;
Subsidiary to the Company or to another wholly-owned Subsidiary), (iii) adopt split, combine, subdivide or effect a plan reclassify any of complete its capital stock, or partial liquidation(iii) repurchase, dissolution, restructuring, recapitalization redeem or otherwise acquire any shares of the capital stock or other reorganization;
(j) 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 SubsidiariesSubsidiaries (including any options, guarantee warrants or any debt securities security exercisable for or convertible into such capital stock or securities), other than, in the cases of another Personthe foregoing clauses (i) and (iii), enter into any “keep well” distributions, repurchases, redemptions 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 acquisitions by any of the foregoing, Company’s Subsidiaries as may be necessary or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant appropriate to an existing financing facility, except for intercompany loans entered into in between or among enable the Company and/or any of its wholly-owned Subsidiariesto pay the Merger Consideration;
(kc) institute anyissue, sell, grant, pledge or settle otherwise encumber any shares of the capital stock or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment other securities of monetary damages by the Company or any of its Subsidiaries (including any options, warrants or any security exercisable for or convertible into such capital stock or securities);
(d) merge or consolidate with any other Person or acquire any assets or capital stock of any amount exceeding $25,000 individually other Person;
(e) sell, lease, license, subject to a Lien, or $100,000 in the aggregateotherwise surrender, relinquish or dispose of any materials assets, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business (i) as set forth in Section 5.01(e) of the Company Disclosure Schedule or any Affiliate thereof;
(lii) make any material change in any method the ordinary course of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount business consistent with past practice;
(qf) adopt(i) make any loans, modify from the form existing on the date hereofadvances or capital contributions to, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right underinvestments in, any Material Contract Person other than investments in the ordinary course of business consistent with past practice, (ii) create, incur, guarantee or Permitassume any indebtedness for borrowed money, issuances of debt securities, guarantees, loans or advances, other than Contracts entered into in ordinary course of business consistent with customers past practice, or (iii) make or commit to make any capital expenditure other than in the ordinary course of business consistent with past practice and as contemplated by the Company’s capital expenditure budget;
(it being understood thatg) (i) amend or otherwise modify benefits under any “employee benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, for as amended), or any other equity incentive, compensation, severance, employment, change in control, retention, fringe benefit, collective bargaining, bonus, incentive, savings, retirement, deferred compensation or other benefit plan, agreement, program, policy or arrangement (“Company Plan”), (ii) accelerate the purposes payment or vesting of this subsectionbenefits or amounts payable or to become payable under any Company Plan or (iii) terminate or establish any Company Plan, “in each case, other than in the ordinary course of business consistent with past practice” shall not include entering ;
(h) enter into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that arenew employment agreements with, in or increase the aggregatecompensation of, substantially inconsistent with the terms and conditions found in any officer or director, or, other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries than in the ordinary course of business, any employee, consultant, representative or agent of the Company or any Subsidiary (including entering into any bonus, severance, change of control, termination, reduction-in-force or consulting agreement or other employee benefits arrangement or agreement pursuant to which such Person has the right to any form of compensation from the Company or such Subsidiary), other than as required by written agreements in effect on or prior to the date of this Agreement with such Person, or otherwise amend in any material respect any existing agreements with any such Person;
(i) settle or compromise any material Proceeding, except as permitted under Section 5.08 of this Agreement;
(j) enter into, renew, extend, amend or terminate any material Contract, other than in the ordinary course of business consistent with past practice; or
(sk) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Conduct of Business of the Company. The Company shallFrom the date hereof through the Closing Date, and shall cause except to the extent consented to in writing by the other party, each of its Subsidiaries to, during Parent and the period from the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct Company agrees:
(a) To operate its business in a reasonable and prudent manner, to conduct its operations according to the ordinary and usual course of business, andits business consistent with past practice, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its present business organization and its Subsidiaries’ business organizationstructure, to keep available the services of its present officers, agents and its Subsidiaries’ current officers and full-time employees, to use its best efforts to preserve and maintain its Assets and the goodwill of its business and to use its best efforts to preserve its and its Subsidiaries’ present relationships with customers, suppliersclients, distributorsindependent contractors, licensors, licensees employees and other Persons having business relationships dealings with it. Without limiting it or material to the generality operation of its business and in the case of the foregoingCompany, between to notify Parent if the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 aggregate number of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) amend or propose to amend its certificate of incorporation or byCompany's full-laws (or other comparable organizational documents);time employees exceeds 800 Persons.
(b) splitTo maintain in the ordinary course of its business, combine or reclassifyconsistent with past practice and in accordance with all Contracts, repurchaseall its material Assets, redeem or otherwise acquireequipment and other tangible property in their present repair, or offer order and condition, subject to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securitiesordinary wear and tear;
(c) declareTo maintain the books and records relating to its business in the usual and ordinary manner and in a manner that fairly and correctly reflects its income, set aside or pay any dividend or distribution (whether expenses, Assets and Liabilities consistent with GAAP, and to record and effect services rendered in cash, stock, property or otherwise) in respect of, or enter into any Contract the usual and ordinary manner consistent with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company)past practices;
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement To pay all account and trade payables in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreementpast practices;
(e) except as required by applicable Law Not to incur any Liability or pursuant to Section 3.03, Debt (i) increase other than Liabilities and Debt incurred in the compensation of directors, officers or employees of the Company or any ordinary course of its Subsidiariesbusiness, (ii) enter into any new or amend consistent with past practice, which are not in any the aggregate material respect, any existing employment, severance, retention or change in control agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Planthereto);
(f) hire Not to undertake (nor permit to be undertaken) any officer of the actions specified in Section 4.8 or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;Section 5.8 hereof. ----------- -----------
(g) acquireNot to pay, by mergerdischarge or satisfy any Claim or Liability in excess of $10,000, consolidationother than the payment, acquisition discharge or satisfaction in the ordinary course of stock its business of Claims or assetsLiabilities incurred in the ordinary course of its business, consistent with past practice;
(h) Not to sell, transfer, convey, assign or otherwise dispose of any Assets, except in the ordinary course of its business consistent with past practices, or otherwisecreate, incur or assume any business Lien on any Assets;
(i) Not to waive, release or Person cancel any material Claims against third parties or division thereof Debts owing to it or make any loans, advances or capital contributions to or investments in material rights which have any Person, except for value (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising other than actions taken in the ordinary course of business, (yconsistent with past practices) advances to employees for expenses reimbursable under or make any Tax election or settle or compromise any federal, state, local or foreign income Tax liability, or waive or extend the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances statute of limitations in the ordinary course respect of businessany such Taxes;
(hj) transferNot to amend, licensealter or modify its certificate of incorporation or articles of incorporation, as the case may be, and not to split, combine or reclassify the outstanding capital stock of, or authorize for issuance, issue, sell, lease deliver or otherwise dispose of any assets agree or commit to issue, sell or deliver (whether by way through the issuance or granting of mergeroptions, consolidationwarrants, sale of stock convertible or assetsexchangeable securities, commitments, subscriptions, rights to purchase or otherwise), including the ) any shares of its capital stock or any other securities in respect of, in lieu of or in substitution for shares of capital stock of, or other ownership interests, or amend any of the terms of any such securities, except that the following restriction on issue, sale or delivery of securities shall not apply to Parent or the Company with respect to (I) outstanding options or warrants; (II) grant of options or warrants for the purchase of up to 25,000 shares of Common Stock and (III) securities to be issued in the Financing (as defined in Section 6.7 ----------- hereof).
(k) Not to declare, set aside, distribute or pay of any cash dividend or other distribution of cash or property with respect to any equity interests in any Subsidiary of the Company, other than in the case of obsolete equipment or assets being replaced, in each case otherwise to its stockholders.
(l) Except in the ordinary course of business and consistent with past practicepractices, in each case excluding any transfernot to terminate, licensemodify, sale, lease amend or other disposition in connection with any transaction between otherwise alter or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 change any of the foregoing, terms or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries provisions of any Contract or breach the terms of any Contract or pay any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change not required by a change in GAAP Law or applicable Law;by any Contract; or
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers Except in the ordinary course of business and consistent with past practice (it being understood thatpractices, for not to increase the purposes of this subsectioncompensation payable or to become payable to any officer, “consistent with past practice” shall not include entering into Stockholders, director, consultant, agent, sales representative or employee, or any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, alteration in the aggregatebenefits payable to any thereof, substantially inconsistent with the terms and conditions found in other Contracts or to pay any bonuses or compensation to any such employee or officer of similar size and scope previously entered into by the Company or any other than in respect of its Subsidiaries salaries in effect on the ordinary course of business); or
(s) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsdate hereof.
Appears in 1 contract
Samples: Merger Agreement (Paladyne Corp)
Conduct of Business of the Company. (1) The Company shall, covenants and shall cause each of its Subsidiaries toagrees that, during the period from the date of this Agreement until the earlier of the Effective Time, except as expressly contemplated by Time and the time that this Agreement or as required by applicable Law or is terminated in accordance with its terms, except: (a) with the prior written consent of Parentthe Purchaser, conduct its business such consent not to be unreasonably withheld, delayed or conditioned; (b) as required or permitted by this Agreement; (c) as required by Law or to comply with any Order or request from a Governmental Entity; (d) as permitted by Section 4.13; or (e) as disclosed in the ordinary course of business, and, to the extent consistent therewithCompany Disclosure Letter, the Company shall, and shall cause each of its Subsidiaries toto conduct its business in the Ordinary Course, in accordance with Laws, and to use its commercially reasonable efforts to maintain and preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and assets, properties, employees, to preserve its goodwill and its Subsidiaries’ present business relationships with customers, suppliers, distributorspartners, licensorsjoint venture partners, licensees Aboriginal Groups, Governmental Entities, sureties and other Persons having with which the Company or any of its Subsidiaries has business relationships relations and to perform and comply in all material respects with it. all of its obligations under the Material Contracts.
(2) Without limiting the generality of Section 4.1(1), the foregoingCompany covenants and agrees that, between during the period from the date of this Agreement until the earlier of the Effective Time and the Effective Timetime that this Agreement is terminated in accordance with its terms, except except: (a) with the prior written consent of the Purchaser, such consent not to be unreasonably withheld, delayed or conditioned; (b) as otherwise expressly contemplated required or permitted by this Agreement Agreement; (c) as required by Law or to comply with any Order or request from a Governmental Entity; (d) as set forth permitted by Section 4.13 or (e) as disclosed in Section 6.01 of the Company Disclosure Letter or as required by applicable LawLetter, the Company shall not, nor and shall it not permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed)::
(ai) amend or propose to amend its certificate articles of incorporation or incorporation, articles of amalgamation, by-laws (laws, partnership agreement or other comparable similar organizational documents);
(bii) split, combine or reclassify, or amend any term of, any outstanding securities of the Company or of any Subsidiary;
(iii) redeem, repurchase, redeem or otherwise acquire, acquire or offer to repurchaseredeem, redeem repurchase or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, acquire any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the Company);
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, except: (iiA) enter into for the acquisition of shares of capital stock of any new or amend in any material respect, any existing employment, severance, retention or change in control agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 as the result wholly-owned Subsidiary of the termination Company by the Company or resignation by any other wholly-owned Subsidiary of any officer the Company; or employee, (B) to settle awards outstanding on the date of this Agreement under the RSU Plan or PSU Plan in accordance with the terms of such plans;
(iv) establishissue, adoptgrant, enter into, amend, terminate, exercise any discretion underdeliver or sell, or take authorize the issuance, grant, delivery or sale of, any action to accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for shares in the replacement capital of any current employee whose employment with the Company or any of its Subsidiaries, any DSUs, RSUs or PSUs or any options, warrants or similar rights exercisable or exchangeable for or convertible into such shares in the capital of the Company or any of its Subsidiaries, except for: (A) the issuance of Shares issuable upon the exercise of any outstanding Company Options or the vesting of any outstanding RSUs or the issuance of dividend equivalents under the DSU Plan, RSU Plan or PSU Plan in each case which are issued and outstanding on the date of this Agreement, or (B) the issuance of any shares in the capital of any Subsidiary thereof is terminated of the Company to the Company or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000a wholly-owned Subsidiary of the Company;
(gv) acquire, take up and pay for any Shares under the Company’s normal course issuer bid;
(vi) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, in one transaction or in a series of related transactions, any assets, securities, properties, interests or otherwisebusinesses (i) having a cost (inclusive of assumed liabilities), on a per transaction or series of related transactions basis, in excess of $7,500,000 and subject to a maximum of $15,000,000 for all such transactions, other than for greater certainty Ordinary Course procurement contracts or (ii) if such acquisition would reasonably be expected to impede, prevent or delay the consummation of the transactions contemplated by this Agreement, other than, in each case, any business such acquisitions by DDMI as manager of the Diavik Joint Venture;
(vii) sell, lease, pledge or Person otherwise transfer or division thereof encumber, or make grant any loansLiens with respect to, advances directly or capital contributions to indirectly, in one transaction or investments in a series of related transactions, any Personof the Joint Venture Interests or any of the Company’s or its Subsidiaries other assets which have a value greater than $10,000,000 in the aggregate, except for other than (wi) intercompany loansthe sale, advances lease or capital contributions entered into other transfer of inventories in the Ordinary Course, (ii) Permitted Liens, (iii) in compliance with Section 4.13 of this Agreement, (iv) as a result of an action by DDMI as manager of the Diavik Joint Venture or (v) as between any Subsidiary of the Company and the Company or any other wholly-owned Subsidiary of the Company;
(viii) reorganize, amalgamate or merge the Company or any Subsidiary of the Company other than a reorganization, amalgamation or merger solely between or among the Company and/or any of and its wholly-owned Subsidiaries, (x) trade payables arising in Subsidiaries or between or among wholly-owned Subsidiaries of the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessCompany;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(iix) adopt or effect a plan of complete liquidation or partial liquidation, dissolution, restructuring, recapitalization resolutions providing for the liquidation or other reorganization;
(j) 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 dissolution of the Company or any of its Subsidiaries;
(x) make any capital expenditures or commitment to do so, guarantee except (i) as set out in the Company Disclosure Letter or (ii) relating to the maintenance of its assets, such expenditures or commitments which individually, or in the aggregate, do not exceed $7,500,000;
(xi) make any debt securities of another Personmaterial Tax election, information schedule, return or designation, except, in each case, in the Ordinary Course, settle or compromise any material Tax claim, assessment, reassessment or liability, file any amended Tax Return, enter into any “keep well” material agreement with a Governmental Entity with respect to Taxes, surrender any right to claim a material Tax abatement, reduction, deduction, exemption, credit or refund, consent to the extension or waiver of the limitation period applicable to any material Tax matter or materially amend or change any of its methods of reporting income, deductions or accounting for income Tax purposes;
(xii) except in the Ordinary Course in connection with customary cash management activities and other Contract than pursuant to maintain the Plan of Arrangement, make, in one transaction or in a series of related transactions, any financial statement condition of loans, advances or capital contributions to, or investments in, any other Person (Person, other than the Company or any wholly-owned Subsidiary of itthe Company, in an amount on a per transaction or series of related transactions basis in excess of $3,500,000 individually and $15,000,000 in the aggregate;
(xiii) knowingly: (i) take any action, (ii) permit any inaction, or (iii) enter into any arrangement having the economic effect of any of the foregoingtransaction, or incur any Liens other than Permitted Liens in the Ordinary Course or in connection with a Contemplated Reorganization Transaction, that, in each case, could reasonably be expected to have the foregoing, other than effect of materially reducing or eliminating the financing amount of ordinary course trade payables consistent with past practice or the tax cost “bump” pursuant to an existing financing facility, except for intercompany loans entered into paragraphs 88(1)(c) and 88(1)(d) of the Tax Act in between or among respect of the Company and/or securities of any of its whollySubsidiaries and other non-depreciable capital property owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, upon an amalgamation or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course winding up of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries (or any of their respective successors);
(xiv) create, incur, assume or otherwise become liable, in one transaction or in a series of related transactions, with respect to any indebtedness for borrowed money or guarantees thereof in an amount, on a per transaction or series of related transactions basis, without duplication, in excess of $7,500,000 other than (A) indebtedness owing by one wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary of the Company or by the Company to a wholly-owned Subsidiary of the Company, (B) in connection with funding the capital requirements of a non-wholly-owned Subsidiary of the Company so long as such indebtedness is recourse solely to such non-wholly-owned Subsidiary, (C) the Debt Financing or (D) under the Existing Senior Secured Credit Agreement to fund immediate liquidity needs (other than for reclamation bonding) where cash resources are unavailable;
(xv) other than pursuant to the Plan of Arrangement or in the ordinary course Ordinary Course or between the Company and a wholly-owned Subsidiary of business)the Company or between wholly-owned Subsidiaries of the Company, assume, guarantee or otherwise become liable with respect to the liabilities or obligations of, any Person;
(xvi) enter into any interest rate, currency, equity or commodity swaps, xxxxxx, derivatives, forward sales contracts or similar financial instruments;
(xvii) make any material change in the Company’s accounting principles, except as required by concurrent changes in IFRS;
(xviii) except in the Ordinary Course, grant any general increase in the rate of wages, salaries and bonuses of Company Employees or make any bonus or profit sharing distributions or similar payments;
(xix) adopt any new Employee Plan or material amendment or modification of an existing Employee Plan;
(xx) enter into any new collective agreement or union agreement or amend, modify, terminate or waive any right under the Collective Agreements or agree to any such amendment, modification, termination or waiver of rights;
(xxi) (A) increase or grant any severance, change of control or termination pay to (or amend any existing Contract in this regard from that in effect on the date hereof with) any officer or director of the Company, any other Company Employee or any contractor or consultant of the Company and its Subsidiaries; (B) increase the benefits payable under any existing severance or termination pay policies with any officer or director of the Company, any other Company Employee or any contractor or consultant of the Company and its Subsidiaries; (C) enter into any employment, deferred compensation or other similar Contract (or amend any such existing Contract) with any director or officer of the Company; (D) increase the benefits payable under employment agreements with any director or officer of the Company; or (E) increase compensation, bonus levels or other benefits payable to any director or officer of the Company;
(xxii) commence, waive, release, assign, settle or compromise any claims, dissent rights, litigation, proceedings or governmental investigations in excess of an amount of $3,500,000 individually or $7,500,000 in the aggregate or which would reasonably be expected to (i) impede, prevent or delay the consummation of the transactions contemplated by this Agreement or (ii) have a material adverse impact on the operations of the Company and its Subsidiaries;
(xxiii) except in the Ordinary Course, amend or modify in any material respect or terminate or waive any material right under any Material Contract or enter into any contract or agreement that would be a Material Contract if in effect on the date hereof;
(xxiv) except as contemplated in Section 4.8, amend, modify, terminate, cancel or permit to lapse any material insurance policy of the Company or any Subsidiary in effect on the date of this Agreement, unless simultaneously with such termination, cancellation or lapse, the Company uses commercially reasonable efforts to put in place replacement policies underwritten by insurance companies of nationally recognized standing providing coverage equal to or greater than the coverage under the terminated, cancelled or lapsed policies for substantially similar premiums as were in effect;
(xxv) in respect of any material Company Asset, waive, release or let lapse any material right or value or amend, modify or change, or agree to amend, modify or change, in any material respect any existing material Authorization;
(xxvi) license or transfer any Intellectual Property or exclusive rights in or in respect thereto that is material to the Company and its Subsidiaries taken as a whole, other than in the Ordinary Course or to wholly-owned Subsidiaries;
(xxvii) enter into any material transaction with any Company Employee, any independent contractor of the Company or its Subsidiaries or any director or officer of the Company or any of its Subsidiaries;
(xxviii) enter into or amend any Contract with any broker, finder or investment banker resulting in fees payable in excess of $5,000,000 or an increase of such fees in excess of $5,000,000;
(xxix) abandon or fail to diligently pursue any application for any material Authorizations, leases, permits or registrations or take any action, or fail to take any action, that could result in the material loss, expiration, termination or surrender of, or result in the loss of any material benefit under, or be reasonably expected to cause any Governmental Entity to institute proceedings for the suspension, revocation or limitation of, any material Authorizations; or
(sxxx) agree authorize, agree, resolve or commit otherwise commit, whether or not in writing, to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective TimeDate, the Company shall will exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its business and its Subsidiaries’ operations. Nothing in this Agreement, including any of the restrictions set forth herein, will be interpreted in such a way as to place any Party in violation of Law.
