Conduct of Business of the Target. The Target will, during the period from the date of this Agreement until the Effective Time (such date, the “Conduct of Business End Date”), except with the prior written consent of Parent (which consent will not be unreasonably withheld, conditioned or delayed), as expressly contemplated by this Agreement or as required by applicable Law, (i) conduct its and its Subsidiaries operations in the ordinary course of business consistent with past practice, (ii) use its commercially reasonable efforts to preserve intact its business organization and to preserve satisfactory business relationships with customers, suppliers, licensors, licensees, distributors, wholesalers, lessors and others having material business dealings with the Target, and (iii) comply in all material respects with all applicable Laws. Without limiting the generality of the foregoing, between the date of this Agreement and the Conduct of Business End Date, except as otherwise expressly contemplated by this Agreement or as set forth on Section 7.01 of the of the Disclosure Schedules or as required by applicable Law, the Target will not (and will cause its Subsidiaries not to) without the prior written consent of Parent (which consent will not be unreasonably withheld, conditioned or delayed): (a) amend or propose to amend its certificate of incorporation or by-laws; (b) (i) split, combine or reclassify any Target Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Target Securities other than in the ordinary course of business consistent with past practices, (iii) 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; (c) issue, sell, pledge, dispose of or encumber any Target Securities, other than (i) the issuance of shares of Target Common Stock upon the exercise of any Target Equity Award outstanding as of the date of this Agreement in accordance with its terms, or (ii) the issuance of shares of Target Common Stock in respect of other equity compensation awards outstanding under Target Stock Plans as of the date of this Agreement in accordance with their terms; (d) except as required by applicable Law or by any Target 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 Target to directors, officers or employees, (ii) enter into any new or amend 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 in connection with the termination or resignation of any officer or employee, (iv) reprice any Target Equity Award or amend, accelerate or waive any vesting terms related to any Target Equity Award, or (v) establish, adopt, enter into, amend, terminate or take any action to accelerate rights under any Target Employee Plans or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Target Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Target Employee Plan, other than contributions required by Law, the terms of such Target Employee Plans as in effect on the date hereof or that are made in the ordinary course of business consistent with past practice; (e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or make any loans, advances or capital contributions to or investments in any Person; (i) other than in the ordinary course of business consistent with past practices, transfer, license, sell, lease or otherwise dispose of any assets (whether by way of merger, consolidation, sale of stock or assets, or otherwise), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization; (g) 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 Target or guarantee any debt securities of another Person; (h) 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; (i) except in connection with actions permitted by Section 7.04, take any action to exempt any Person from, or make any acquisition of securities of the Target by any Person not subject to, any state takeover statute or similar statute or regulation that applies to the Target 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 of their respective Subsidiaries or Affiliates, or the transactions contemplated by this Agreement; (j) abandon, encumber, convey title (in whole or in part) or license any Target IP, other than non-exclusive licenses in the ordinary course of business consistent with past practice; (A) except in the ordinary course of business consistent with past practice, (i) enter into, terminate or materially amend or modify any Target Material Contract or Contract that, if in effect on the date hereof, would have been a Target Material Contract, (ii) waive any term of, or waive any default under, or release, settle or compromise any claim against the Target or Liability or obligation owing to the Target under, any Target Material Contract, or (B) enter into any Contract which contains a change of control or similar provision that would require a payment to the other party or parties thereto in connection with the Offer, the Merger, the Support Agreement or the other transactions contemplated herein (including in combination with any other event or circumstance); (l) institute, settle or compromise any Legal Actions pending before any arbitrator, court or other Governmental Entity involving the payment of monetary damages by the Target of any amount exceeding $100,000 in the aggregate, other than (i) any Legal Action brought against Parent, Merger Sub or any of their respective Affiliates or Representatives, and (ii) the settlement of claims, liabilities or obligations reserved against on the most recent balance sheet of the Target included in the Target SEC Documents; provided that, with respect to subsection (ii), the Target shall not settle or agree to settle any Legal Action which settlement involves injunctive or similar relief or has a restrictive impact on the Target’s business; (m) prepare or file any Tax Return inconsistent with past practices, or take any position, make any election or adopt any method inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods, change or revoke