Appears in 1 contract
Conduct of Business of the Company. The Company shallcovenants and agrees ---------------------------------- to, and shall the Company Stockholders jointly and severally covenant and agree to cause each of its Subsidiaries the Company to, 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 contemplated by this Agreement or as required by applicable Law or with to the prior written extent that Acquiror shall otherwise consent of Parent, conduct in writing) carry on its business in the usual, regular and ordinary course of business, andin substantially the same manner as heretofore conducted, to the extent consistent therewithpay its debts and Taxes when due, the Company shallto pay or perform other obligations when due, and shall cause each of its Subsidiaries to, to use its commercially all reasonable efforts consistent with past practice and policies to preserve substantially intact its and its Subsidiaries’ present business organization, to keep available the services of its and its Subsidiaries’ current present officers and employees, to key employees and preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons others having business relationships dealings with it, all with the goal of preserving unimpaired its goodwill and ongoing businesses at the Effective Time (but all of which shall not create any post-Closing obligation on the party of Acquiror). Without limiting the generality of the foregoingThe Company covenants and agrees to, between the date of this Agreement and the Effective TimeCompany Stockholders jointly and severally covenant and agree to cause the Company to, except promptly notify Acquiror of any event or occurrence or emergency not in the ordinary course of its business. Except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable LawAgreement, the Company shall covenants and agrees to, and the Company Stockholders jointly and severally covenant and agree to cause the Company to not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Acquiror:
(a) amend enter into any commitment, activity or propose to amend its certificate transaction not in the ordinary course of incorporation or by-laws (or other comparable organizational documents)business;
(b) splitexcept for the license agreement described in Section 6.16, combine transfer to any person or reclassify, repurchase, redeem entity any ownership or otherwise acquire, or offer license rights to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary SecuritiesIntellectual Property Rights;
(c) except for the license agreement described in Section 6.16, enter into or amend any 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;
(d) amend or otherwise modify (or agree to do so), except in the ordinary course of business, or violate the terms of, any of the agreements set forth or described in the Company Schedules;
(e) commence any litigation or any dispute resolution process;
(f) declare, set aside or pay any dividend dividends on or distribution make any other distributions (whether in cash, stock, property stock or otherwiseproperty) in respect ofof any Company Common Stock, or enter into split, combine or reclassify any Contract with respect to Company Common Stock or issue or authorize the voting ofissuance of any securities, or repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock Company Common Stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company options, warrants or other direct or indirect wholly-owned Subsidiaries of the Companyrights exercisable therefor);
(dg) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) except for the issuance of shares of Company Common Stock upon exercise or conversion of presently outstanding Company Options, issue, grant, deliver or sell or authorize or propose the exercise issuance, grant, delivery or sale of, or purchase or propose the purchase of, any shares of Company Common Stock or securities convertible into, or subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, character obligating it to issue any such shares or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessother convertible securities;
(h) transfercause or permit any amendments to its Certificate of Incorporation or Bylaws;
(i) acquire or agree to acquire by merging or consolidating with, licenseor 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 business of the Company;
(j) fail in any material respect to comply with any laws, ordinances, regulations or other governmental restrictions applicable to the Company;
(k) except for the license agreement described in Section 6.16, sell, lease lease, license or otherwise dispose of any 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 Company, other than in the case of obsolete equipment its properties or assets being replaced, in each case except in the ordinary course of business and consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(jl) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Lawothers;
(m) enter into grant or agree to grant any material agreement, agreement in principle, letter of intent, memorandum of understanding severance or similar Contract with respect termination pay to any joint venturedirector, strategic partnership officer, employee or allianceconsultant, except payments made pursuant to standard written agreements outstanding on the date hereof (which agreements are disclosed on Schedule 5.1(m));
(n) authorizeadopt or amend any employee benefit plan, program, policy or arrangement, or make enter into any commitment with respect toemployment contract, extend any capital expenditureemployment offer, except as contemplated by pay or agree to pay any special bonus or special remuneration to any director, employee or consultant, or increase the Company’s existing fiscal year 2012 Capital Budgetsalaries or wage rates of its employees;
(o) makerevalue any of its assets, change including without limitation writing down the value of inventory or revoke writing off notes or accounts receivable other than in the ordinary course of business and consistent with past practice;
(p) pay, discharge or satisfy, in an amount in excess of $10,000, in any material Tax electionone case or $25,000, in the aggregate, any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the Company Financial Statements;
(q) make or change any material election in respect of Taxes, adopt or change any accounting method in respect of Tax accounting, file any material amended Tax ReturnTaxes, enter into any material closing agreement, settle any material claim or assessmentassessment in respect of Taxes, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations limitation period applicable to any material claim or assessment, assessment in each case, with respect to of Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter intointo any strategic alliance, terminatejoint development or joint marketing arrangement or agreement;
(s) fail to pay or otherwise satisfy its monetary obligations as they become due, modify except such as are being contested in good faith;
(t) waive or commit to waive any material right underrights;
(u) cancel, materially amend or renew any Material Contract or Permit, insurance policy other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business);
(v) alter, or enter into any commitment to alter, its interest in any corporation, association, joint venture, partnership or business entity in which the Company directly or indirectly holds any interest on the date hereof; or
(sw) take, or agree in writing or commit otherwise to do take, any of the foregoing. Nothing contained actions described in this Agreement shall give ParentSections 5.1(a) through (v) above, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, any other action that would prevent the Company shall exercise, consistent with from performing or cause the terms and conditions of this Agreement, complete control and supervision over Company not to perform its and its Subsidiaries’ operationscovenants hereunder.
Appears in 1 contract
Samples: Merger Agreement (Synbiotics Corp)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries toExcept as contemplated by this Agreement, during the period from commencing on the date of this Agreement until hereof and ending at the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, conduct its operations according to its ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, use its commercially all reasonable efforts to preserve substantially intact its business organization and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present maintain satisfactory relationships with its customers, suppliers, distributors, licensors, licensees suppliers and other Persons having employees and others with which it has business relationships with itrelationships. Without limiting the generality of the foregoing, between the date of and except as otherwise expressly provided in this Agreement and Agreement, prior to the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of neither the Company Disclosure Letter nor any or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries towill, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
the Parent: (a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(bequivalent governing instruments) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned in connection with mergers between Subsidiaries of the Company);
; (db) authorize for issuance, issue, sell, pledge, dispose deliver or agree or commit to issue, sell, pledge or deliver (whether through the issuance or granting of any options, warrants, calls, subscriptions, stock appreciation rights or encumber other rights or other agreements) any Company Securities capital stock of any class or Company Subsidiary Securitiesany securities convertible into or exchangeable for shares of capital stock of any class of the Company, other than (i) the issuance of shares of Company Common Stock issuable upon the exercise of any Company Stock Option Options outstanding under Company Stock Plans as of on the date of this Agreement in accordance with its termsthe present terms thereof; (c) split, combine or reclassify any shares of Company Common Stock or declare, pay or set aside for payment any dividend (other than regularly scheduled dividends on the Company Common Stock at their current levels) or other distribution in respect of any Company Common Stock, or redeem, purchase or otherwise acquire any shares of Company Common Stock; (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (id) increase or establish any Plan or otherwise increase in any manner the compensation payable or to become payable by the Company or any of its Subsidiaries to any of their respective directors, officers or employees employees, other than in the ordinary course of business consistent with past practice or as required under any existing employment agreement or other Plan, or enter into any employment or severance agreement with or grant any severance or termination pay to any director, officer or employee of the Company or any of its Subsidiaries, other than in accordance with existing Plans; (iie) enter into any new other agreements, commitments or amend in any contracts that are material respect, any existing employment, severance, retention or change in control agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of and its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 CompanySubsidiaries taken as a whole, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
; (if) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
, without the prior written consent of the Parent, otherwise take or cause to be taken any action described in clauses (rc) enter intothrough (h) of Section 3.8 between the date of this Agreement and the Effective Time; (g) acquire or agree to acquire by merging or consolidating with, terminateor by purchasing a substantial portion of the stock or assets of, modify or waive by any material right underother means, any Material Contract business or Permitany corporation, partnership, joint venture, association, or other than Contracts entered into business organization or division thereof, except that the foregoing shall not prohibit the acquisition of blocks of life insurance in force (whether by reinsurance or stock acquisition) in the ordinary course of business in amounts (calculated with customers respect to reinsurance, as the ceding commission paid, and calculated with respect to stock acquisitions, as the excess of the purchase price over the adjusted capital and surplus acquired) not to exceed (unless the Parent otherwise consents, which consent will not be unreasonably withheld) $50 million in any single transaction or $200 million in the aggregate; (h) incur or assume any indebtedness for borrowed money except (i) borrowings in the ordinary course of business under that certain Amended and Restated Credit Agreement dated as of November 2, 1995 among the Company and the financial institutions party thereto, as amended to date or (ii) reverse repurchase contracts in the ordinary course of business consistent with past practice practice; or (it being understood thati) agree, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company commit or any of its Subsidiaries in the ordinary course of business); or
(s) agree or commit arrange to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Merger Agreement (Life Re Corp)
Conduct of Business of the Company. The Company shallSubject in all respects to the last sentence of this Section 5.01, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, unless Parent shall otherwise consent in writing or except as otherwise expressly contemplated by provided for in this Agreement Section 5.01 or as required by applicable Law or with the prior written consent of Parent, conduct its business elsewhere in the ordinary course of business, and, to the extent consistent therewiththis Agreement, the Company shall, and shall cause each of its Subsidiaries to, conduct its business in the ordinary course of business consistent with past practice and shall use its commercially reasonable best efforts to preserve substantially intact and maintain its business organization and its Subsidiaries’ goodwill and relationships with customers, suppliers and others having business organization, dealings with it and to keep available the services of its key officers and employees on terms and conditions substantially comparable to those currently in effect and maintain its current material franchise and other rights, in each case, consistent with past practice; provided, however, that nothing in the sentence shall prevent the Company or any Subsidiary from substituting a State-issued franchise for a locally issued franchise in any jurisdiction or preclude changes in its franchises or other rights that are not, individually or in the aggregate, materially adverse to the Company and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective TimeIn addition, except as otherwise expressly contemplated by provided for in this Agreement or as set forth in (including any subsection of this Section 6.01 of 5.01), from the Company Disclosure Letter or as required by applicable Law, date hereof until the Company shall not, nor shall it permit any of its Subsidiaries toEffective Time, without the prior written consent of Parent (which consent shall Parent, not to be unreasonably withheld or delayed):, the Company shall not, and shall not permit any of its Subsidiaries to:
(a) amend adopt or propose to amend its any change in the certificate of incorporation or by-laws (of the Company or adopt any material change in the certificate of incorporation, by-laws or other comparable organizational documents)documents of any Subsidiary;
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(ci) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock, property stock or otherwiseproperty) in respect of, or enter into of any Contract with respect to the voting of, any shares of its capital stock (other than than, subject to Section 5.01(l), dividends or distributions from its direct declared, set aside, made or indirect paid by any Subsidiary wholly-owned Subsidiaries by the Company or another Subsidiary to the Company or such other direct Subsidiary), (ii) split, combine, subdivide or indirect wholly-owned Subsidiaries reclassify any of the Company);
(d) issue, sell, pledge, dispose of its capital stock or encumber any Company Securities issue or Company Subsidiary Securities, other than (i) 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 Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its termscapital stock, or (iiiii) in accordance with repurchase, redeem or otherwise acquire any shares of the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees capital stock of the Company or any of its Subsidiaries, (ii) enter into or any new other equity interests or amend in any material respectrights, warrants or options to acquire any existing employment, severance, retention such shares or change in control agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less interests other than $60,000 as the result of the termination or resignation of any officer or employeepursuant to, or (iv) establishin connection with, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any the Company Employee Stock Plans, or make any contribution to any Company Employee Plan;
(fc) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, licenseissue, sell, lease grant, pledge or otherwise dispose encumber any shares of any assets (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the its capital stock or other equity interests securities (including any options, warrants or any similar security exercisable for or convertible into such capital stock or similar security) other than (i) pursuant to the exercise of existing options granted under the Company Stock Plans in accordance with their present terms or (ii) delivery of shares of capital stock upon the vesting of any Subsidiary restricted stock units granted under the Company Stock Plans;
(d) merge or consolidate with any other Person (other than mergers of wholly-owned Subsidiaries of the Company) or, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, acquire an amount of assets or equity of any other Person in each case excluding any transferexcess of $500,000;
(e) sell, lease, license, salesubject to a Lien, lease other than a Permitted Lien or other disposition otherwise surrender, relinquish or dispose of any assets, property or rights (including capital stock of a Subsidiary of the Company) except (i) pursuant to existing written contracts or commitments, (ii) sales in connection the ordinary course, consistent with any transaction between or among past practice, (iii) sales of assets listed in Section 5.01(e) of the Company and/or one Disclosure Letter, or more (iv) in an amount not in excess of $500,000 individually or in the aggregate;
(f) (i) make any loans, advances or capital contributions to, or investments in, any Person other than (x) subject to Section 5.01(l), loans, advances or capital contributions to, or investments in, the ordinary course of business consistent with past practice by (A) a wholly-owned Subsidiary of the Company in or to the Company or another wholly-owned Subsidiary of the Company or (B) the Company or any of its wholly-owned SubsidiariesSubsidiaries in or to wholly-owned Subsidiaries of the Company, (y) pursuant to any contract or other legal obligation existing at the date of this Agreement, or (z) advances to employees in the ordinary course of business consistent with past practice, not to exceed $10,000 in each individual case, (ii) subject to Section 5.01(l), create, incur, guarantee or assume any new Indebtedness, issue debt securities, guarantees, loans or advances, other than as otherwise permitted by this Section 5.01 and other than borrowings in the ordinary course of business consistent with past practices, or (iii) make or commit to make capital expenditures in an aggregate amount exceeding the amount set forth in the Company’s 2010 capital expenditure budget by more than 10%;
(g) materially amend or otherwise materially modify benefits under any Company Benefit Plan, accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Benefit Plan as currently in effect on the date hereof, fail to make any required contribution to any Company Benefit Plan, merge or transfer any Company Benefit Plan or the assets or liabilities of any Company Benefit Plan, change the sponsor of any Company Benefit Plan, or terminate or establish any Company Benefit Plan, in each case except (i) as required by applicable Law or an existing agreement or plan identified in Section 3.09 of the Company Disclosure Letter, (ii) as contemplated by this Agreement or (iii) acceleration or payment or vesting or other modifications of benefits in connection with a severance arrangement permitted by Section 5.01(i);
(h) grant any increase in the compensation or benefits of directors, officers, employees, consultants, representatives or agents of the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice or as required by applicable law or any Company Benefit Plan;
(i) other than in the ordinary course of business consistent with past practice, enter into or amend or modify any change of control, severance, consulting, retention or employment agreement with any officer of the Company, or any change of control, severance, consulting, retention or employment plan, program or arrangement;
(j) other than in the ordinary course of business , settle or compromise any Action material to the business of the Company and its Subsidiaries, taken as a whole, or enter into any consent, decree, injunction or similar restraint or form of equitable relief in settlement of any Action other than such settlements and compromises that relate to Taxes (which are the subject of Section 5.01(k)) or that, individually or in the aggregate, are not material to the business or the Company and its Subsidiaries, taken as a whole;
(k) other than in the ordinary course of business consistent with past practice, (i) make or rescind any express or deemed material election relating to Taxes or consent to any extension of the limitations period applicable to any material Tax claim or assessment, (ii) settle or compromise any material Action relating to Taxes or surrender any right to obtain a material Tax refund or credit, offset or other reduction in Tax liability or (iii) change any method of reporting income or deductions for federal income tax purposes from those employed in the preparation of its federal income tax returns for the taxable year ending December 31, 2009, other than, in the case of this clause (iii), changes that, individually or in the aggregate, are not material to the business of the Company and its Subsidiaries, taken as a whole;
(l) enter into any transaction that would result in a material reduction of the Broadband Restricted Payment Capacity or the LLC Restricted Payment Capacity;
(m) enter into or renew or extend any agreements or arrangements that limit materially or otherwise materially restrict the Company or any of its Subsidiaries or any successor thereto, or that could, after the Effective Time, limit or restrict the Surviving Corporation or any of its Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(n) materially change any method of accounting or accounting principles or practices by the Company or any of its Subsidiaries, except for any such change required by a change in GAAP or applicable Law or required by the SEC;
(o) other than in the ordinary course of business consistent with past practice, terminate, cancel, amend or modify any material insurance policies maintained by it covering the Company or any of its Subsidiaries or their respective properties which is not replaced by a comparable amount of insurance coverage;
(p) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 reorganization 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from take any actions or omit to take any actions that would or would be reasonably expected to (i) result in any of the form existing on conditions to the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as consummation of the transactions contemplated by this Agreement;
Agreement set forth in Article VI not being satisfied or (rii) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers materially impair the ability of the Parties to consummate the transactions contemplated hereby in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent accordance with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company hereof or any of its Subsidiaries in the ordinary course of business)materially delay such consummation; or
(sr) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Notwithstanding anything to the contrary herein, any action taken by or on behalf of Parent, directly or indirectlyat his direction, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, will not be deemed actions by the Company shall exercise, consistent with the terms and conditions for purposes of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsSection 5.01.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of businessbusiness consistent with past practice, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, and to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees licensees, and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as set forth in Section 5.01 of the Company Disclosure Letter or as otherwise expressly contemplated by this Agreement (including to effectuate the Pre-Closing Reorganization, the Dock Square Consulting Arrangement or as set forth in Section 6.01 of the Company Disclosure Letter Pre-Closing Balance Sheet Adjustment) or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld withheld, conditioned, or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents)Organizational Documents;
(b) (i) split, combine combine, or reclassifyreclassify any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem redeem, or otherwise acquire, or offer to repurchase, redeem redeem, or otherwise acquire, any Company Securities or Company Subsidiary Securities;
Securities or (ciii) declare, set aside aside, or pay any dividend or distribution (whether in cash, stock, property property, or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the CompanySubsidiaries);
(dc) issue, sell, pledge, dispose of of, or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(ed) except as required by applicable Law or pursuant to Section 3.03, by any Company Employee Plan or Contract in effect as of the date hereof (i) increase the compensation of directors, officers payable or employees of that could become payable by the Company or any of its SubsidiariesSubsidiaries to directors, officers, or employees, other than increases in compensation made to non-officer employees in the ordinary course of business consistent with past practice, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except in connection with respect to employees with a base salary of less than $60,000 the Company’s annual or quarterly compensation review cycle or as the result of the termination or resignation of any officer or employee, or (iviii) establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any Company Employee PlansPlans or any plan, agreement, program, policy, trust, fund, or other arrangement that would be a Company Employee Plan if it were in existence as of the date hereof, 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;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(ge) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances advances, or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(hf) (i) transfer, license, sell, lease lease, or otherwise dispose of any assets (whether by way of merger, consolidation, sale of stock or assets, or otherwise) or pledge, encumber, or otherwise subject to any Lien (other than a Permitted Lien), any assets, including the capital stock or other equity interests in any Subsidiary of the CompanyCompany or any Real Estate; provided, other than in that the case foregoing shall not prohibit the Company and its Subsidiaries from transferring, selling, leasing, or disposing of obsolete equipment or assets being replaced, or granting non-exclusive licenses under the Company IP, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(iii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, or other reorganization;
(jg) 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 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiariespractice;
(kh) institute anyenter into or amend or modify in any material respect, or settle consent to the termination of (other than at its stated expiry date), any Company Material Contract or any Lease with respect to Real Estate or any other Contract or Lease that, if in effect as of the date hereof would constitute a Company Material Contract or Lease with respect to Real Estate hereunder;
(i) institute, settle, or compromise any pending or threatened, Legal Actions Action involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregateSubsidiaries, other than (i) any Legal Action brought against Parent or Merger Sub the Company arising out of a breach or alleged breach of this Agreement by Parent the Company, and (ii) the settlement of claims, liabilities, or Merger Subobligations reserved against on the Company Balance Sheet; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofCompany’s business;
(lj) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(mk) (i) settle or compromise any material Tax claim, audit, or assessment for an amount materially in excess of the amount reserved or accrued on the Company Balance Sheet, (ii) make or change any material Tax election, change any annual Tax accounting period, or adopt or change any method of Tax accounting, (iii) amend any material Tax Returns or file claims for material Tax refunds, or (iv) enter into any material closing agreement, surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or its Subsidiaries;
(l) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding understanding, or similar Contract with respect to any joint venture, strategic partnership partnership, or alliance;
(nm) authorizetake any action to exempt any Person from, or make any commitment with respect acquisition of securities of the Company by any Person not subject to, any capital expenditure, except as contemplated by state takeover statute or similar statute or regulation that applies to the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, Company with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company a Takeover Proposal or otherwise, except for Parent or any of its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereofAffiliates, or implement a rights plan, “poison pill” or similar arrangement, except as the transactions contemplated by this Agreement;
(rn) enter intoabandon, terminateallow to lapse, modify sell, assign, transfer, grant any security interest in otherwise encumber or waive dispose of any material Company IP, or grant any right under, or license to any Material Contract or Permit, Company IP other than Contracts pursuant to non-exclusive licenses entered into with customers in the ordinary course of business consistent with past practice practice;
(it being understood thato) terminate or modify in any material respect, for the purposes of this subsectionor fail to exercise renewal rights with respect to, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business)material insurance policy; or
(sp) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated permitted by this Agreement or as required by applicable Law or with as consented to in writing by Parent after the date of this Agreement and prior written consent of Parentto the Effective Time, which consent, shall not be unreasonably withheld or delayed, conduct its business in the ordinary course of businessbusiness consistent with past practice, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in on Section 6.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without unless consented to in writing by Parent after the date of this Agreement and prior written consent to the Effective Time, which consent, solely in the case of Parent clauses (which consent d)—(s) below, shall not be unreasonably withheld or delayed)::
(a) amend or propose to amend its certificate of incorporation or by-laws bylaws (or other comparable organizational documents);
(b) (i) split, combine combine, merge, consolidate or reclassifyreclassify any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Table of Contents Company Securities or Company Subsidiary Securities;
, or (ciii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the CompanySubsidiary);
(dc) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option Equity Award outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with the Stockholder Rights Agreementtheir terms;
(ed) except as required by applicable Law or pursuant to Section 3.03by any Company Employee Plan or Contract in effect as of the date of this Agreement, (i) increase the compensation of directors, officers payable or employees of that could become payable by the Company or any of its SubsidiariesSubsidiaries to directors, officers or employees or other individual service providers, other than increases in compensation made in the ordinary course of business consistent with past practice, (ii) enter into any new new, or amend in any material respectrespect any existing, any existing employment, severance, retention or change in control agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except in connection with respect to employees with a base salary of less than $60,000 the Company’s annual or quarterly compensation review cycle or as the result of the termination or resignation of any officer or employee, or (iv) hire any employees with aggregate compensation (including severance benefits) in excess of $150,000, other than new hires in the ordinary course of business consistent with past practice, (v) establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any Company Employee PlansPlans or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement except as may be required to remain in compliance with applicable Law, or (vi) 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;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(ge) acquire, directly or indirectly, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or any capital stock of, or other equity or voting interests in, any Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into Person in between or among the Company and/or any excess of its wholly-owned Subsidiaries, (x) trade payables arising $250,000 in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessaggregate;
(hi) transfer, license, sell, lease lease, abandon or otherwise dispose of any 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 Company, other than in provided that the case foregoing shall not prohibit the Company and its Subsidiaries from transferring, licensing, selling, leasing or disposing of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(iii) adopt or effect a plan of complete or partial liquidation, dissolution, business combination, consolidation, restructuring, recapitalization or other reorganization;
(jg) repurchase, prepay or incur any indebtedness for borrowed money Indebtedness or guarantee any such indebtedness 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables and other operating expenses consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into and consistent with the terms of the agreements governing the Company’s outstanding Indebtedness as in between or among effect as of the Company and/or any of its wholly-owned Subsidiariesdate hereof;
(kh) institute anyexcept in the ordinary course of business consistent with past practice, enter into or amend, modify, extend or renew in any respect, or consent to the termination of (other than at its stated expiry date), any Company Material Contract or any Lease with respect to Real Estate or any other Contract or Lease that, if in effect as of the date hereof would constitute a Company Material Contract or Lease with respect to Real Estate hereunder; Table of Contents (i) institute, settle or compromise any Legal Actions pending or threatenedthreatened before any arbitrator, Legal Actions court or other Governmental Entity involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 250,000 in the aggregate, other than (i) 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 (ii) the settlement of claims, liabilities or obligations reserved against on the most recent balance sheet of the Company included in the Company SEC Documents; provided, provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budgetbusiness;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(s) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of ParentBuyer, conduct its business in the ordinary course of businessbusiness consistent with past practice, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in on Section 6.01 5.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent Buyer (which consent shall not be unreasonably withheld or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(b) (i) split, combine or reclassifyreclassify any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
, (ciii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the CompanySubsidiaries);
(dc) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option Options outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with its their terms, or (iiiii) the issuance of Company Stock Options and the issuance of shares of Company Common Stock upon the exercise of such Company Stock Options (other than to or by directors or executive officers of the Company) in accordance with their terms in the Stockholder Rights Agreementordinary course of business consistent with past practice;
(ed) except as required by applicable Law or pursuant to Section 3.03by any Company Employee Plan or Contract in effect as of the date of this Agreement, (i) increase the compensation of directors, officers payable or employees of that could become payable by the Company or any of its SubsidiariesSubsidiaries to directors, officers or employees, other than increases in compensation made in the ordinary course of business consistent with past practice, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except employee promotions made in the ordinary course of business consistent with respect to employees with a base salary of less than $60,000 as the result of the termination or resignation of any officer or employeepast practice, or (iv) establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any Company Employee PlansPlans or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this 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;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(ge) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into Person in between or among the Company and/or any excess of its wholly-owned Subsidiaries, (x) trade payables arising $50,000 in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessaggregate;
(hi) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in provided that the case foregoing shall not prohibit the Company and its Subsidiaries from transferring, licensing, selling, leasing or disposing of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(iii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(jg) 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiariespractice;
(kh) institute anyenter into or amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any Company Material Contract or any Lease or any other Contract, if in effect as of the date hereof would constitute a Company Material Contract or Lease;
(i) institute, settle or compromise any Legal Actions pending or threatenedthreatened before any arbitrator, Legal Actions court or other Governmental Entity involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 50,000 in the aggregate, other than (i) any Legal Action brought against Parent Buyer or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent Buyer or Merger Sub, and (ii) the settlement of claims, liabilities or obligations reserved against on the most recent balance sheet of the Company included in the Company SEC Documents; provided, provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofCompany’s business;
(lj) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(mk) (i) settle or compromise any material Tax claim, audit or assessment, (ii) make or change any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, (iii) amend any material Tax Returns or file claims for material Tax refunds, or (iv) enter into any material closing agreement, surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or its Subsidiaries;
(l) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts reseller agreements entered into with customers in the ordinary course of business consistent with past practice practice;
(it being understood thatm) except in connection with actions permitted by Section 5.04 hereof, for the purposes take any action to exempt any Person from, or make any acquisition of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts securities of similar size and scope previously entered into by the Company by any Person not subject to, any state takeover statute or similar statute or regulation that applies to Company with respect to a Takeover Proposal or otherwise, including the restrictions on “business combinations” set forth in Section 203 of the DGCL, except for Buyer, Merger Sub or any of its their respective Subsidiaries or Affiliates, or the transactions contemplated by this Agreement;
(n) abandon, encumber, convey title (in whole or in part), exclusively license or grant any right or other licenses to Company-Owned Intellectual Property, other than in the ordinary course of business)business consistent with past practice; or
(so) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Merger Agreement (Sajan Inc)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement until the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of businessbusiness consistent with past practice, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to maintain and preserve substantially intact its and its Subsidiaries’ business organizationorganizations, to keep available the services of its and its Subsidiaries’ current officers and employees, to maintain and preserve intact its and its Subsidiaries’ present relationships and goodwill with customers, suppliers, distributors, licensors, licensees licensees, and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or Agreement, as set forth in Section 6.01 5.01 of the Company Disclosure Letter Letter, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Parent:
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents)Charter Documents;
(b) (i) split, combine combine, or reclassifyreclassify any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem redeem, or otherwise acquire, or offer to repurchase, redeem redeem, or otherwise acquire, any Company Securities or Company Subsidiary Securities;
, or (ciii) declare, set aside aside, set a record date for or pay any dividend or distribution (whether in cash, stock, property property, or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the CompanySubsidiaries);
(dc) issue, sell, pledge, dispose of of, or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option Equity Award outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(ed) except as required by applicable Law or pursuant to Section 3.03, by any Company Employee Plan or Contract in effect as of the date of this Agreement (i) grant or increase the compensation of directorsseverance or termination pay to any current or former director, officers employee, agent or employees consultant of the Company or any of its Subsidiaries, (ii) enter into execute any new or amend in any material respect, any existing employment, severanceconsultancy, retention deferred compensation or change in control other similar agreement (or any amendment to any such existing agreement) with any such director, employee, agent or consultant of the Company or its Subsidiaries; (iii) increase the compensation, bonus or benefits payable or that could become payable by the Company or any of its past or present Subsidiaries to directors, officers officers, or employees, other than increases in compensation made to non-officer employees in the ordinary course of business consistent with past practice, (iiiiv) lend or advance any money or other property to any present or former director or employee of the Company or its Subsidiaries; (v) promote any officers or employees, except in connection with respect to employees with a base salary of less than $60,000 the Company’s annual or quarterly compensation review cycle or as the result of the termination or resignation of any officer or employee, or (ivvi) enter into any collective bargaining agreement or other labor agreement; (vii) establish, adopt, enter into, amend, terminate, exercise any discretion (except in the ordinary course of business) under, or take any action to accelerate rights under any Company Employee PlansPlans or any plan, agreement, program, policy, trust, fund, or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this 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;
(e) (A) other than any termination by the Company or any of its Subsidiaries for cause, terminate the employment of any officer or employee with the title of vice president or above, or (B) undertake (1) any material reduction in force, (2) any reduction in force that would result in any liability by the Company or any of its Subsidiaries for noncompliance with the notice provisions of the WARN Act, or (C) any reduction in force that is subject to the WARN Act, in each case, in respect of employees of the Company and its Subsidiaries;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances advances, or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(hg) (i) transfer, license, sublicense, sell, lease lease, sublease or otherwise dispose of any assets (whether by way of merger, consolidation, sale of stock or assets, or otherwise) or pledge, encumber, or otherwise subject to any Lien (other than a Permitted Lien), any assets, including the capital stock or other equity interests in any Subsidiary of the Company; provided, other than in that the case foregoing shall not prohibit the Company and its Subsidiaries from transferring, selling, leasing, or disposing of obsolete equipment or assets being replaced, or granting non-exclusive licenses under the Company IP or the Company-Owned IP, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(iii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, or other reorganization;
(jh) 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 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, and except for intercompany loans entered into up to $5.0 million of additional indebtedness under the Credit Agreement than what is outstanding as of the date of this Agreement (it being understood that such $5.0 million shall be in between or among addition to indebtedness incurred in connection with the Company and/or any financing of its wholly-owned Subsidiariesordinary course trade payables);
(ki) institute anyenter into or amend or modify in any material respect, or settle consent to the termination of (other than at its stated expiry date), any Company Material Contract or any Lease with respect to Real Estate or any other Contract or Lease that, if in effect as of the date hereof would constitute a Company Material Contract or Lease with respect to Real Estate hereunder;