any election related to Taxes, change an annual accounting period, change any method of Tax accounting or file any amended Tax Return, settle or compromise any litigation, audit or other proceedings with respect to Taxes, except any waiver of a statutory period of limitations with respect to the assertion or collection of Taxes or execute a closing agreement with respect to Taxes, if such position, election, adoption, change, revocation, amendment, settlement, compromise, agreement, consent or other action would have the effect of increasing the Tax Liability of the Target for any period after the Closing Date by an amount in excess of $100,000 in the aggregate or decreasing any Tax attribute of the Target existing on the Closing Date by an amount in excess of $100,000 in the aggregate; or (n) agree or commit to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (World Energy Solutions, Inc.), Merger Agreement (Enernoc Inc)
Conduct of Business of the Target. The Target will, during the period from the date of this Agreement until the earlier of (a) the first date on which at least a majority of the Target Board is comprised of Parent designees (whether in accordance with Section 2.03 or otherwise) and (b) the Effective Time (such earlier date, the “Conduct of Business End Date”), except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent (which consent will not be unreasonably withheld, conditioned withheld or delayed), as expressly contemplated by this Agreement or as required by applicable Law, (i) conduct its and its Subsidiaries operations business in the ordinary course of business consistent with past practice, (ii) use its commercially reasonable efforts to preserve intact its business organization and to preserve satisfactory business relationships with customers, suppliers, licensors, licensees, distributors, wholesalers, lessors and others having material business dealings with the Target, and (iii) comply in all material respects with all applicable Laws. Without limiting the generality of the foregoing, between the date of this Agreement and the Conduct of Business End Date, except as otherwise expressly contemplated by this Agreement or as set forth on Section Schedule 7.01 of the of the Disclosure Schedules or as required by applicable Law, the Target will not (and will cause its Subsidiaries not to) without the prior written consent of Parent (which consent will not be unreasonably withheld, conditioned withheld or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws;
(b) (i) split, combine or reclassify any Target Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Target Securities other than in the ordinary course of business consistent with past practicesSecurities, (iii) 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;
(c) issue, sell, pledge, dispose of or encumber any Target Securities, other than (i) the issuance of shares of Target Common Stock upon the exercise of any Target Equity Award outstanding as of the date of this Agreement in accordance with its terms, or (ii) the issuance of shares of Target Common Stock in respect of other equity compensation awards outstanding under Target Stock Plans as of the date of this Agreement in accordance with their terms, or (iii) the issuance of Target Equity Awards and the issuance of shares of Target Common Stock upon the exercise of such Target Equity Awards in accordance with their terms in the ordinary course of business consistent with past practice;
(d) except as required by applicable Law or by any Target 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 Target 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 officers or employees, (iii) promote any officers or employees, except in connection with the Target’s annual or quarterly compensation review cycle or as the result of the termination or resignation of any officer or employee, or (iv) reprice any Target Equity Award or amend, accelerate or waive any vesting terms related to any Target Equity Award, or (v) establish, adopt, enter into, amend, terminate or take any action to accelerate rights under any Target Employee Plans or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Target Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Target Employee Plan, other than contributions required by Law, the terms of such Target Employee Plans as in effect on the date hereof or that are made in the ordinary course of business consistent with past practice;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or make any loans, advances or capital contributions to or investments in any PersonPerson in excess of $125,000 in the aggregate;
(i) other than in the ordinary course of business consistent with past practices, transfer, license, sell, lease or otherwise dispose of any assets (whether by way of merger, consolidation, sale of stock or assets, or otherwise), except in the ordinary course of business consistent with past practice, or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) 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 Target or guarantee any debt securities of another Person, other than in connection with the financing of ordinary course trade payables consistent with past practice;
(h) 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;
(i) except in connection with actions permitted by Section 7.04, take any action to exempt any Person from, or make any acquisition of securities of the Target by any Person not subject to, any state takeover statute or similar statute or regulation that applies to the Target 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 of their respective Subsidiaries or Affiliates, or the transactions contemplated by this Agreement;
(j) abandon, encumber, convey title (in whole or in part) or license any Target material Target-Owned IP, other than non-exclusive licenses in the ordinary course of business consistent with past practice;
(A) except in the ordinary course of business consistent with past practice, (ik) enter into, terminate into or materially amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any Target Material Contract or any Lease with respect to material real estate or any other Contract or Lease that, if in effect on as of the date hereof, hereof would have been constitute a Target Material Contract, (ii) waive any term of, Contract or waive any default under, or release, settle or compromise any claim against the Target or Liability or obligation owing Lease with respect to the Target under, any Target Material Contract, or (B) enter into any Contract which contains a change of control or similar provision that would require a payment to the other party or parties thereto in connection with the Offer, the Merger, the Support Agreement or the other transactions contemplated herein (including in combination with any other event or circumstance)material real estate hereunder;
(l) institute, settle or compromise any Legal Actions pending or threatened before any arbitrator, court or other Governmental Entity involving the payment of monetary damages by the Target of any amount exceeding $100,000 in the aggregate, other than (i) any Legal Action brought against Parent, Merger Sub or any of their respective Affiliates or Representatives, and (ii) the settlement of claims, liabilities or obligations reserved against on the most recent balance sheet of the Target included in the Target SEC Documents; provided that, with respect to subsection (ii), the Target shall not settle or agree to settle any Legal Action which settlement involves injunctive or similar relief or has a restrictive impact on the Target’s business;
(m) 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;
(n) prepare or file any Tax Return inconsistent with past practices, or take any position, make any election or adopt any method inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods, change or revoke any election related to Taxes, change an annual accounting period, change any method of Tax accounting or file any amended Tax Return, settle or compromise any litigation, audit or other proceedings with respect to Taxes, except any waiver of a statutory period of limitations with respect to the assertion or collection of Taxes or execute a closing agreement with respect to Taxes, if such position, election, adoption, change, revocation, amendment, settlement, compromise, agreement, consent or other action would have the effect of increasing the Tax Liability of the Target for any period after the Closing Date by an amount in excess of $100,000 in the aggregate or decreasing any Tax attribute of the Target existing on the Closing Date by an amount in excess of $100,000 in the aggregate; or
(n) agree or commit to do any of the foregoing.limitations
Appears in 2 contracts
Samples: Merger Agreement (Clearlake Capital Partners Ii Lp), Merger Agreement (Veramark Technologies Inc)
Conduct of Business of the Target. The Target willcovenants and agrees that, during the period from the date of this Agreement until the Effective Time earlier of the Closing Date and the date on which this Agreement is terminated in accordance with its terms, unless the Purchaser shall otherwise agree in writing (such date, the “Conduct of Business End Date”), except with the prior written consent of Parent (which consent will agreement not to be unreasonably withheld, conditioned withheld or delayed), except as required by law or as otherwise expressly permitted or specifically contemplated by this Agreement or as required by applicable Law, (iAgreement:
a) conduct its and its Subsidiaries operations the Business of the Target shall be conducted only in the ordinary course of business and consistent with past practice, (ii) and the Target shall use its commercially commercially-reasonable efforts to maintain and preserve intact its business organization and to preserve satisfactory business relationships with customers, suppliers, licensors, licensees, distributors, wholesalers, lessors and others having material business dealings with the Target, and (iii) comply in all material respects with all applicable Laws. Without limiting the generality of the foregoing, between the date of this Agreement and the Conduct of Business End Date, except as otherwise expressly contemplated by this Agreement or as set forth on Section 7.01 of the of the Disclosure Schedules or as required by applicable LawBusiness, the Target will Assets and business relationships; and
b) the Target shall not (and will cause its Subsidiaries not to) without the prior written consent of Parent (which consent will not be unreasonably withheld, conditioned or delayedunless otherwise contemplated in this Agreement):
(a) amend or propose to amend its certificate of incorporation or by-laws;
(b) (i) splitmake any capital expenditures, combine additions or reclassify any Target Securitiesimprovements or commitments for the same which individually or in the aggregate exceed $10,000, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Target Securities other than in the ordinary course of business consistent with past practicesbusiness;
(ii) acquire or agree to acquire (by tender offer, (iii) declareexchange offer, set aside merger, amalgamation, acquisition of shares or pay any dividend or distribution (whether in cash, stock, property assets or otherwise) in respect of, any Person or enter into other business organization or division or acquire or agree to acquire any Contract with respect to the voting of, any shares of its capital stockmaterial assets;
(c) issue, sell, pledge, dispose of or encumber any Target Securities, other than (i) the issuance of shares of Target Common Stock upon the exercise of any Target Equity Award outstanding as of the date of this Agreement in accordance with its terms, or (ii) the issuance of shares of Target Common Stock in respect of other equity compensation awards outstanding under Target Stock Plans as of the date of this Agreement in accordance with their terms;