(j) institute, settle, compromise or otherwise resolve in whole or in part any pending or threatened, Legal Actions Action involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregatefor any individual Legal Action, other than (i) 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 (ii) the settlement of claims, liabilities, or obligations reserved against on the Company Balance Sheet; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofCompany’s business;
(lk) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) (i) settle or compromise any material Tax claim, audit, or assessment for an amount materially in excess of the amount reserved or accrued on the Company Balance Sheet (or most recent consolidated balance sheet included in the Company SEC Documents), (ii) make, change or rescind any material Tax election, change any annual Tax accounting period, or adopt or change any method of Tax accounting, (iii) amend any material Tax Returns or file claims for material Tax refunds, or (iv) enter into any material closing agreement, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or its Subsidiaries;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding understanding, or similar Contract with respect to any joint venture, strategic partnership partnership, or alliance;
(n) authorizewaive, release, assign or make fail to exercise or pursue any commitment material right, claim or benefit of the Company or any of its Subsidiaries under any restrictive covenant with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budgetofficer or employee;
(o) makeengage in any transaction or series of transactions with any Affiliate that would be required to be disclosed under Item 404 of Regulation S-K of the Securities Act, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent without regard to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxesmonetary thresholds therein;
(p) fail except in connection with actions permitted by Section 5.04 hereof, take any action to maintain in full force and effect material insurance policies covering exempt any Person from, or make any acquisition of securities of the Company by any Person not subject to, any state takeover statute or its Subsidiaries and its similar statute or their propertiesregulation that applies to the Company with respect to a Takeover Proposal or otherwise, assets and businesses including the restrictions on “business combinations” set forth in a form and amount consistent with past practice;
(q) adoptSection 203 of the DGCL, modify from the form existing on the date hereofexcept for Parent, Merger Sub, or implement a rights planany of their respective Subsidiaries or Affiliates, “poison pill” or similar arrangement, except as the transactions contemplated by this Agreement;
(rq) enter intoabandon, terminateallow to lapse, modify sell, assign, transfer, grant any security interest in, otherwise encumber or waive dispose of any material right underCompany IP, or grant any Material Contract right, license or Permit, sublicense to any Company IP other than Contracts pursuant to non-exclusive licenses or sublicenses entered into with customers in the ordinary course of business consistent with past practice (it being understood thatpractice, or divulge, furnish to or make accessible any trade secrets within Company IP to any third party, except under appropriate protections for the purposes confidentiality thereof;
(r) terminate or modify in any material respect, or fail to exercise renewal rights with respect to, any material insurance policy;
(s) make or commit to make any capital expenditures, other than for the repair or replacement of this subsection, “consistent with past practice” shall not include entering into any Contract having terms property and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries equipment in the ordinary course of business); or
(st) agree or commit to do any of the foregoing. Nothing Without in any way limiting any party’s rights or obligations under this Agreement, the parties understand and agree that (a) nothing contained in this Agreement shall give ParentParent or the Company, directly or indirectly, the right to control or direct the Companyother party’s or its Subsidiaries’ operations prior to the Effective Time. Prior Time and (b) prior to the Effective Time, each of the Company and Parent shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
Appears in 1 contract
Conduct of Business of the Company. The Company shallExcept (i) as contemplated or permitted by this Agreement, and (ii) as disclosed in Section 4.1 of the Disclosure Letter, (iii) as required by law, or by a Governmental Entity of competent jurisdiction, or (iv) to the extent that Parent shall cause each of its Subsidiaries tootherwise consent in writing, during the period from the date hereof to the earlier of the Effective Time and the termination of this Agreement until in accordance with its terms, the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, Company will and will cause each Subsidiary to conduct its business operations in the ordinary course of business, business consistent with past practice and, to the extent consistent therewith, and with no less diligence and effort than would be applied in the Company shallabsence of this Agreement, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts seek to preserve substantially intact its and its Subsidiaries’ current business organizationorganizations, to keep available the services service of its and its Subsidiaries’ current officers and employees, to employees and preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees customers and other Persons having business relationships suppliers with itthe intention that its goodwill and ongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, between except (i) as otherwise permitted or contemplated by this Agreement, (ii) as disclosed in Section 4.1 of the Disclosure Letter, (iii) as required by law, or by a Governmental Entity of competent jurisdiction, or (iv) to the extent that Parent shall otherwise consent in writing, during the period from the date hereof to the earlier of this Agreement and the Effective Time, except as otherwise expressly contemplated by and the termination of this Agreement or as set forth in Section 6.01 of accordance with its terms, neither the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Subsidiary will:
(a) amend its Certificate or propose to amend its certificate Articles of incorporation Incorporation or by-laws bylaws (or other comparable organizational documentssimilar governing document);
(b) splitauthorize for issuance, combine issue, sell, deliver or reclassifyagree or commit to issue sell or deliver (whether through the issuance or granting of options, repurchasewarrants, redeem commitments, subscriptions, rights to purchase or otherwise acquire, otherwise) any stock of any class or offer any other securities (except bank loans) or equity equivalents (including any stock options or stock appreciation rights) except for the issuance and sale of Shares pursuant to repurchase, redeem or otherwise acquire, any Company Securities or Stock Options granted under the Company Subsidiary SecuritiesPlans;
(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, stock or property or otherwiseany combination thereof) in respect ofof its capital stock, make any other actual, constructive or enter into any Contract with deemed distribution in respect to the voting of, any shares of its capital stock or otherwise make any payments to stockholders in their capacity as such, or redeem or otherwise acquire any of its securities or any securities of any Subsidiary (other than dividends the repurchase of restricted stock and cancellation of Company Stock Options following termination of employment with or distributions from its direct or indirect wholly-owned Subsidiaries provision of services to the Company or other direct or indirect wholly-owned Subsidiaries of the Companyany Subsidiary);
(d) issueadopt a plan of complete or partial liquidation, selldissolution, pledgemerger, dispose of consolidation, restructuring, recapitalization or encumber any Company Securities or Company Subsidiary Securities, other reorganization (other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights AgreementMerger);
(e) except as required by applicable Law or pursuant to Section 3.03alter through merger, (i) increase the compensation of directorsliquidation, officers or employees of the Company reorganization, restructuring or any other fashion the corporate structure of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 as the result of the termination or resignation ownership of any officer or employee, or (iv) establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee PlanSubsidiary;
(f) hire (i) incur, assume or forgive any officer long-term or employee, short-term debt or issue any debt securities except for borrowings under existing lines of credit in the replacement ordinary course of business consistent with past practices or trade payables arising in the ordinary course of business consistent with past practices; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any current employee whose employment other person except for obligations of Subsidiaries incurred in the ordinary course of business consistent with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
past practices; (giii) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for other person (w) intercompany loans, advances other than to Subsidiaries or capital contributions entered into in between customary loans or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease practices); (iv) pledge or other disposition in connection with any transaction between or among the Company and/or one or more otherwise encumber shares of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 capital stock of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” Subsidiary 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, Other Interests or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice (v) mortgage or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or pledge any of its wholly-owned Subsidiariesmaterial properties or assets, tangible or intangible, or create or suffer to exist any material Lien thereupon;
(kg) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change as may be required by a change in GAAP or applicable Law;
law, (m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(ri) enter into, terminateadopt, modify amend in any manner or waive terminate any material right underbonus, any Material Contract or Permitprofit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, other than Contracts offer letters, letter agreements and options to purchase Shares entered into with customers new hires in the ordinary course of business consistent with past practice and performance bonuses granted to employees on a basis consistent with the past practices of the Company, (it being understood thatii) enter into, adopt, amend or terminate any pension, retirement, deferred compensation, employment, health, life, or disability insurance, dependent care, severance or other employee benefit plan agreement, trust, fund or other arrangement for the purposes benefit or welfare of this subsectionany director, “officer or employee, other than in the ordinary course of the Company’s business consistent with past practice or (iii) increase in any manner the compensation or fringe benefits of any director, officer or employee or consultant or pay any benefit not required by any plan and arrangement as in effect as of the date hereof (including the granting of stock appreciation rights or performance units), except for normal increases in cash compensation in the ordinary course of business consistent with past practice” shall not include entering into ;
(i) acquire, sell, lease, license or dispose of any Contract assets or properties in any single transaction or series of related transactions having terms and conditions a fair market value in excess of One Million Dollars (including terms and conditions regarding pricing and Liabilities$1,000,000) that are, in the aggregate, substantially other than sales or licenses of its products in the ordinary course of business consistent with past practices; (ii) enter into any exclusive license, distribution, marketing, sales or other agreement; (iii) enter into a “development services” or other similar agreement pursuant to which the Company may purchase or otherwise acquire the services of another person, other than in the ordinary course of business consistent with past practices; (iv) acquire, sell, lease, license, transfer, encumber, enforce, or otherwise dispose of any Company Intellectual Property, other than licenses or sales of its products or services in the ordinary course of business consistent with past practices or (v) knowingly, willfully, wantonly, or negligently infringe upon, misappropriate or otherwise violate the rights of any third party intellectual property;
(i) unless required by a change in applicable law or in United States generally accepted accounting principles, change any of the accounting principles, practices or methods used by it;
(j) revalue any of its assets or properties, 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 practices;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, limited liability company, partnership or other person or any division thereof or any equity interest therein; (ii) enter into any Contract other than in the ordinary course of business consistent with past practices that would be material to the Company and its Subsidiaries, taken as a whole; (iii) amend, modify or waive any right under any of its material Contracts; (iv) modify its standard warranty terms for its products or services or amend or modify any product or service warranties in effect as of the date hereof in any material manner that is adverse to the Company or any Subsidiary; (v) enter into any Contract that contains non-competition restrictions, including any restrictions relating to the conduct of the Company’s or any Subsidiary’s business or the sale of the Company’s or any Subsidiary’s products or any geographic restrictions, in any case that would prohibit or restrict the Surviving Company or any of its affiliates from conducting the business of the Company or any Subsidiary as presently conducted or (vi) authorize any new capital expenditure other than as set forth in Section 4.1(k) of the Parent Disclosure Letter up to an aggregate amount equal to One Million Dollars ($1,000,000);
(l) make or rescind any express or deemed election relating to Taxes or settle or compromise any Tax liability or enter into any closing or other agreement with any Tax authority; or file or cause to be filed any amended Tax Return, file or cause to be filed claim for refund of Taxes previously paid, or agree to an extension of a statute of limitations with respect to the assessment or determination of Taxes;
(m) fail to file any Tax Returns when due, fail to cause such Tax Returns when filed to be true, correct and complete, prepare or fail to file any Tax Return of the Company in a manner inconsistent with past practices in preparing or filing similar Tax Returns in prior periods 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, in each case, except to the terms and conditions found in other Contracts extent required by applicable law; or fail to pay any Taxes when due;
(n) settle or compromise any pending or threatened suit, action or claim that (i) relates to the transactions contemplated hereby or (ii) the settlement or compromise of similar size and scope previously entered into which would require the payment by the Company or any Subsidiary of its Subsidiaries damages in excess of Five Hundred Thousand Dollars ($500,000) or involves any equitable relief;
(o) knowingly take any action that would result in a failure to maintain trading of the Shares on the Nasdaq National Market;
(p) take any action that results in the ordinary course acceleration of business)vesting of any Company Stock Option, except as may be required pursuant to any agreement in effect as of the date hereof;
(q) allow any Insurance Policy to be amended or terminated without replacing such policy with a policy providing at least equal coverage, insuring comparable risks and issued by an insurance company financially comparable to the prior insurance company; or
(sr) take or agree in writing or commit otherwise to do take any of the foregoingactions described in Sections 4.1(a) through 4.1(q). Nothing contained in Notwithstanding the foregoing and any other provision of this Agreement Agreement, neither Parent nor Acquisition shall give Parent, directly or indirectly, have the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Merger Agreement (K2 Inc)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during (a) During the period from the date of this Agreement until to the Effective Time, Time (unless Parent otherwise agrees in writing and except as otherwise expressly contemplated by this Agreement or as required by applicable Law or with set forth in Section 6.1 of the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewithDisclosure Schedule), the Company shall, and shall cause each of its Subsidiaries to, use conduct its commercially reasonable efforts operations according to its ordinary and usual course of business consistent with past practice and, to the extent consistent therewith, with no less diligence and effort than would be applied in the absence of this Agreement, seek to preserve substantially intact its and its Subsidiaries’ current business organizationorganizations, to keep available the services service of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees suppliers and other Persons others having business relationships dealings with itit and comply in all material respects with all applicable Laws. Without limiting the generality of the foregoingforegoing sentence, between the date of and except required by applicable Law or as otherwise expressly permitted in this Agreement and Agreement, prior to the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of neither the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries toshall, without the prior written consent of Parent (which consent shall not be unreasonably withheld conditioned, delayed or delayedwithheld):
(ai) amend except for Shares required to be issued or delivered pursuant to the Option Plans or pursuant to the Company Plans, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose to amend its certificate of incorporation the issuance, sale, disposition or by-laws (pledge or other comparable organizational documents)encumbrance of any Company Securities or Subsidiary Securities;
(bii) splitexcept as required pursuant to the Company’s stock-based employee benefit plans, combine or reclassifyredeem, repurchasepurchase, redeem amend or otherwise acquire, or offer propose to repurchaseredeem, redeem purchase, amend or otherwise acquire, any outstanding Shares, Company Securities or Company Subsidiary Securities;
(ciii) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend dividend, or make any other actual, constructive or deemed distribution (whether in cash, stock, property or otherwise) in respect ofof any Shares or otherwise make any payments to shareholders in their capacity as such, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than except for dividends or distributions from its direct or indirect wholly-by a wholly owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries Subsidiary of the Company);
(div) issueadopt a plan of complete or partial liquidation, selldissolution, pledgemerger, dispose of consolidation, restructuring, recapitalization or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees reorganization of the Company or any of its Subsidiaries, Subsidiaries (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less other than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee PlanMerger);
(fv) hire adopt any officer amendments to its articles of incorporation or employeebylaws or alter through merger, except for liquidation, reorganization, restructuring or in any other fashion the replacement corporate structure or ownership of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000Subsidiary;
(gvi) acquire(A) make any material acquisition, by means of merger, consolidation, acquisition of stock or assets, consolidation or otherwise, or material sale, lease, encumbrance or disposition, of any business business, assets or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiariessecurities, (xB) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, enter into a Material Contract or material customer contract or amend, renew or terminate any Material Contract or material customer contract or grant any release or relinquishment of any rights under any Material Contract or material customer contract, (C) other than in each case excluding the ordinary course of business consistent with past practice, terminate any transferReal Property Lease or enter into any lease of real property, license(D) other than in the ordinary course of business consistent with past practice, saleextend any option to purchase real property, lease or other disposition in connection with (E) outsource any transaction between material businesses, processes or among the Company and/or one services, or more of its wholly-owned Subsidiariesany portion thereof;
(ivii) adopt (A) incur, create, assume or effect a plan of complete otherwise become liable for, or partial liquidationrepay or prepay, dissolutionor amend, restructuring, recapitalization modify or other reorganization;
(j) incur refinance any material indebtedness for borrowed money or guarantee any such indebtedness of another or make any material loans, advances or capital contributions to, or investments in, any other Person, issue other than to the Company or sell any debt securities wholly owned Subsidiary of the Company, or options(B) other than in the ordinary course of business consistent with past practice, warrantsmortgage, calls pledge or otherwise encumber any of its assets (tangible or intangible), or create, assume or suffer to exist any Liens (other than immaterial Liens) thereupon;
(viii) change any of the accounting methods, principles or practices used by it, except as required by Law or GAAP;
(ix) make or change any material Tax election, settle or compromise any material Tax liability, forego any material Tax refund or enter into any closing agreement with any Tax authority;
(x) forgive any loans to employees, officers or directors or any of their respective affiliates or associates;
(xi) (A) make or agree to make any capital expenditure or expenditures, other than in the ordinary course of business consistent with past practice, or enter into any agreements or arrangements providing for the same, or (B) enter into any new line of business outside of its existing business segments;
(xii) enter into, amend or extend any collective bargaining or other rights to acquire labor agreement;
(xiii) renew or enter into any debt securities non-compete, exclusivity, non-solicitation or similar agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” Subsidiaries (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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company Parent or any of its Subsidiaries affiliates after the consummation of the Merger);
(xiv) license, sell, transfer, abandon, fail to maintain or otherwise dispose of, in whole or in part, any amount exceeding $25,000 individually or $100,000 in the aggregateCompany Intellectual Property, other than any Legal Action brought against Parent or Merger Sub arising out in the ordinary course of a breach or alleged breach of this Agreement by Parent or Merger Sub; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(qxv) adoptcompromise, modify from 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 form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as transactions contemplated by this Agreement;