(d) except as required by applicable Law or by any Target 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 Target to directors, officers or employees, (iiiii) enter into any new Material Contracts regarding its business operations, including joint ventures, partnerships or amend 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 in connection with the termination or resignation of any officer or employee, other arrangements;
(iv) reprice make any Target Equity Award material change in accounting procedures or amend, accelerate or waive any vesting terms related to any Target Equity Award, or practices;
(v) establishmortgage, adopt, enter into, amend, terminate pledge or take hypothecate any action to accelerate rights under any Target Employee Plans or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Target Employee Plan if it were in existence as of the date Target Assets or subject any of this Agreement, or make any contribution the Target Assets to any Target Employee Plan, other than contributions required by Law, the terms of such Target Employee Plans as in effect on the date hereof or that are made in the ordinary course of business consistent with past practiceEncumbrance;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or make any loans, advances or capital contributions to or investments in any Person;
(ivi) other than in the ordinary course of business consistent with past practicesbusiness, enter into any agreement or arrangement granting any rights to purchase or lease any of the Target Assets or rights or requiring the consent of any Person to the transfer, license, sell, assignment or lease or otherwise dispose of any assets (whether by way of merger, consolidation, sale of stock Target Assets or assets, or otherwise), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationrights;
(gvii) 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 Target or guarantee any debt securities of another Person;
(h) 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;
(i) except in connection with actions permitted by Section 7.04, take any action to exempt any Person from, or make any acquisition of securities of the Target by any Person not subject to, any state takeover statute or similar statute or regulation that applies to the Target 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 of their respective Subsidiaries or Affiliates, or the transactions contemplated by this Agreement;
(j) abandon, encumber, convey title (in whole or in part) or license any Target IP, other than non-exclusive licenses in the ordinary course of business consistent with past practicebusiness, enter into any other material transaction, or any amendment of any Contract which is material to its Business;
(Aviii) except sell, lease, sublease, assign or transfer (by tender offer, exchange offer, merger, amalgamation, sale of shares or the Target Assets or otherwise) any of the Target Assets;
(ix) enter into any Agreement resulting in a change of control of the Target;
(x) other than in the ordinary course of business consistent with past practicebusiness, (i) enter intocancel, terminate or materially amend or modify any Target Material Contract or Contract that, if in effect on the date hereof, would have been a Target Material Contract, (ii) waive any term of, or waive any default under, or release, settle or compromise any claim against the Target Indebtedness or Liability claims, including any accounts payable and receivable;
(xi) settle any outstanding claim, dispute, litigation matter or obligation owing to the Target under, any Target Material Contract, or tax dispute; or
(Bxii) enter into any Contract which contains a change of control agreement or similar provision that would require a payment to the other party or parties thereto in connection with the Offer, the Merger, the Support Agreement or the other transactions contemplated herein (including in combination with any other event or circumstance);
(l) institute, settle or compromise any Legal Actions pending before any arbitrator, court or other Governmental Entity involving the payment of monetary damages by the Target of any amount exceeding $100,000 in the aggregate, other than (i) any Legal Action brought against Parent, Merger Sub or any of their respective Affiliates or Representatives, and (ii) the settlement of claims, liabilities or obligations reserved against on the most recent balance sheet of the Target included in the Target SEC Documents; provided that, with respect to subsection (ii), the Target shall not settle or agree to settle any Legal Action which settlement involves injunctive or similar relief or has a restrictive impact on the Target’s business;
(m) prepare or file any Tax Return inconsistent with past practices, or take any position, make any election or adopt any method inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods, change or revoke any election related to Taxes, change an annual accounting period, change any method of Tax accounting or file any amended Tax Return, settle or compromise any litigation, audit or other proceedings with respect to Taxes, except any waiver of a statutory period of limitations with respect to the assertion or collection of Taxes or execute a closing agreement with respect to Taxes, if such position, election, adoption, change, revocation, amendment, settlement, compromise, agreement, consent or other action would have the effect of increasing the Tax Liability of the Target for any period after the Closing Date by an amount in excess of $100,000 in the aggregate or decreasing any Tax attribute of the Target existing on the Closing Date by an amount in excess of $100,000 in the aggregate; or
(n) agree or commit understanding to do any of the foregoing.
Appears in 1 contract
Conduct of Business of the Target. The Target will, during During the period from the date of this Agreement until the Effective Time (such dateTime, the “Conduct Target shall, and shall cause each of Business End Date”)its Subsidiaries, except as expressly contemplated by this Agreement, as required by applicable Law, or with the prior written consent of Parent Aytu (which consent will shall not be unreasonably withheld, conditioned conditioned, or delayed), as expressly contemplated by this Agreement or as required by applicable Law, (i) to use its reasonable best efforts to conduct its and its Subsidiaries operations business in the ordinary course of business consistent with past practice. To the extent consistent therewith, (ii) the Target 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 organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve satisfactory business its and its Subsidiaries' present relationships with customers, suppliers, distributors, licensors, licensees, distributors, wholesalers, lessors and others other Persons having material business dealings relationships with the Target, and (iii) comply in all material respects with all applicable Lawsit. Without limiting the generality of the foregoing, between the date of this Agreement and the Conduct of Business End DateEffective Time, except as otherwise expressly contemplated by this Agreement or Agreement, as set forth on in Section 7.01 5.01 of the of Target Disclosure Letter, the Disclosure Schedules Promissory Note, or as required by applicable Law, the Target will not (and will cause shall not, nor shall it permit any of its Subsidiaries not to) , without the prior written consent of Parent Aytu (which consent will shall not be unreasonably withheld, conditioned conditioned, or delayed):
(a) amend or propose to amend its certificate of incorporation or by-lawsCharter Documents;
(b) (i) split, combine combine, or reclassify any Target Securities or Target Subsidiary Securities, (ii) repurchase, redeem redeem, or otherwise acquire, or offer to repurchase, redeem redeem, or otherwise acquire, any Target Securities other than in the ordinary course of business consistent with past practicesor Target Subsidiary Securities, or (iii) 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 stockstock (other than dividends from its direct or indirect wholly-owned Subsidiaries);
(c) issue, sell, pledge, dispose of of, or encumber any Target Securities or Target Subsidiary Securities, other than (i) the issuance of shares of Target Common Stock upon the exercise of any Target Equity Award outstanding as of the date of this Agreement in accordance with its terms, or (ii) the issuance of shares of Target Common Stock in respect of other equity compensation awards outstanding under Target Stock Plans as of the date of this Agreement in accordance with their terms;
(d) except as required by applicable Law or by any Target Employee Plan or Contract in effect as of the date of this Agreement, Agreement (i) increase the compensation payable or that could become payable by the Target or any of its 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, (ii) enter into any new or amend 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 in connection with the Target's annual or quarterly compensation review cycle or as the result of the termination or resignation of any officer or employee, (iv) reprice any Target Equity Award or amend, accelerate or waive any vesting terms related to any Target Equity Award, or (viii) establish, adopt, enter into, amend, terminate terminate, exercise any discretion under, or take any action to accelerate rights under any Target Employee Plans or any plan, agreement, program, policy, trust, fund fund, or other arrangement that would be a Target Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Target Employee Plan, other than contributions required by Law, the terms of such Target Employee Plans as in effect on the date hereof hereof, or that are made in the ordinary course of business consistent with past practice;
(e) 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;
(f) (i) other than in the ordinary course of business consistent with past practices, 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 Target; provided, that the foregoing shall not prohibit the Target and its Subsidiaries from transferring, selling, leasing, or disposing of obsolete equipment or assets being replaced, or granting of non-exclusive licenses under the Target IP, in each case in the ordinary course of business consistent with past practice, or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, or other reorganization;
(g) repurchase, prepay 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 Target 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, other than in connection with the financing of ordinary course trade payables consistent with past 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 Target 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 Target Material Contract or Lease with respect to material Leased Real Estate hereunder;