(rhereby) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers compromises, settlements or agreements in the ordinary course of business consistent with past practice (it being understood that, for that involve only the purposes payment of this subsection, “consistent with past practice” shall monetary damages not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in excess of $1,000,000 individually or $2,500,000 in the aggregate, substantially inconsistent with in any case without the terms and conditions found in other Contracts imposition of similar size and scope previously entered into by equitable relief on, or the admission of wrongdoing by, the Company or any of its Subsidiaries;
(xvi) convene any regular or special meeting (or any adjournment thereof) of the shareholders of the Company other than the Shareholders Meeting;
(xvii) except in accordance with Section 6.2(b), enter into any agreement, understanding or arrangement with respect to the voting or registration of the Company Securities or the Subsidiary Securities;
(xviii) except to the extent replaced with policies of comparable or greater coverage, fail to keep in force insurance policies or replacement or revised provisions providing insurance coverage with respect to the assets, operations and activities of the Company and its Subsidiaries as are currently in effect;
(xix) enter into, amend, waive or terminate (other than terminations in accordance with their terms) any Related Party Transaction;
(xx) grant or agree to grant any increases in the compensation of any of its directors, officers or key employees, except as required by any Company Plan or written employment agreement in effect as of the date of this Agreement and previously made available to Parent (other than, in each case, for changes in compensation made to non-executive employees in the ordinary course of businessbusiness consistent with past practice), or (except for cash-based awards granted to non-executive officers in the ordinary course of business consistent with past practice, or as contractually required by the ESPP or with respect to any pro-rata, pre-Closing 2009 or 2010 bonuses under the MPS Group, Inc. Executive Annual Incentive Plan, in each case as in effect on the date of this Agreement) grant or agree to grant any stock-related, cash-based, performance or similar awards or bonuses or any other award that may be settled in Shares, Preferred Shares or other Company Securities or in Subsidiary Securities or the value of which is linked directly or indirectly to the price or value of any Shares, Preferred Shares or other Company Securities or Subsidiary Securities;
(xxi) pay or agree to pay any pension, retirement allowance or other employee benefit not required by any Company Plan or written employment agreement in effect as of the date of this Agreement and previously made available to Parent to any director, officer or key employee whether past or present; or enter into any new or amend any existing employment or severance or termination agreement with any director, officer or key employee;
(xxii) except in the ordinary course of business consistent with past practice or as may be required to comply with applicable law, enter into or adopt any new employee benefit plan, program or arrangement that would be a Company Plan if it were in existence as of the date of this Agreement (including any equity incentive plan, program or arrangement), that was not in existence on the date of this Agreement, or materially amend any Company Plan or written employment agreement in effect as of the date of this Agreement; or
(sxxiii) agree authorize, recommend, propose or commit announce an intention to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectlyenter into any contract, agreement, commitment or arrangement to do any of the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Samples: Merger Agreement (MPS Group Inc)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except Except as expressly contemplated by this Agreement or as may be required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent may be consented in writing by Buyer (which consent shall not be unreasonably withheld or delayed):
), and may be expressed by this Agreement (a) amend or propose to amend its certificate including, for the avoidance of incorporation or by-laws (or other comparable organizational documents);
(b) splitdoubt, combine or reclassifyany action set forth in Section 6.10, repurchase, redeem or otherwise acquireSection 6.1 of the Company Disclosure Schedules, or offer to repurchaseExhibit C), redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to from and after the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to date hereof until the Company or other direct or indirect wholly-owned Subsidiaries earlier of the Company);
(d) issue, sell, pledge, dispose of Closing Date or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date termination of this Agreement in accordance with its terms, the Company shall, and shall cause each other Group Company to, and Lux Seller shall cause each of the Group Companies to, (a) conduct its business in all material respects in the ordinary course consistent with past practice and (b) use commercially reasonable efforts to (i) preserve substantially intact its business organization and to preserve the present commercial relationships of the Group Companies with significant customers, suppliers and other third parties with whom the Group Companies have significant business relations and (ii) retain the services of the Group Companies’ key employees. Without limiting the generality of the foregoing, except as may be required by Law or any Governmental Entity, may be consented in writing by Buyer (which consent shall not be unreasonably withheld or delayed), or expressed by this Agreement (including, for the avoidance of doubt, any action set forth in Section 6.10, Section 6.1 of the Company Disclosure Schedules or Exhibit C), from the date hereof until the earlier of the Closing Date and the Termination Date, the Company shall not and shall cause each other Group Company not to, and Lux Seller shall cause the Group Companies not to, do any of the following:
(a) issue, sell or pledge, dispose of, encumber, deliver or authorize or propose the issuance, sale or pledge, disposition, encumbrance or delivery of (i) any shares of capital stock or voting securities of any class of any of the Group Companies (including the Shares and the USco Shares), or securities convertible into or exchangeable for any such shares, or any rights, warrants or options to acquire any such shares or other convertible securities of any of the Group Companies or (ii) any other securities in accordance respect of, in lieu of, or in substitution for shares of capital stock of any of the Group Companies (including the Shares and the USco Shares) outstanding on the date hereof;
(i) make any payments in cash or in kind, or advance or loan any funds to Sellers or any of their Affiliates, otherwise 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 or equity interests, except for dividends or other distributions by any Subsidiary of the Stockholder Rights AgreementCompany to the Company or any other Subsidiary of the Company, or (ii) adjust, split, combine, or reclassify any of its capital stock or other voting securities or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other securities;
(c) redeem, purchase or otherwise acquire any outstanding shares of the capital stock of the Company or any of the Group Companies which are not wholly-owned, directly or indirectly, by the Company;
(i) sell, lease, license, transfer or otherwise dispose of (by merger, consolidation or sale of stock or assets or otherwise) any material corporation, partnership or other business organization or division or any of its material property or material assets or (ii) create any Lien (other than a Permitted Lien) on any material property or assets, other than sales, leases, licenses, transfers and dispositions in the ordinary course of business, as may be required by applicable Law or any Governmental Authority in order to permit or facilitate the consummation of the transactions contemplated hereby;
(e) adopt any amendment to the Governing Documents of any of the Material Group Companies;
(f) incur any Indebtedness not repayable in connection with the Closing (other than letters of credit to secure supplies of goods in the ordinary course consistent with past practice and letters of credit in Europe in an individual amount not in excess of €100,000 for security on leases and property related transactions, in each case entered into in the ordinary course of business);
(g) except as to the extent required by applicable Law or pursuant to Section 3.03by Company Material Contracts or the terms of the Company Benefits Plans (each as in existence as of the date hereof), (i) increase the compensation of or benefits payable or to become payable to the directors, officers officers, consultants or employees of any Group Company, other than for increases in annual base salary in the Company or any ordinary course of its Subsidiariesbusiness consistent with past practice (including, for this purpose, the normal salary review process conducted each year), (ii) enter into any new or amend in any material respectbecome a party to, any existing employment, severance, retention or change in control agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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, into or take any action to accelerate rights under amend any Company Benefit Plan, any arrangement that would be a Company Benefit Plan if it were in effect on the date hereof or any collective bargaining, (iii) accelerate the vesting or payment or cause to be funded or otherwise secure the payment of any compensation and/or benefits, (iv) grant any cash or equity based bonus or incentive awards, (v) hire any officers or managers at any Group Company except to the extent such hires are reasonably necessary to replace officers or managers in key positions who are no longer employed after the date hereof, (vi) terminate the employment of any officers of any Group Company or any Management Employee Plans, or make (vii) materially change any contribution actuarial or other assumptions used to calculate funding obligations with respect to any Company Employee PlanBenefit Plan or materially change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by the Accounting Principles;
(fh) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions contributions, other than loans or advances in the ordinary course of business consistent with past practice (including advances for travel and other normal business expenses to directors, officers and employees, but excluding loans or investments other advances to officers and directors);
(i) directly or indirectly engage in any PersonAffiliate Transaction (other than (i) between Group Companies or (ii) with respect to employment relationships and compensation, except for (w) intercompany loansbenefits, travel advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising and employee loans in the ordinary course of business);
(j) merge or consolidate with or into any other Person, dissolve or liquidate or acquire any businesses or assets (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances other than acquisitions of inventory in the ordinary course of businessconsistent with past practice);
(hk) transfermake any change in any method of accounting other than those required by changes in Accounting Principles as contemplated by this Agreement;
(l) enter into a written contract that would be a Company Material Contract if entered into prior to the date hereof; provided that such restriction shall not apply with respect to contracts of the type described in Sections 3.6(a)(ii), license(xi) and (xii) entered into with respect to business of the Company conducted outside of the United States in the ordinary course consistent with past practice, sellprovided, lease that the Company shall consult with Buyer reasonably in advance of entering into any such contract.
(i) with respect to the business of the Company conducted in the United States, authorize or otherwise dispose make any capital expenditures (A) relating to information technology, in excess of $100,000, (B) relating to store maintenance, development or expansion in excess of $500,000, or (C) relating to all other matters, in excess of $250,000 and (ii) with respect to the business of the Company conducted outside of the United States, authorize or make any capital expenditures in excess of the amounts set forth in the Company’s fiscal 2011 capital expenditure budget as provided to Buyer;
(n) enter into any settlement or release with respect to any claim relating to the business of any 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 Group Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, but not, in each case excluding any transferindividual case, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more excess of its wholly-owned Subsidiaries€250,000;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, (ii) change any material method of reporting income or deductions for Tax accountingpurposes, (iii) settle or compromise any material Tax claim, audit or dispute, (iv) file any material amended Tax Return, (v) extend or waive the period of limitations for the payment or assessment of any material Tax of any Group Company, (vi) obtain any material ruling with respect to Taxes or enter into any material closing agreementagreement with any taxing authority, settle any material claim or assessment, (vii) make or surrender any right to claim for a material refund, offset or other reduction in Liability or consent to any extension or waiver refund of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;; or
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereofauthorize any, or implement a rights plancommit or agree to take any, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(s) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsforegoing actions.
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 or the Effective Time, except to the extent that Purchaser shall otherwise consent in writing, the Company agrees to cause the Company to conduct the business of the Company in the usual, regular and ordinary course (including the collection of its accounts receivable) in substantially the same manner as heretofore conducted, to pay the Debts and Taxes of the Company when due, 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, keep available the services of the present officers and Employees of the Company and preserve the relationships of the Company with customers, suppliers, distributors, licensors, licensees, and others having business dealings with them, all with the goal of preserving unimpaired the goodwill and ongoing businesses of the Company at the Effective Time. The Company shallshall promptly notify Purchaser of (x) any material event or occurrence or emergency not in the ordinary course of business of the Company or (y) any event or action that would reasonably be expected to materially decrease the value of the Company, and shall cause each of its Subsidiaries to, 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, except . Except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 4.1 of the Company Disclosure Letter or as required by applicable LawSchedule, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Purchaser from and after the date of this Agreement:
(a) amend cause or propose permit any modifications, amendments or changes to amend its certificate of incorporation or by-laws (or other comparable organizational documents)the Charter Documents;
(b) 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 split, combine or reclassifyreclassify any 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 Company Capital Stock, or directly or indirectly repurchase, redeem or otherwise acquireacquire any shares of Company Capital Stock (or options, warrants or offer to repurchaseother rights convertible into, redeem exercisable or otherwise acquire, any exchangeable for Company Securities or Company Subsidiary SecuritiesCapital Stock);
(c) declareissue, set aside grant, deliver or pay sell or authorize or propose the issuance, grant, delivery or sale of, or purchase or propose the purchase of, any dividend Company Capital Stock or distribution any securities convertible into, exercisable or exchangeable for, or subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating any of them to issue or purchase any such shares or other convertible securities;
(whether in cash, stock, property or otherwised) in respect ofalter, or enter into any Contract with respect commitment to the voting ofalter, its interest in any shares of its capital stock (other than dividends subsidiary, corporation, association, joint venture, partnership or distributions from its direct or indirect wholly-owned Subsidiaries to business entity in which the Company directly or other direct or indirect wholly-owned Subsidiaries of the Company);
(d) issue, sell, pledge, dispose of or encumber indirectly holds any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreementinterest;
(e) except as required by applicable Law undertake any expenditure, transaction or pursuant commitment exceeding $25,000 individually or $100,000 in the aggregate;
(f) acquire or agree to Section 3.03, (i) increase the compensation acquire or dispose or agree to dispose of directors, officers any assets or employees equity securities of the Company or any of its Subsidiaries, (ii) enter into any new business enterprise or amend in any material respect, any existing employment, severance, retention or change in control agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 as division thereof outside the result ordinary course 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employeeCompany’s annual base salary does not exceed $60,000business;
(g) acquire, by merger, consolidation, acquisition of stock or assetsenter into, or otherwiseagree to amend or modify, any business agreement, contract or Person commitment for the (i) sale, lease, license or division thereof or make transfer of any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among material Company Intellectual Property other than non-exclusive licenses of the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case Products in the ordinary course of business consistent with past practice, in each case excluding or (ii) purchase or license of any transfer, license, sale, lease or Intellectual Property of any Person other disposition in connection with any transaction between or among the Company and/or one or more of its whollythan non-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 exclusive licenses of the Company products, technology 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 services 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice practice, or (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding iii) change in pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into or royalties set or charged by the Company or in pricing or royalties set or charged by Persons who have licensed Intellectual Property to the Company;
(h) enter into any agreement, contract or commitment, or modification or amendment of its Subsidiaries such an agreement, with any customer, carrier, sales representative, original equipment manufacturer, manufacturing, distribution, reseller, value added reseller, or other Person for exclusive use or distribution of Company Products;
(i) incur any indebtedness (other than the obligation to reimburse employees for reasonable travel and business expenses or indebtedness incurred in connection with the purchase of goods and services, in the ordinary course of businessthe Company’s business consistent with past practices), amend the terms of any outstanding loan agreement, guarantee any indebtedness of any Person;
(j) except for advances to employees for reasonable travel and business expenses in the ordinary course of business consistent with past practices, make any loan to any Person or purchase debt securities of any Person or amend the terms of any outstanding loan agreement, or issue or sell any debt securities or guarantee any debt securities of any Person;
(k) sell, lease, license or otherwise dispose of any of the assets (whether tangible or intangible) or properties of the Company, including selling any accounts receivable of the Company, or creating any security interest in such assets or properties;
(l) waive or release any valuable right or claim of the Company;
(m) send any written communications (including electronic communications) to Employees regarding this Agreement or the transactions contemplated hereby;
(n) make any representations or issue any communications to Employees that are inconsistent with this Agreement or the transactions contemplated thereby, including any representations regarding offers of employment from Purchaser;
(o) enter into or amend any agreement of indemnification with any Employee or member of the Company’s Board of Directors;
(p) commence or settle any lawsuit, threat of any lawsuit or proceeding or other investigation by or against the Company or relating to any of their businesses, properties or assets;
(q) adopt or change accounting methods or practices (including any change in depreciation or amortization policies or rates) other than as required by GAAP;
(r) make or change any material election in respect of Taxes, adopt or change any accounting method in respect of Taxes, enter into any agreement with respect to Taxes, settle any claim or assessment in respect of Taxes, consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes or file any income, franchise, or other material Tax Return (including any amended Return) unless a copy of such Return has been delivered to Purchaser for review a reasonable time prior to filing and Purchaser has approved such Return;
(s) revalue any of its assets (whether tangible or intangible), including writing down the value of inventory or writing off notes or accounts receivable;
(t) promote, demote or otherwise change the compensation, employment status, title or other term or condition of employment of any Employee;
(u) adopt, amend or terminate any Company Employee Plan, except as contemplated by this Agreement or except as may be required by applicable Legal Requirements;
(v) increase the salary or other compensation payable or to become payable to any officer, director, employee or advisor, or make any declaration, payment or commitment or obligation of any kind for the payment (whether in cash or equity or otherwise) of a severance or change of control benefit, termination payment, special bonus, special remuneration or other additional salary or compensation (including equity based compensation);
(w) take any action to accelerate or otherwise modify the vesting schedule of any of the outstanding Company Options or Unvested Company Shares;
(x) terminate, amend or otherwise modify (or agree to do so), violate the terms of, or make any payments resulting from agreed upon early termination of, any of the Material Contracts set forth or described in the Disclosure Schedule; or
(sy) take, commit, or agree in writing or commit otherwise to do take, any of the foregoing. Nothing contained actions described in this Agreement shall give ParentSections 4.1(a) through 4.1(x) hereof, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, any other action that would (i) prevent the Company shall exercisefrom performing, consistent with or cause the terms Company not to perform, its covenants or agreements hereunder or (ii) cause or result in any of its respective representations and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationswarranties contained herein being untrue or incorrect.