(i) institute, settle, or compromise any Legal Action involving the payment of monetary damages by the Target or any of its Subsidiaries of any amount exceeding $100,000 in the aggregate, other than (i) any Legal Action brought against Aytu or Merger Sub arising out of a breach or alleged breach of this Agreement by Aytu or Merger Sub, and (ii) the settlement of claims, liabilities, or obligations reserved against on the Target Balance Sheet; provided, that neither the Target 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 restrictive impact on the Target's business;
(j) 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;
(k) (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 Target Balance Sheet (or most recent consolidated balance sheet included in the Target 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 Target 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) except in connection with actions permitted by Section 7.045.05 hereof, take any action to exempt any Person from, or make any acquisition of securities of the Target by any Person not subject to, any state takeover statute or similar statute or regulation that applies to the Target with respect to a Takeover Proposal Target Alternative Transaction or otherwise, including the restrictions on “"business combinations” " set forth in Section 203 of the DGCL, except for ParentAytu, Merger Sub Sub, or any of their respective Subsidiaries or Affiliates, or the transactions contemplated by this Agreement;
(jn) abandon, encumberallow to lapse, convey title (sell, assign, transfer, grant any security interest in whole otherwise encumber or in part) or license dispose of any Target IP, or grant any right or license to any Target IP other than non-exclusive licenses granted in the ordinary course of business consistent with past practice;
(Ao) terminate or modify in any material respect, or fail to exercise renewal rights with respect to, any material insurance policy;
(p) except to the extent expressly permitted by Section 5.05 or ARTICLE VII, take any action that is intended or that would reasonably be expected to, individually or in the ordinary course of business consistent with past practiceaggregate, (i) enter intoprevent, terminate materially delay, or materially amend or modify any Target Material Contract or Contract that, if in effect on impede the date hereof, would have been a Target Material Contract, (ii) waive any term of, or waive any default under, or release, settle or compromise any claim against the Target or Liability or obligation owing to the Target under, any Target Material Contract, or (B) enter into any Contract which contains a change consummation of control or similar provision that would require a payment to the other party or parties thereto in connection with the Offer, the Merger, the Support Agreement or the other transactions contemplated herein by this Agreement; or (including in combination with any other event or circumstance);
(l) institute, settle or compromise any Legal Actions pending before any arbitrator, court or other Governmental Entity involving the payment of monetary damages by the Target of any amount exceeding $100,000 in the aggregate, other than (i) any Legal Action brought against Parent, Merger Sub or any of their respective Affiliates or Representatives, and (ii) the settlement of claims, liabilities or obligations reserved against on the most recent balance sheet of the Target included in the Target SEC Documents; provided that, with respect to subsection (ii), the Target shall not settle or agree to settle any Legal Action which settlement involves injunctive or similar relief or has a restrictive impact on the Target’s business;
(m) prepare or file any Tax Return inconsistent with past practices, or take any position, make any election or adopt any method inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods, change or revoke any election related to Taxes, change an annual accounting period, change any method of Tax accounting or file any amended Tax Return, settle or compromise any litigation, audit or other proceedings with respect to Taxes, except any waiver of a statutory period of limitations with respect to the assertion or collection of Taxes or execute a closing agreement with respect to Taxes, if such position, election, adoption, change, revocation, amendment, settlement, compromise, agreement, consent or other action would have the effect of increasing the Tax Liability of the Target for any period after the Closing Date by an amount in excess of $100,000 in the aggregate or decreasing any Tax attribute of the Target existing on the Closing Date by an amount in excess of $100,000 in the aggregate; or
(nq) agree or commit to do any of the foregoing.
Appears in 1 contract
Conduct of Business of the Target. The Target will, during the period from the date of this Agreement until the earlier of (a) the first date on which at least a majority of the Target Board is comprised of Parent designees (whether in accordance with Section 2.03 or otherwise) and (b) the Effective Time (such earlier date, the “Conduct of Business End Date”), except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Parent (which consent will not be unreasonably withheld, conditioned withheld or delayed), as expressly contemplated by this Agreement or as required by applicable Law, (i) conduct its and its Subsidiaries operations business in the ordinary course of business consistent with past practice, (ii) use its commercially reasonable efforts to preserve intact its business organization and to preserve satisfactory business relationships with customers, suppliers, licensors, licensees, distributors, wholesalers, lessors and others having material business dealings with the Target, and (iii) comply in all material respects with all applicable Laws. Without limiting the generality of the foregoing, between the date of this Agreement and the Conduct of Business End Date, except as otherwise expressly contemplated by this Agreement or as set forth on Section Schedule 7.01 of the of the Disclosure Schedules or as required by applicable Law, the Target will not (and will cause its Subsidiaries not to) without the prior written consent of Parent (which consent will not be unreasonably withheld, conditioned withheld or delayed):
(a) amend or propose to amend its certificate of incorporation or by-laws;
(b) (i) split, combine or reclassify any Target Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Target Securities other than in the ordinary course of business consistent with past practicesSecurities, (iii) 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;
(c) issue, sell, pledge, dispose of or encumber any Target Securities, other than (i) the issuance of shares of Target Common Stock upon the exercise of any Target Equity Award outstanding as of the date of this Agreement in accordance with its terms, or (ii) the issuance of shares of Target Common Stock in respect of other equity compensation awards outstanding under Target Stock Plans as of the date of this Agreement in accordance with their terms, or (iii) the issuance of Target Equity Awards and the issuance of shares of Target Common Stock upon the exercise of such Target Equity Awards in accordance with their terms in the ordinary course of business consistent with past practice;
(d) except as required by applicable Law or by any Target 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 Target 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 officers or employees, (iii) promote any officers or employees, except in connection with the Target’s annual or quarterly compensation review cycle or as the result of the termination or resignation of any officer or employee, or (iv) reprice any Target Equity Award or amend, accelerate or waive any vesting terms related to any Target Equity Award, or (v) establish, adopt, enter into, amend, terminate or take any action to accelerate rights under any Target Employee Plans or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Target Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Target Employee Plan, other than contributions required by Law, the terms of such Target Employee Plans as in effect on the date hereof or that are made in the ordinary course of business consistent with past practice;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or make any loans, advances or capital contributions to or investments in any PersonPerson in excess of $125,000 in the aggregate;
(i) other than in the ordinary course of business consistent with past practices, transfer, license, sell, lease or otherwise dispose of any assets (whether by way of merger, consolidation, sale of stock or assets, or otherwise), except in the ordinary course of business consistent with past practice, or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) 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 Target or guarantee any debt securities of another Person, other than in connection with the financing of ordinary course trade payables consistent with past practice;
(h) 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;
(i) except in connection with actions permitted by Section 7.04, take any action to exempt any Person from, or make any acquisition of securities of the Target by any Person not subject to, any state takeover statute or similar statute or regulation that applies to the Target 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 of their respective Subsidiaries or Affiliates, or the transactions contemplated by this Agreement;
(j) abandon, encumber, convey title (in whole or in part) or license any Target material Target-Owned IP, other than non-exclusive licenses in the ordinary course of business consistent with past practice;
(A) except in the ordinary course of business consistent with past practice, (ik) enter into, terminate into or materially amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any Target Material Contract or any Lease with respect to material real estate or any other Contract or Lease that, if in effect on as of the date hereof, hereof would have been constitute a Target Material Contract, (ii) waive any term of, Contract or waive any default under, or release, settle or compromise any claim against the Target or Liability or obligation owing Lease with respect to the Target under, any Target Material Contract, or (B) enter into any Contract which contains a change of control or similar provision that would require a payment to the other party or parties thereto in connection with the Offer, the Merger, the Support Agreement or the other transactions contemplated herein (including in combination with any other event or circumstance)material real estate hereunder;