Appears in 1 contract
Samples: Merger Agreement (Quantum Corp /De/)
Conduct of Business of the Company. The Except for matters set forth in Section 6.01 of the Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except as Disclosure Letter or otherwise expressly contemplated permitted or required by this Agreement or Agreement, as required by applicable Law or with the prior written consent of ParentParent (which consent shall not be unreasonably withheld, delayed or conditioned), from the Agreement Date to the earlier of the Offer Closing Time and the termination of this Agreement in accordance with its terms (the “Pre-Closing Period”), the Company shall, and shall cause the Company Subsidiaries to, conduct its business in the ordinary course of business, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to (x) preserve substantially intact its and its Subsidiaries’ present business organization, to (y) keep available the services of its and its Subsidiaries’ current present officers and employees, to employees and (z) preserve its and its Subsidiaries’ present relationships and goodwill with customers, suppliers, distributors, licensors, licensees licensees, contractors, partners and other Persons others having material business relationships dealings with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective TimeIn addition, except as otherwise expressly contemplated by this Agreement or as for matters set forth in Section 6.01 of the Company Disclosure Letter or as otherwise expressly permitted or required by this Agreement or required by applicable Law, during the Pre-Closing Period, the Company shall not, nor and shall it permit cause the Company Subsidiaries not to, do any of its Subsidiaries to, the following without the prior written consent of Parent (which consent shall not be unreasonably withheld withheld, delayed or delayedconditioned):
(a) amend (i) enter into any new material line of business or propose enter into any agreement, arrangement or commitment that materially limits or otherwise restricts the Company or its affiliates, including, following the Merger Closing, Parent and its affiliates (other than in the case of Parent and its affiliates, due to amend the operation of Parent’s or its certificate affiliates’ own Contracts), from time to time engaging or competing in any line of incorporation business or by-laws in any geographic area or (ii) otherwise enter into any agreements, arrangements or other comparable organizational documents)commitments imposing material restrictions on its assets, operations or business;
(b) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(ci) declare, set aside aside, establish a record date in respect of, accrue or pay any dividend dividends on, or distribution make any other distributions (whether in cash, stock, property equity securities or otherwiseproperty) in respect of, any of its capital stock, other than dividends and distributions of cash by a direct or enter into indirect wholly owned subsidiary of the Company to its parent, (ii) split, combine or reclassify any Contract 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 (iii) repurchase, redeem, offer to redeem or otherwise acquire, directly or indirectly any shares of capital stock of the Company or options, warrants, convertible or exchangeable securities, stock-based performance units or other rights to acquire any such shares of capital stock, except for (A) acquisitions of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options outstanding on the Agreement Date in order to pay the exercise price of Company Stock Options, (B) the withholding of shares of Company Common Stock to satisfy Tax obligations with respect to awards granted pursuant to the voting ofCompany Stock Plans outstanding on the Agreement Date and (C) the acquisition by the Company of Company Stock Options and Company PSUs, in each case, outstanding on the Agreement Date in connection with the forfeiture of such awards, in each case, in accordance with their terms;
(c) issue, grant, deliver, sell, authorize, pledge or otherwise encumber any shares of its capital stock (or options, warrants, convertible or exchangeable securities, stock-based performance units or other than dividends rights to acquire such shares, any Voting Company Debt or distributions from its direct or indirect wholly-owned Subsidiaries any other rights that give any person the right to receive any economic interest of a nature accruing to the holders of Company or other direct or indirect wholly-owned Subsidiaries of the Company);
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary SecuritiesCommon Stock, other than (i) the issuance of shares issuances of Company Common Stock upon the exercise of any Company Stock Option outstanding under Options or the settlement of Company Stock Plans as of the date of this Agreement PSUs, in each case, in accordance with their terms as outstanding and in place on the Agreement Date;
(d) amend its termscertificate of incorporation, bylaws or (ii) in accordance with the Stockholder Rights Agreementother comparable organizational documents;
(e) form any subsidiary or acquire or agree to acquire, directly or indirectly, in a single transaction or a series of related transactions, whether by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any assets outside of the ordinary course of business, any business or any corporation, partnership, limited liability company, joint venture, association or other business organization or division thereof or any other Person (other than the Company), if the aggregate amount of consideration paid or transferred by the Company or any Company Subsidiary would exceed $50,000;
(f) except as required by applicable Law or pursuant to Section 3.03the terms of any Company Benefit Plan or Company Benefit Agreement, in each case, as in effect on the Agreement Date, (i) adopt, enter into, establish, terminate, amend or modify any Company Benefit Plan or Company Benefit Agreement (or plan or arrangement that would be a Company Benefit Plan or Company Benefit Agreement if in effect on the Agreement Date), (ii) grant to any director, employee or individual service provider of the Company or any Company Subsidiary any increase in base or other compensation, (iii) grant to any director, employee or individual service provider of the compensation Company or any Company Subsidiary any increase in severance or termination pay, (iv) pay or award, or commit to pay or award, any bonuses or incentive compensation, (v) enter into any employment, retention, consulting, change in control, severance, or termination agreement with any director, employee or individual service provider of directorsthe Company or any Company Subsidiary, officers (vi) take any action to accelerate any rights or benefits under any Company Benefit Plan or Company Benefit Agreement, or the funding of any payments or benefits under any Company Benefit Plan or Company Benefit Agreement, (vii) hire or terminate (other than for cause) the employment or service of any employee or individual service provider or (viii) negotiate, modify, extend, terminate, or enter into any Labor Agreement or recognize or certify any labor union, works council, or other labor organization or group of employees as the bargaining representative for any employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000Subsidiary;
(g) acquiremake any change in accounting methods, principles or practices, except as may be required (i) by mergerGAAP (or any authoritative interpretation thereof), consolidationincluding pursuant to standards, acquisition guidelines and interpretations of stock the Financial Accounting Standards Board or assetsany similar organization or (ii) by Law, including Regulation S-X promulgated under the Securities Act, in each case, as agreed to by the Company’s independent public accountants;
(h) sell, lease (as lessor), license or otherwise transfer (including through any “spin-off”), or otherwisepledge, encumber or otherwise subject to any Lien (other than a Permitted Lien), any business properties or Person assets (other than Intellectual Property) except (i) sales or division thereof other dispositions of inventory and excess or make any loans, advances obsolete properties or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising assets in the ordinary course of business, (yii) advances pursuant to employees for expenses reimbursable under Contracts to which the Company and/or its Subsidiaries’ business expense reimbursement policyis a party made available to Parent and in effect prior to the Agreement Date or (iii) properties or assets having a fair market value of less than $50,000 in the aggregate;
(i) sell, assign, license or otherwise transfer any Company Intellectual Property, except for (i) licenses (including sublicenses) to Intellectual Property granted in the ordinary course of business, (ii) pursuant to Standard IP Contracts, (iii) pursuant to Contracts to which the Company or any Company Subsidiary is a party, made available to Parent and in effect prior to the Agreement Date or (ziv) advances abandonment or other disposition of any Company Registered Intellectual Property that is at the end of the applicable statutory term, in the ordinary course of prosecution or otherwise in the ordinary course of business;
(hj) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt incur or effect a plan materially modify the terms of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(jincluding by extending the maturity date thereof) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls warrants or other rights to acquire any debt securities of the Company or any of its SubsidiariesCompany, guarantee any debt securities of another Person, enter into any “keep well” or other Contract agreement to maintain any financial statement condition of any other another Person (other than any wholly-owned Subsidiary of it) or enter into any arrangement having the economic effect of any of the foregoingforegoing or (ii) make any loans, advances or capital contributions to, or incur investments in, any Liens other than Permitted Liens in connection with the foregoingPerson, other than to or in (A) the financing Company, (B) any acquisition not in violation of ordinary course trade payables consistent with past practice Section 6.01(e) or (C) any person pursuant to an existing financing facility, except for intercompany loans entered into in between or among any advancement obligations under the Company and/or any of its wholly-owned SubsidiariesCharter, Company Bylaws or indemnification agreements as in effect on or prior to the Agreement Date;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; providedin accordance with the Company’s capital expenditure budget made available to Parent, that neither the Company nor any of its Subsidiaries shall settle make or agree to settle make any Legal Action which settlement involves a conduct remedy capital expenditure or injunctive or similar relief or has a material restrictive impact on expenditures that in the business aggregate are in excess of the amount set forth in Section 6.01(k) of the Company or any Affiliate thereofDisclosure Letter;
(l) make pay, discharge, settle, compromise or satisfy (i) any material change pending or threatened claims, liabilities or obligations relating to a Proceeding (absolute, accrued, asserted or unasserted, contingent or otherwise), including any Proceeding initiated by the Company, other than any such payment, discharge, settlement, compromise or satisfaction of a claim solely for money damages in the ordinary course of business in an amount not to exceed $50,000 per payment (assuming the payment in full or all future fixed or contingent payments), discharge, settlement, compromise or satisfaction or $200,000 in the aggregate for all such payments, discharges, settlements, compromises or satisfactions or (ii) any method of financial accounting principles litigation, arbitration, proceeding or practices, except for any change required dispute that relates to the Transactions (which shall be governed by a change in GAAP or applicable LawSection 7.08 hereof);
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any annual Tax accounting period or adopt or change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreementagreement within the meaning of Section 7121 of the Code (or any similar provision of state, local or foreign Law), or settle or compromise any material claim Tax liability or assessmentrefund;
(n) amend, surrender cancel or terminate any right to claim material insurance policy naming the Company or any Company Subsidiary as an insured, a material refundbeneficiary or a loss payable payee without obtaining comparable substitute insurance coverage;
(o) adopt a plan or agreement of complete or partial liquidation or dissolution, offset merger, consolidation, restructuring, recapitalization or other reduction in Liability or consent to any extension or waiver of reorganization (other than the limitations period applicable to any material claim or assessment, in each case, with respect to TaxesMerger);
(p) (i) abandon, cancel, fail to maintain in full force and effect renew or permit to lapse (A) any material insurance policies covering Company Registered Intellectual Property or (B) any material registered Intellectual Property to the extent that the Company has the right to take or cause to be taken such action pursuant to the terms of the applicable Contract under which such Intellectual Property is licensed to the Company (unless the Company or its Subsidiaries and its any Company Subsidiary has an obligation to do so), (ii) fail to renew (to the extent renewable at the option of the Company) or their propertiesterminate any Contract under which material Intellectual Property is licensed to the Company, assets and businesses in a form and amount consistent with past practice;
(qiii) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive disclose to any material right under, any Material Contract or Permitthird party, other than Contracts entered into with customers under a confidentiality agreement or other legally binding confidentiality undertaking, any Trade Secret of the Company that is included in the ordinary course Company Intellectual Property in a way that results in loss of business consistent with past practice (it being understood thatmaterial Trade Secret protection thereon, except for the purposes any such disclosures made as a result of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts publication of similar size and scope previously entered into a Patent application filed by the Company or in connection with any of its Subsidiaries required regulatory filing or (iv) sell, transfer, license or otherwise encumber any Company Intellectual Property, other than Permitted Liens (including non-exclusive licenses ancillary to research, development, manufacture, clinical testing, sale, distribution and commercialization activities relating to products or services entered into in the ordinary course of business);
(q) except in the ordinary course of business or in connection with any transaction to the extent specifically permitted by any other subclause of this Section 6.01, enter into, terminate or modify in any material respect, or expressly release any material rights under, any Material Contract or any Contract that, if existing on the Agreement Date, would have been a Material Contract;
(r) participate in any scheduled meetings or scheduled teleconferences with, or correspond in writing, communicate or consult with the FDA or any similar Regulatory Authority (including, for purposes of this Section 6.01(r) and for the avoidance of doubt, the U.S. Nuclear Regulatory Commission) without providing Parent (whenever feasible and to the extent permitted under applicable Law, and excluding routine administrative communications, or immaterial communications) with prior written notice and, within 24 hours from the time such written notice is delivered, the opportunity to consult with the Company with respect to such correspondence, communication or consultation, in each case to the extent permitted by applicable Law;
(s) enter into a research or collaboration arrangement that contemplates payments by or to the Company or any Company Subsidiary in excess of $50,000 in any twelve (12) month period;
(t) (i) commence any clinical study of which Parent has not been informed prior to the Agreement Date, (ii) unless mandated by any Regulatory Authority, discontinue, terminate or suspend any ongoing clinical study or (iii) discontinue, terminate or suspend any ongoing preclinical study without first consulting with Parent in good faith; or
(su) authorize, commit or agree or commit to do take any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsforegoing actions.
Appears in 1 contract
Conduct of Business of the Company. The Except as contemplated by this Agreement, as consented to by Parent or as described in Section 4.1 of the Company shall, and shall cause each of its Subsidiaries toDisclosure Schedule, during the period from the date of this Agreement until hereof to the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent Company will, and will cause each of Parentits subsidiaries to, conduct its business operations in the ordinary course of business, business consistent with past practices and, to the extent consistent therewith, with no less diligence and effort than would be applied in the Company shallabsence of this Agreement, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts seek to preserve substantially intact its and its Subsidiaries’ current business organizationorganizations, to keep available the services of its and its Subsidiaries’ current officers and directors, officers, employees, to consultants and independent contractors and preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees suppliers and other Persons others having business relationships dealings with it. Without limiting the generality of the foregoing, between the date of except as otherwise expressly provided in this Agreement and or as described in Section 4.1 of the Company Disclosure Schedule, prior to the Effective Time, except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of neither the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries tosubsidiaries shall, without the prior written consent of Parent (Parent, which consent shall not be unreasonably withheld or delayed)::
(a) amend its Articles of Incorporation or propose to amend its certificate of incorporation or by-laws Bylaws (or other comparable organizational similar governing documents);
(b) splitauthorize for issuance, combine issue, sell, deliver or reclassifyagree or commit to issue, repurchasesell or deliver (whether through the issuance or granting of options, redeem warrants, commitments, subscriptions, rights to purchase or otherwise acquireotherwise) any stock of any class or any other securities or equity equivalents (including any stock options or stock appreciation rights) or convertible or exchangeable securities, except for (i) the issuance and sale of Shares upon the exercise of Company Stock Options outstanding on the date hereof or offer (ii) the grant of Company Stock Options to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securitiesnewly hired employees in the ordinary course of business consistent with past practices;
(c) split, combine or reclassify any shares of its capital stock, declare, set aside or pay any dividend dividend, profit sharing distribution or other distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect ofof its capital stock, make any other actual, constructive or enter into any Contract with deemed distribution in respect to the voting of, any shares of its capital stock or otherwise make or undertake to make any payments to Shareholders in their capacities as such, or redeem or otherwise acquire any of its outstanding securities (other than dividends (i) the repurchase of Restricted Company Shares and cancellation of Company Stock Options following termination of employment with or distributions from its direct or indirect wholly-owned Subsidiaries provision of services to the Company or other direct or indirect wholly-owned Subsidiaries of and (ii) the CompanyNvelo Distribution);
(d) issueexcept for the Merger, sellthe Spinoff and the other transactions contemplated hereby and by the other Transaction Agreements, pledgeadopt a plan of complete or partial liquidation, dispose of dissolution, merger, consolidation, restructuring, recapitalization or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees reorganization of the Company or any of its Subsidiariessubsidiaries, or otherwise alter the Company’s corporate structure or the corporate structure of any subsidiary or form any subsidiary;
(e) (i) incur, assume or forgive any long-term or short-term loan or issue any debt securities, except for borrowings under existing lines of credit in the ordinary course of business consistent with past practices; (ii) enter into any new assume, guarantee, endorse or amend in any material respectotherwise become liable or responsible (whether directly, any existing employment, severance, retention contingently or change in control agreement with any of its past or present directors, officers or employees, (iiiotherwise) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 as for the result of the termination or resignation obligations of any officer or employee, or (iv) establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employeeother person, except for the replacement obligations of any current employee whose employment with subsidiaries of the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
incurred in the ordinary course of business consistent with past practice; (giii) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for other person (w) intercompany loans, advances other than customary loans or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease practices); (iv) pledge or other disposition in connection with any transaction between or among the Company and/or one or more otherwise encumber shares of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 capital stock of the Company or any of its Subsidiariessubsidiaries; or (v) mortgage or pledge any of its material assets or properties, guarantee tangible or intangible, or create or allow the creation or maintenance of any debt securities material Lien thereupon;
(f) except as may be required by applicable law or this Agreement, enter into, adopt, amend or terminate any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, pension, retirement, deferred compensation, employment, health, life, or disability insurance, dependent care, severance or other employee benefit plan, agreement, trust, fund or other arrangement for the benefit or welfare of another Personany director, officer or employee in any manner, or increase in any manner the compensation or fringe benefits of any director, officer, employee or consultant or pay any benefit not required by any plan and arrangement as in effect on the date hereof (including the granting of stock appreciation rights or performance units) or fail to make full and timely payment of all amounts required to be contributed or paid as expenses under the terms of each Employee Plan and applicable law;
(g) (i) acquire any corporation, partnership, limited liability company, other business organization or division thereof, (ii) acquire, sell, lease, license or dispose of any assets or property in any single transaction or series of related transactions, other than (A) in the ordinary course of business consistent with past practices, (B) to the extent expressly required by Material Contracts listed in Section 2.15 of the Company Disclosure Schedule in force on the date of this Agreement or (C) dispositions of obsolete tangible assets having a de minimis value, (iii) enter into any exclusive license, distribution, marketing, sales or other agreement, (iv) enter into a “keep welldevelopment services” or other Contract to maintain similar agreement, (v) enter into any financial statement condition agreement with “most favored customer” pricing, or (vi) acquire, sell, lease, license, transfer or otherwise dispose of any Intellectual Property Rights other Person than non-exclusive licenses or sales of its products in the ordinary course of business consistent with past practices and other than the transfer of the Transferred Assets in the Spinoff;
(h) except as may be required as a result of a change in applicable law or in United States generally accepted accounting principles, change any of the accounting principles, practices or methods used by it;
(i) revalue in any material respect any of its assets or properties, 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 practices;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, limited liability company, partnership or other person or division thereof or any equity interest therein; (ii) enter into any Contract that would constitute a Material Contract, Lease Document or Interested Party Contract, taken as a whole (other than agreements for the license or sale of its products and services in the ordinary course of business consistent with past practices and other than the transfer of the Transferred Assets in the Spinoff); (iii) amend, modify or waive any wholly-owned Subsidiary material right under any Material Contract of it) the Company or enter into any arrangement having the economic effect of any of the foregoingits subsidiaries, or incur amend or modify, or assume any Liens other than Permitted Liens new, material obligation, in connection with the foregoingeach case, other than in the financing of ordinary course trade payables of business consistent with past practice practices; (iv) modify its standard warranty terms for its products or pursuant services or amend or modify any product or service warranties in effect as of the date hereof in any material manner that is adverse to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or or any of its wholly-owned Subsidiariessubsidiaries; or (v) authorize any new capital expenditure or expenditures that exceed Two Hundred Fifty Thousand Dollars ($250,000) individually or in the aggregate;
(k) institute any, commence any litigation or binding dispute resolution process or settle or compromise any pending or threatenedthreatened suit, Legal Actions involving injunctive relief action or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofclaim;
(l) make commence any material change software or hardware development project or terminate any material software or hardware development project that is currently ongoing, in any method either case except pursuant to the terms of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Lawexisting contracts with customers;
(m) enter into accelerate, or permit or otherwise enable the acceleration of, the vesting of any material agreementCompany Stock Option or Restricted Company Shares in connection with, agreement in principleor as a result of the consummation of, letter this Agreement, the Merger, any of intentthe transactions contemplated hereby or by the other Transaction Agreements, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or allianceotherwise;
(n) authorizeallow any Insurance Policy to be amended or terminated, or make any commitment to expire, without replacing such policy with respect toa policy providing at least equal coverage, any capital expenditure, except as contemplated insuring comparable risks and issued by an insurance company financially comparable to the Company’s existing fiscal year 2012 Capital Budgetprior insurance company;
(o) make, change modify or revoke rescind any material Tax electionelection relating to Taxes of the Company or any of its subsidiaries (other than elections made in the ordinary course of business consistent with past practices of the Company), adopt or change any material accounting method in respect of Taxes, commence any Tax accountingClaim, file settle or compromise any material amended Tax Returnliability of the Company or any of its subsidiaries, enter into any material closing or other agreement with any Governmental Entity with respect to Taxes, enter into any Tax allocation agreement, settle any material claim Tax sharing agreement, Tax indemnity agreement or assessment, surrender any right to claim otherwise enter into a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, Contract with respect to Taxes;
(p) fail file or cause to maintain in full force and effect material insurance policies covering be filed any amended Tax Return with respect to the Company or any of its Subsidiaries and subsidiaries, file or cause to be filed any claim for refund of Taxes paid by or on behalf of the Company or any of its subsidiaries, agree to an extension or their propertieswaiver of a statute of limitations with respect to any claim, assets and businesses in a form and amount consistent assessment or determination of Taxes or grant any power of attorney with past practicerespect to Taxes;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any distribution, sponsorship, advertising or other similar Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into may not be canceled without penalty by the Company or any of its Subsidiaries subsidiaries upon notice of 30 days or less or which provide for payments by or to the Company or any of its subsidiaries in an amount in excess of Two Hundred Fifty Thousand Dollars ($250,000) over the term of the agreement;
(i) accelerate the collection of any accounts receivable, (ii) delay the payment of any account payable, or (iii) take any other action outside the ordinary course of businessbusiness or inconsistent with past practices with the intent of avoiding a reduction or triggering an increase in the Merger Consideration pursuant to Section 1.12 (it being understood that any estimated Tax payments shall be made without taking into account the effect of the transactions described in this Agreement); or
(s) take or agree in writing or commit otherwise to do take any of the foregoing. Nothing contained actions described in Sections 4.1(a) through 4.1(r); provided that nothing in this Agreement Section 4.1 shall give Parentprohibit the Company from incurring and paying the fees, directly or indirectlycosts and expenses set forth in Schedule IX, the right to control or direct the Company’s or its Subsidiaries’ operations prior up to the Effective Time. Prior to maximum amounts set forth therein, or within the Effective Timesame nature and categories of expenses as are listed on Schedule IX, provided that any amount in excess of the Company maximum amounts set forth for each item in Schedule IX shall exercise, consistent with be deducted from the terms Merger Consideration as part of the Cash Adjustment Amount and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsspecifically listed in the Cash Statement as provided in Section 1.12.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to(a) Unless otherwise consented to in writing by Parent, during the period from the date of this Agreement and continuing until the earlier of (x) the termination of this Agreement and (y) the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct Company shall carry on its business and that of its Subsidiaries substantially in the usual, regular and ordinary course and consistent with past practice, pay the Liabilities and Taxes of business, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries toconsistent with the Company’s past practices (and in any event when due), use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organizationpay or perform all other obligations when due consistent with the Company’s past practices (other than Liabilities, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees Taxes and other Persons having business relationships with it. obligations, if any, being contested in good faith through appropriate proceedings).
(b) Without limiting the generality of the foregoing, between except as expressly permitted by this Agreement (excluding the provisions of Section 4.1(a)), 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 otherwise expressly contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure Letter or as required by applicable LawSchedule, the Company shall notnot (and shall cause each of its Subsidiaries not to) do, nor shall it cause or permit any of its Subsidiaries tothe following, without the prior written consent of Parent (Parent, which consent shall not be unreasonably withheld withheld, delayed or delayed):conditioned:
(ai) amend cause or propose permit any amendments to amend its certificate of incorporation or by-laws bylaws (or other comparable similar organizational documents);
(bii) split, combine or reclassify, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside declare or pay any dividend on or make any other distribution (whether in cash, stock or property) in respect of any of its capital stock, property or otherwise) 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 enter into any Contract with respect to the voting ofin substitution for shares of its capital stock, or repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock (other than dividends or distributions except from its direct or indirect wholly-owned Subsidiaries former employees, directors and consultants in accordance with agreements in effect on the date hereof providing for the repurchase of shares at cost in connection with any termination of service to the Company or other direct or indirect wholly-owned Subsidiaries of the Company)it;
(diii) issueenter into any Material Contract, sellor violate, pledge, dispose amend or otherwise modify or waive any of or encumber the terms of any Company Securities or Company Subsidiary Securitiesof its Material Contracts, other than (iA) entry into Material Contracts, or amendments, modifications and waivers, in each case, in the ordinary course of business consistent with past practice and not otherwise prohibited hereunder, and (B) the acceleration of the exercisability or vesting of any Non-Continuing Options;
(iv) issue, deliver or sell or authorize or propose the issuance, delivery or sale of, any shares of Company Capital Stock or capital stock of a Company Subsidiary (however denominated) or securities convertible into, or subscriptions, rights, warrants or options to acquire, or other Contracts of any character obligating it to issue any such shares or other convertible securities or other Equity Equivalents or rights to acquire, other than the issuance of shares of Company Common Stock upon pursuant to the exercise of any Company Stock Option Options outstanding under Company Stock Plans as of the date hereof and grants of Company Options to employees and service providers hired after the date of this Agreement in accordance with its termsAgreement, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03consultation of Parent, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of businessbusiness consistent with past practice;
(v) dispose of, license or transfer to any Person any rights to any Intellectual Property, other than (yA) advances to employees for expenses reimbursable under non-exclusive licenses in connection with the sale of Company and/or its Subsidiaries’ business expense reimbursement policyproducts, and (zB) advances in the ordinary course of business;
(h) transfer, license, sell, lease exclusive licenses for software and firmware solely designed or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, modified to operate with a particular customer’s technology; in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(ivi) adopt sell, lease, license or effect a plan otherwise dispose of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) incur encumber 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 Assets and Properties of the Company or any of its Subsidiaries, except as permitted under Section 4.1(b)(v) or for sales of products (and related non-exclusive licenses) in the ordinary course consistent with past practice;
(vii) incur any Indebtedness, including guaranteeing any Indebtedness, or issue or sell any debt securities, or guarantee any debt securities of another Personothers, other than Interim Company Indebtedness;
(viii) 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, or incur any Liens other than Permitted Liens in connection operating lease with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount a value exceeding $25,000 individually 20,000 in any individual case or $100,000 in the aggregate, other than or lease for 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereofreal property;
(lix) make pay, discharge or satisfy any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessmentLiability (absolute, surrender any right to claim a material refundaccrued, offset asserted or unasserted, contingent or otherwise) arising other reduction than in Liability or consent to any extension or waiver the ordinary course of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount business consistent with past practice;
(q) adopt, modify from other than the form existing on payment, discharge or satisfaction of liabilities reflected or reserved against in the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as balance sheet contained in the Unaudited 2009 Financial Statements and reasonable expenses incurred in connection with the transactions contemplated by this Agreement;
(rx) enter intomake any capital expenditures, terminatecapital additions or capital improvements, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers except in the ordinary course of business consistent with past practice and, individually or in the aggregate, in an amount not exceeding $500,000;
(it being understood thatxi) reduce the amount of any insurance coverage provided by existing insurance policies or terminate any such policies;
(xii) terminate or waive any right of substantial value other than the acceleration of the exercisability or vesting of any Non-Continuing Options;
(xiii) (A) adopt or amend any employee benefit plan or stock purchase or option plan, for except amendments required by applicable Law, (B) hire any new director level or officer level consultant or employee, (C) grant or pay any special bonus or special remuneration to any employee, consultant or director other than payments pursuant to cash bonus arrangements set forth on the purposes Company Disclosure Schedule and entered into by the Company or one of this subsectionits Subsidiaries prior to the date hereof, “or (D) increase the salaries, wage rates or compensation of any employee or consultant, except in the ordinary course of business consistent with past practice” shall not include entering ;
(xiv) acquire or agree to acquire by merging or consolidating with, or by purchasing substantial Assets and Properties of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof;
(xv) make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Return or any amendment to a Tax Return other than the Company’s or, if applicable, a Company Subsidiary’s corporate Tax Return for the year ended December 31, 2009, enter into any closing agreement, settle any claim or assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, except in the ordinary course of business consistent with past practice;
(xvi) loan or advance any amount to, or enter into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that arewith, or otherwise make any payments to any stockholder of the Company, or any of their respective Affiliates or, with the exception of payments of salary or expense advancement in the ordinary course of business, consistent with past practice, in their capacity as employees or directors of the aggregateCompany, substantially inconsistent with including any officer thereof; or
(xvii) take or agree in writing or otherwise to take, (A) any of the terms and conditions found actions described in this Section 4.1(b), (B) any willful or intentional action that would result in a material breach of any of the Company’s representations or warranties contained in this Agreement, or (C) any other Contracts of similar size and scope previously entered into by action that would prevent or is reasonably likely to prevent the Company or any of its Subsidiaries in from performing, or cause or is reasonably likely to cause the ordinary course of business); or
(s) agree Company or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior , not to perform, its covenants and agreements hereunder. For the avoidance of doubt, nothing herein shall limit the rights and obligations of the parties under any agreement relating to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsParent Loan.
Appears in 1 contract
Samples: Merger Agreement (Emulex Corp /De/)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement until the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of ParentParent (which consent shall not be unreasonably withheld, conditioned, or delayed), to use its commercially reasonable efforts to conduct its business in the ordinary course of businessbusiness consistent with past practice, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries toto conduct its business in the ordinary course of business in all material respects, to use its commercially reasonable efforts to preserve substantially intact its and its Subsidiaries’ business organization, assets and properties, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees licensees, and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or Agreement, as set forth in Section 6.01 5.01 of the Company Disclosure Letter Schedule, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld withheld, conditioned, or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents)Charter Documents;
(b) (i) split, combine combine, or reclassifyreclassify any Equity Securities in the Company or any of its Subsidiaries, (ii) repurchase, redeem redeem, or otherwise acquire, or offer to repurchase, redeem redeem, or otherwise acquire, any Equity Securities in the Company Securities or Company Subsidiary Securities;
any of its Subsidiaries, or (ciii) declare, set aside aside, or pay any dividend or distribution (whether in cash, stock, property property, or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock stock; except for (other than A) the declaration and payment of quarterly cash dividends or distributions with respect to the Company Common Stock not to exceed $0.1525 per share, with record dates and payment dates consistent with the Company’s past dividend practice, (B) the declaration and payment of dividends from its direct or indirect wholly-owned Subsidiaries a Company Subsidiary to the Company or other direct or indirect to another wholly-owned Subsidiaries Company Subsidiary and (C) a special cash dividend on Company Common Stock with respect to the quarter in which the Effective Time occurs with a record date on or prior to the Effective Time, which does not exceed an amount equal to $0.1525 per share multiplied by a fraction, the numerator of which is the Company)number of days in such quarter prior to the Effective Time, and the denominator of which is the total number of days in such fiscal quarter;
(dc) issue, sell, pledge, dispose of of, or encumber any Equity Securities in the Company Securities or Company Subsidiary Securitiesany of its Subsidiaries, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option Equity Award outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) the issuance of Series A Stock or Series C Stock for the purposes of making capital expenditures in accordance with the Stockholder Rights Agreementordinary course of business;
(ed) except as required by applicable Law or pursuant to Section 3.03by any Company Employee Plan or Contract in effect as of the date of this Agreement, (i) increase the compensation of directors, officers payable or employees of that could become payable by the Company or any of its SubsidiariesSubsidiaries to directors, officers, consultants or employees, other than increases in compensation made to consultants and non-officer employees in the ordinary course of business consistent with past practice, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except in connection with respect to employees with a base salary of less than $60,000 the Company’s annual or quarterly compensation review cycle or as the result of the termination or resignation of any officer or employee, (iii) terminate the employment of any officer, other than in the ordinary course of business consistent with past practice or for cause, (iv) establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any Company Employee PlansPlans or any plan, agreement, program, policy, trust, fund, or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this 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, (fv) loan or advance any money or other property to any director, officer, or employee, (vi) grant to any director, officer, or employee any increase in change-in-control, severance, retention or termination pay, or enter into or amend any change-in-control, severance, retention or termination agreement with any director, officer, or employee of the Company or its Subsidiaries, (vii) establish, adopt, enter into, amend in any material respect or terminate any collective bargaining agreement or Company Employee Plan (or any plan or agreement that would be a Company Employee Plan if in existence on the date hereof), (viii) take any action to accelerate the time of vesting, funding or payment of any compensation or benefits under any Company Employee Plan, or (ix) hire any officer or employee, except for the replacement of any current employee whose employment employees with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s aggregate annual base salary does not exceed above $60,000;100,000.
(ge) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances advances, or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into Person in between or among the Company and/or any excess of its wholly-owned Subsidiaries, (x) trade payables arising $100,000 in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of businessaggregate;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(jf) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, in excess of $100,000, other than in the ordinary course of business for the purposes of refinancing existing indebtedness or for capital expenditures;
(g) issue or sell any debt securities or options, warrants, calls 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiariespractice;
(kh) institute anyother than in the ordinary course of business, (i) enter into or amend or modify in any material respect, or settle consent to the termination of (other than at its stated expiry date), any Company Material Contract or any Lease with respect to material Real Estate or any other Contract or Lease that, if in effect as of the date hereof would constitute a Company Material Contract or Lease with respect to material Real Estate hereunder, (ii) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404, (iii) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor or materially accelerate, or materially alter practices and policies relating to, the rate of collection of accounts receivable or payment of accounts payable, or (iv) waive, release, grant, encumber or transfer any right with a value in excess of $100,000;
(i) institute, settle, or compromise any pending or threatened, Legal Actions Action involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than (i) 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 (ii) the settlement of claims, liabilities, or obligations reserved against on the Company Balance Sheet; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business Company’s or any of its Subsidiaries’ respective businesses;
(j) (i) settle or compromise any material Tax claim, audit, or assessment for an amount materially in excess of the amount reserved or accrued on the Company Balance Sheet (or most recent consolidated balance sheet included in the Company SEC Documents), (ii) make or change any material Tax election, change any annual Tax accounting period, or adopt or change any method of Tax accounting, (iii) amend any material Tax Returns or file claims for material Tax refunds, or (iv) enter into any material closing agreement, surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or its Subsidiaries;
(k) abandon, allow to lapse, sell, assign, transfer, grant any Affiliate thereofsecurity interest in otherwise encumber or dispose of any material Company IP, or grant any right or license to any material Company IP other than pursuant to non-exclusive licenses entered into in the ordinary course of business consistent with past practice;
(l) make any material change in any method of financial accounting methods, principles or practices, except for any change to the extent as may have been required by a change in applicable Law or GAAP or applicable Law;by any Governmental Entity (including the SEC or the Public Company Accounting Oversight Board) ;
(m) enter into any material agreementadopt a plan of complete or partial liquidation or resolutions providing for or authorizing such liquidation or a dissolution, agreement in principlemerger, letter of intentconsolidation, memorandum of understanding restructuring, recapitalization or similar Contract with respect to any joint venture, strategic partnership or allianceother reorganization;
(n) authorizemake, or make agree or commit to make, any commitment capital expenditures in excess of $250,000 in the aggregate;
(o) enter into any new line of business;
(p) terminate or modify in any material respect, or fail to exercise renewal rights with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business)policy; or
(sq) agree or commit to do any of the foregoing. Nothing ; provided, however, that nothing contained in this Agreement shall herein is intended to give Parent, directly or indirectly, the right to control or direct the Company’s operations of the Company or any of its Subsidiaries’ operations Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Merger Agreement (Corning Natural Gas Holding Corp)
Conduct of Business of the Company. The Except as expressly permitted by this Agreement, as set forth on Section 5.2 of the Company shall, and shall cause each of its Subsidiaries toDisclosure Schedule or as required by applicable Law, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business unless Parent otherwise agrees in the ordinary course of business, and, to the extent consistent therewithwriting, the Company shall, and shall cause each of its Subsidiaries to, (x) conduct its business in the ordinary course consistent with past practice, (y) comply in all material respects with all applicable Laws and the requirements of all Material Contracts and Permits and make all voluntary disclosures deemed appropriate to Governmental Authorities and (z) use its commercially reasonable efforts efforts, under the circumstances, to (i) maintain and preserve substantially intact its business organization and its Subsidiaries’ the goodwill of those having significant business organizationrelationships with it, to keep available (ii) retain the services of its present officers and key employees, and (iii) keep in full force and effect all material insurance policies maintained by the Company and its Subsidiaries’ current officers and employees, other than changes to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with itsuch policies made in the ordinary course of business. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated permitted by this Agreement or Agreement, as set forth in on Section 6.01 5.2 of the Company Disclosure Letter Schedule or as required by applicable Law, during the period from the date of this Agreement to the Effective Time, the Company shall not, nor and shall it not permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Parent:
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(bi) splitissue, combine or reclassifysell, repurchasegrant, redeem dispose of, pledge or otherwise acquireencumber any shares of its capital stock, voting securities or equity interests, or offer any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to repurchase, redeem or otherwise acquire, subscribe for any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, shares of its capital stock, property voting securities or otherwise) in respect ofequity interests, or enter into any Contract with respect rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock, voting securities or equity interests or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the voting ofright to subscribe for, any shares of its capital stock (other than dividends stock, voting securities or distributions from its direct or indirect wholly-owned Subsidiaries to equity interests, provided that the Company or other direct or indirect wholly-owned Subsidiaries of the Company);
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of may issue shares of Company Common Stock upon the exercise of any Company Stock Option Options that are outstanding under Company Stock Plans as of on the date of this Agreement in accordance with its terms, or (ii) and in accordance with the Stockholder Rights Agreement;
terms thereof; (eii) except redeem, purchase or otherwise acquire any of its outstanding shares of capital stock, voting securities or equity interests, or any rights, warrants, options, calls, commitments or any other agreements of any character to acquire any shares of its capital stock, voting securities or equity interests; (iii) declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock or otherwise make any payments to its stockholders in their capacity as required such (other than dividends by applicable Law a direct or pursuant indirect wholly owned Subsidiary of the Company to Section 3.03its parent); (iv) split, combine, subdivide or reclassify any shares of its capital stock; or (iv) increase amend (including by reducing an exercise price or extending a term) or waive any of its rights under any provision of the compensation of directorsCompany Stock Plans, officers the ESPP or employees any agreement evidencing any outstanding stock option or other right to acquire capital stock of the Company or any of its Subsidiaries, (ii) enter into restricted stock purchase agreement or any new similar or amend in any material respect, any existing employment, severance, retention or change in control agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employeesrelated contract, except with respect such vesting as required pursuant to employees with a base salary employment agreements in effect on the date of less than $60,000 as this Agreement, and except that the result Company shall amend the Company Stock Plans, the ESPP or any agreements evidencing the grant of the termination or resignation of any officer or employee, or (iv) establish, adopt, enter into, amend, terminate, exercise any discretion under, Options or take any such other action to accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Planthe extent contemplated by Section 2.3 hereof;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(jb) incur or assume any indebtedness for borrowed money or guarantee any such indebtedness of another Person, for borrowed money (or enter into a "keep well" or similar agreement) or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee other than borrowings from the Company by a direct or indirect wholly owned Subsidiary of the Company or borrowings by the Company or a direct or indirect wholly owned Subsidiary of the Company from a direct or indirect wholly owned Subsidiary of the Company;
(c) sell, transfer, lease, license, mortgage, encumber, abandon or otherwise dispose of or voluntarily permit to become subject to any debt Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) any of its material properties or assets (including securities of another Subsidiaries) to any Person, except (A) sales of products and licenses in the ordinary course of business consistent with past practice, (B) pursuant to Contracts in force at the date of this Agreement and listed on Section 5.2(c) of the Company Disclosure Schedule, complete and correct copies of which have been made available to Parent, (C) dispositions of excess equipment or obsolete or worthless assets or (D) sales of properties or assets (excluding securities of Subsidiaries) in an amount not in excess of $50,000 in the aggregate;
(d) assign, sell, abandon, exclusively license or otherwise dispose of any of its material Intellectual Property;
(e) make any capital expenditures, except in the ordinary course of business consistent with past practice;
(f) make any acquisition (by purchase of securities or assets, merger or consolidation, or otherwise) of any other Person, business or division;
(g) make any investment (by contribution to capital, property transfers, purchase of securities or otherwise) in, or loan or advance (other than travel and similar advances to its employees in the ordinary course of business consistent with past practice) to, any Person other than a direct or indirect wholly owned Subsidiary of the Company and other than such investments, loans or advances required by Contracts existing on the date of this Agreement set forth on Section 5.2(f) of the Company Disclosure Schedule;
(h) other than in the ordinary course of business, enter into, terminate or amend (other than immaterial amendments) any Material Contract;
(i) increase in any manner the compensation of any of its directors, officers or employees or enter into, establish, amend, modify or terminate any employment, consulting, retention, change in control, collective bargaining, bonus or other incentive compensation, profit sharing, health or other welfare, stock option or other equity (or equity-based), pension, retirement, vacation, severance, deferred compensation or other compensation or benefit plan (including any plan that would constitute a Company Plan), policy, agreement, trust, fund or arrangement with, for or in respect of, any stockholder, director, officer, other employee, consultant or Affiliate, other than (i) as required pursuant to applicable law, (ii) increases in compensation or benefits in accordance with the terms of agreements in effect on the date of this Agreement set forth on Section 5.2(h) of the Company Disclosure Schedule (complete and correct copies of which have been made delivered to Parent by the Company), (iii) increases in salaries, wages and benefits of employees (other than officers) made in the ordinary course of business consistent with past practice and in amounts and in a manner consistent with past practice, (iv) taking any such actions in connection with the hiring and termination of employees (other than officers) in the ordinary course of business consistent with past practice, and (v) the grant of any awards or bonuses pursuant to the amended Operating Income Bonus Plan-US up to $250,000 in the aggregate; provided, however, such limitation shall not apply to or include grants or commitments made prior to the date hereof;
(j) make, change or revoke any material election concerning Taxes or Tax Returns, file any amended Tax Return, enter into any “keep well” closing agreement with respect to Taxes, settle any material Tax claim or other Contract assessment or surrender any right to maintain claim a refund of Taxes or obtain 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned SubsidiariesTax ruling;
(k) institute anymake any changes (other than immaterial changes made in the ordinary course of business) in financial or tax accounting methods, principles, policies or practices (or change an annual accounting period), except insofar as may be required by GAAP or applicable Law or such changes in practices as may be made in connection with the Company's efforts to enhance its and its Subsidiaries' internal controls over financial reporting;
(l) amend the Company Charter Documents or the Subsidiary Documents;
(m) adopt a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization, merger, consolidation or other reorganization;
(n) waive, release, assign, settle or compromise any action, investigation, proceeding or litigation instituted, commenced, pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by threatened against the Company or any of its Subsidiaries Subsidiaries, other than waivers, releases, assignments, settlements or compromises in the ordinary course of any amount exceeding business consistent with past practice that involve only the payment of monetary damages not in excess of $25,000 individually or $100,000 in the aggregate, other than in any Legal Action brought against Parent or Merger Sub arising out case without the imposition of a breach or alleged breach of this Agreement by Parent or Merger Sub; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar equitable relief or has a material restrictive impact any restrictions on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practicesand operations of, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorizeon, or make the admission of any commitment with respect towrongdoing by, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business)Subsidiaries; or
(so) agree agree, in writing or commit otherwise, to do take any of the foregoing. Nothing contained foregoing actions or, subject to Section 5.3, take any action or agree, in writing or otherwise, to take any action, which would cause any of the conditions to the Merger set forth in this Agreement shall give Parent, directly or indirectly, the right not to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operationsbe satisfied.
Appears in 1 contract
Samples: Merger Agreement (Warburg Pincus Private Equity IX, L.P.)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of businessbusiness consistent with past practice, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly provided or contemplated by this Agreement or as set forth in on Section 6.01 5.01 of the Company Disclosure Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws (or other comparable organizational documents);
(b) (i) split, combine or reclassifyreclassify any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
, (ciii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned Subsidiaries of the CompanySubsidiary);
(dc) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock Option in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with its their terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (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 past or present directors, officers or employees, (iii) promote any officers or employees, except with respect to employees with a base salary of less than $60,000 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 accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its wholly-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case in the ordinary course of business consistent with past practice, in each case excluding any transfer, license, sale, lease or other disposition in connection with any transaction between or among the Company and/or one or more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $25,000 individually or $100,000 in the aggregate, other than 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; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business of the Company or any Affiliate thereof;
(l) make any material change in any method of financial accounting principles or practices, except for any change required by a change in GAAP or applicable Law;
(m) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance;
(n) authorize, or make any commitment with respect to, any capital expenditure, except as contemplated by the Company’s existing fiscal year 2012 Capital Budget;
(o) make, change or revoke any material Tax election, change any material method of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxes;
(p) fail to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangement, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice (it being understood that, for the purposes of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into by the Company or any of its Subsidiaries in the ordinary course of business); or
(s) agree or commit to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations.,
Appears in 1 contract
Samples: Merger Agreement (Cardtronics Inc)
Conduct of Business of the Company. The Company shallExcept as otherwise expressly ---------------------------------- permitted by the terms of this Agreement, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until hereof to the Effective Time, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the ordinary course of business, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, carry on their respective businesses in the ordinary course in substantially the same manner as presently conducted (including with respect to advertising, promotions and capital expenditures) and in compliance in all material respects with Applicable Laws, use its commercially their reasonable best efforts to preserve substantially intact its and its Subsidiaries’ business organization, consistent with past practices to keep available the services of its the present employees of the Company and its Subsidiaries’ current officers Subsidiaries and employees, to preserve its and its Subsidiaries’ present their relationships with customers, supplierssuppliers and others with whom the Company and its Subsidiaries deal to the end that their goodwill and ongoing businesses shall not be materially impaired in any material respect at the Closing Date. The Company shall not, distributorsand shall cause its Subsidiaries not to, licensorstake any action that would, licensees or that is reasonably likely to, result in any of the representations and other Persons having business relationships with itwarranties of the Company set forth in Article IV being untrue in any material respect as of the date made or in any of the conditions to the consummation of the Merger set forth herein not being satisfied. Without In addition, and without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated permitted by the terms of this Agreement or as set forth in Section 6.01 6.1 of the Company Disclosure Letter or as required by applicable LawLetter, during the period from the date hereof to the Effective Time, the Company shall not, nor not (and shall it permit any of cause its Subsidiaries not to), without the prior written consent of Parent Acquiror, which decision regarding consents shall be made promptly (which consent shall not be unreasonably withheld or delayed):in light of its circumstances) after receipt of notice seeking such consent:
(a1) amend or propose to except for the Charter Amendment, amend its certificate Restated Certificate of incorporation or by-laws (Incorporation, Bylaws or other comparable organizational documents);
(b2) split, combine or reclassify, repurchasesubject to Sections 7.7 and 7.14(b), redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities or Company Subsidiary Securities;
(c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, acquire any shares of its capital stock, or issue any capital stock or any option, warrant or right relating thereto or any securities convertible into or exchangeable for any shares of its capital stock, or split, combine or reclassify any of its capital stock or issue any securities in exchange or in substitution for shares of its capital stock;
(3) subject to Section 7.14(b), (A) grant or agree to grant to any employee any increase in wages or bonus, severance, profit sharing, retirement, deferred compensation, insurance or other compensation or benefits, or establish any new compensation or benefit plans or arrangements, or amend or agree to amend any existing Benefit Plans or Equity Appreciation Rights Plans, except as may be required under existing agreements or in the ordinary course of business consistent with past practices or (B) enter into any new RSPA or amend the terms of any existing RSPA or accelerate the vesting of any shares of Class B Common Stock issued thereunder;
(4) merge, amalgamate or consolidate with any other entity in any transaction in which the Company is not the surviving corporation (other than dividends or distributions from its direct or indirect wholly-owned Subsidiaries to the Company or other direct or indirect wholly-owned mergers between Subsidiaries of the Company), sell all or substantially all of its business or assets, or acquire all or substantially all of the business or assets of any other Person;
(d) issue, sell, pledge, dispose of or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Stock Option outstanding under Company Stock Plans as of the date of this Agreement in accordance with its terms, or (ii) in accordance with the Stockholder Rights Agreement;
(e) except as required by applicable Law or pursuant to Section 3.03, (i) increase the compensation of directors, officers or employees of the Company or any of its Subsidiaries, (ii5) enter into any new or amend in any material respect, any existing employment, severanceconsulting, retention severance or change in control similar agreement with any of its past or present directors, officers or employees, (iii) promote any officers or employeesindividual, except with respect to employees with severance gifts or payments of a base salary of less than $60,000 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 nominal nature to accelerate rights under any Company Employee Plans, or make any contribution to any Company Employee Plan;
(f) hire any officer or employee, except for the replacement of any current employee whose employment with the Company or any Subsidiary thereof is terminated or who resigns for any reason, provided that such replacement employee’s annual base salary does not exceed $60,000;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person, except for (w) intercompany loans, advances or capital contributions entered into in between or among the Company and/or any of its whollypersons holding non-owned Subsidiaries, (x) trade payables arising in the ordinary course of business, (y) advances to employees for expenses reimbursable under the Company and/or its Subsidiaries’ business expense reimbursement policy, and (z) advances in the ordinary course of business;
(h) transfer, license, sell, lease or otherwise dispose of any 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 Company, other than in the case of obsolete equipment or assets being replaced, in each case officer/executive level positions in the ordinary course of business consistent with past practice;
(6) subject to Section 7.7, declare, set aside or make any dividends, payments or distributions in cash, securities or property to the stockholders of the Company, whether or not upon or in respect of any share of Company Capital Stock;
(7) incur or assume any Indebtedness other than as specifically set forth in Section 6.1(vii) of the Company Disclosure Letter;
(8) voluntarily grant any material Encumbrance on any of its material assets, other than Encumbrances that are incurred in the ordinary course of business;
(9) make any change in any method of accounting or accounting practice or policy, except as required by Applicable Laws or by GAAP;
(10) make or incur any capital expenditures that are not set forth in Section 6.1(x) of the Company Disclosure Letter or that, individually, are in excess of $25 million or, in each case excluding the aggregate, in excess of $50 million;
(11) subject to Section 7.7, sell, lease, swap or otherwise dispose of any transferassets, licenseother than (A) sales, leases, swaps or other dispositions of such assets not having a fair market value in excess of $15 million individually or $30 million in the aggregate (so long as the Company provides notice to Acquiror of any sale, lease lease, swap or other disposition of any asset having a fair market value of greater than $5 million) or (B) swaps of Systems or assets of Systems in connection with any transaction between order to facilitate the clustering of Systems or among dispose of Systems located in the Company and/or one or Acquiror Region; provided, however, that (1) such swaps shall not in -------- ------- the aggregate involve more of its wholly-owned Subsidiaries;
(i) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) 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 than 500,000 Subscribers of the Company or any of its Subsidiaries, guarantee (2) 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, or incur any Liens other than Permitted Liens in connection with the foregoing, other than the financing of ordinary course trade payables consistent with past practice or pursuant to an existing financing facility, except for intercompany loans entered into in between or among the Company and/or any of its wholly-owned Subsidiaries;
(k) institute any, or settle or compromise any pending or threatened, Legal Actions involving injunctive relief or the payment of monetary damages cable television systems acquired by the Company or any of its Subsidiaries in any such swap shall not be located in the Acquiror Region, (3) any cable television systems acquired by the Company in any such swap shall not be in a franchise area where there is a substantial overbuild with any other CATV system owned by the Company, Acquiror or any of their respective Affiliates, (4) the aggregate amount of cash paid by the Company or any amount exceeding of its Subsidiaries in any such swap shall not exceed $25,000 individually or $100,000 50 million in the aggregate, other than (5) any Legal Action brought against Parent or Merger Sub arising out such swap shall require the approval of a breach or alleged breach of this Agreement by Parent or Merger Sub; providedAcquiror, which approval shall not be unreasonably withheld and Acquiror shall be reasonably satisfied that neither the Company nor has received substantially equivalent value including cash or other assets and (6) to the extent that the Company or any Subsidiary must apply for the consent of its Subsidiaries the Governmental Authority as a condition to the transfer of control or assignment of any Franchise associated with any such swap, such application shall settle or agree include an application to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a material restrictive impact on the business Governmental Authority, and relevant information relating to the proposed transaction, requesting contemporaneous approval for the anticipated acquisition of the Company or its Subsidiary by Acquiror as contemplated herein and the transfer of control of said Franchise to the Surviving Corporation in accordance with the terms hereof; and provided, -------- further, that any Affiliate thereofconsent required from a Governmental Authority as a ------- condition to consummating such swap shall be deemed a Required Franchise Consent;
(l12) make acquire or agree to acquire by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or equity in, or by any material change other manner, any business of any Person or acquire or agree to acquire any assets (other than supplies, raw materials and inventory in any method of financial accounting principles or practicesthe ordinary course, except for any change required capital expenditures permitted by a change in GAAP or applicable Lawclause (x) above and asset swaps permitted by clause (xi) above);
(m13) enter into abandon, avoid, dispose, surrender, fail to file for timely renewal, terminate or amend in any materially adverse manner the terms of any material agreementFranchises, agreement in principleany FCC license that would have a material adverse effect on the operation of a System or the Social Contract Order, letter except as amended by virtue of intentthe proposed Social Contract Amendment, memorandum of understanding or similar Contract or, with respect to any joint ventureMaterial Franchise, strategic partnership or alliancefail to file for renewal pursuant to Section 626(a) of the Cable Act;
(n14) authorize, delete any programming service on the Systems or make any commitment with respect to, any capital expenditure, except material change in the programming services offered on the Systems other than in the ordinary course of business or as contemplated required by the Company’s existing fiscal year 2012 Capital BudgetCable Act, the Social Contract Order or any amendments thereto;
(o15) makeexcept as otherwise permitted by clauses (xi) and (xii), change modify, amend, terminate, renew or revoke fail to use reasonable efforts to renew any material Tax electioncontract or agreement necessary to continue the Company's business in the ordinary course or waive, change release or assign any material method rights or claims, other than in the ordinary course of Tax accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in Liability or consent to any extension or waiver of the limitations period applicable to any material claim or assessment, in each case, with respect to Taxesbusiness;
(p16) fail offer free or reduced-price service as an inducement to maintain in full force and effect material insurance policies covering the Company or its Subsidiaries and its or their properties, assets and businesses in a form and amount consistent with past practice;
(q) adopt, modify from the form existing on the date hereof, or implement a rights plan, “poison pill” or similar arrangementany Person, except as contemplated by this Agreement;
(r) enter into, terminate, modify or waive any material right under, any Material Contract or Permit, other than Contracts entered into with customers in the ordinary course of business consistent with past practice practice;
(it being understood that17) except as permitted by Applicable Law, for including the purposes Social Contract Order and any amendments thereto, and (A) as disclosed to Acquiror in writing at least 30 days prior to any rate change, implement any rate change, retiering or repackaging of this subsection, “consistent with past practice” shall not include entering into any Contract having terms and conditions (including terms and conditions regarding pricing and Liabilities) that are, in the aggregate, substantially inconsistent with the terms and conditions found in other Contracts of similar size and scope previously entered into CATV programming offered by the Company or any of its Subsidiaries Subsidiaries, (B) and as disclosed in writing to Acquiror at least 30 days prior to any cost-of-service rate change make any cost-of- service election under the rules and regulations adopted under the Cable Act, (C) determine a method of refund pursuant to 47 C.F.R. Section 76.942(d) or 76.961(c) or (D) amend any Franchise or agree to make any payments or commitments, including commitments to make future capital improvements or provide future services, in connection with any renewal of any Franchise other than that which the Company would make in the ordinary course of business;
(18) enter into any agreement, understanding or commitment that restrains, limits or impedes the Company's or Acquiror's ability to compete with or conduct any business or line of business;
(19) invest or enter into any agreement, understanding or commitment, whether written or oral, by or on behalf of the Company or its Subsidiaries, to invest or provide additional capital in respect of assets, businesses or entities; provided, however, that the restrictions -------- ------- contained in this clause shall not apply to existing commitments as set forth in Section 6.1(xix) of the Company Disclosure Letter or to any investments in excess of $10 million individually or $20 million in the aggregate;
(20) except as otherwise provided in clause (xix) above or Section 7.14, enter into any material contract or agreement with, or make any loan or advance to, any Affiliate (other than a wholly owned Subsidiary) of the Company or any stockholder or Affiliate thereof;
(21) enter into, or amend the terms of, any agreement relating to interest rate swaps, caps or other hedging or derivative instruments relating to Indebtedness of the Company and its Subsidiaries, except as required under agreements relating to existing Indebtedness and Indebtedness permitted by clause (vii) above;
(22) conduct its business in a manner or take, or cause to be taken, any other action (including, without limitation, effecting or agreeing to effect or announcing an intention or proposal to effect, any acquisition, business combination, merger, consolidation, restructuring or similar transaction) that would or might reasonably be expected to prevent Acquiror or the Company from consummating the transactions contemplated hereby in accordance with the terms of this Agreement (regardless of whether such action would otherwise be permitted or not prohibited hereunder), including, without limitation, any action which may limit the ability of Acquiror or the Company to consummate the transactions contemplated hereby as a result of antitrust or other regulatory concerns;
(23) purchase, sell or trade (or announce any intention or proposal to purchase, sell or trade) any shares of Media Stock, or take any other action a principal purpose of which is to affect the calculation of the Determination Price; or
(s24) agree agree, whether in writing or commit otherwise, to do any of the foregoing. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Timedate hereof, Acquiror has delivered to the Company shall exercise, consistent with a list (which the terms and conditions Acquiror may update from time to time) designating certain individuals of the Acquiror to whom the Company may direct requests for consents under this Agreement, complete control and supervision over its and its Subsidiaries’ operationsSection 6.1.
Appears in 1 contract