(l) institute, settle or compromise any Legal Actions pending or threatened before any arbitrator, court or other Governmental Entity involving the payment of monetary damages by the Target of any amount exceeding $100,000 in the aggregate, other than (i) any Legal Action brought against Parent, Merger Sub or any of their respective Affiliates or Representatives, and (ii) the settlement of claims, liabilities or obligations reserved against on the most recent balance sheet of the Target included in the Target SEC Documents; provided that, with respect to subsection (ii), the Target shall not settle or agree to settle any Legal Action which settlement involves injunctive or similar relief or has a restrictive impact on the Target’s business;
(m) 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;
(n) prepare or file any Tax Return inconsistent with past practices, or take any position, make any election or adopt any method inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods, change or revoke any election related to Taxes, change an annual accounting period, change any method of Tax accounting or file any amended Tax Return, settle or compromise any litigation, audit or other proceedings with respect to Taxes, except any waiver of a statutory period of limitations with respect to the assertion or collection of Taxes or execute a closing agreement with respect to Taxes, if such position, election, adoption, change, revocation, amendment, settlement, compromise, agreement, consent or other action would have the effect of increasing the Tax Liability of the Target for any period after the Closing Date by an amount in excess of $100,000 in the aggregate or decreasing any Tax attribute of the Target existing on the Closing Date by an amount in excess of $100,000 in the aggregateDate; or
or (no) agree or commit to do any of the foregoing.
Appears in 1 contract
Conduct of Business of the Target. The Target will, during During the period from the date of this Agreement until the Effective Time (such dateTime, the “Conduct Target shall, and shall cause each of Business End Date”)its Subsidiaries, except as expressly contemplated by this Agreement, as required by applicable Law, or with the prior written consent of Parent Aytu (which consent will shall not be unreasonably withheld, conditioned conditioned, or delayed), as expressly contemplated by this Agreement or as required by applicable Law, (i) to use its reasonable best efforts to conduct its and its Subsidiaries operations business in the ordinary course of business consistent with past practice. To the extent consistent therewith, (ii) the Target 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 organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve satisfactory business its and its Subsidiaries' present relationships with customers, suppliers, distributors, licensors, licensees, distributors, wholesalers, lessors and others other Persons having material business dealings relationships with the Target, and (iii) comply in all material respects with all applicable Lawsit. Without limiting the generality of the foregoing, between the date of this Agreement and the Conduct of Business End DateEffective Time, except as otherwise expressly contemplated by this Agreement or Agreement, as set forth on in Section 7.01 5.01 of the of Target Disclosure Letter, the Disclosure Schedules Promissory Note, or as required by applicable Law, the Target will not (and will cause shall not, nor shall it permit any of its Subsidiaries not to) , without the prior written consent of Parent Aytu (which consent will shall not be unreasonably withheld, conditioned conditioned, or delayed):
(a) amend or propose to amend its certificate of incorporation or by-lawsCharter Documents;
(b) (i) split, combine combine, or reclassify any Target Securities or Target Subsidiary Securities, (ii) repurchase, redeem redeem, or otherwise acquire, or offer to repurchase, redeem redeem, or otherwise acquire, any Target Securities other than in the ordinary course of business consistent with past practicesor Target Subsidiary Securities, or (iii) 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 stockstock (other than dividends from its direct or indirect wholly-owned Subsidiaries);
(c) issue, sell, pledge, dispose of of, or encumber any Target Securities or Target Subsidiary Securities, other than (i) the issuance of shares of Target Common Stock upon the exercise of any Target Equity Award outstanding as of the date of this Agreement in accordance with its terms, or (ii) the issuance of shares of Target Common Stock in respect of other equity compensation awards outstanding under Target Stock Plans as of the date of this Agreement in accordance with their terms;
(d) except as required by applicable Law or by any Target Employee Plan or Contract in effect as of the date of this Agreement, Agreement (i) increase the compensation payable or that could become payable by the Target or any of its 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, (ii) enter into any new or amend 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 in connection with the Target's annual or quarterly compensation review cycle or as the result of the termination or resignation of any officer or employee, (iv) reprice any Target Equity Award or amend, accelerate or waive any vesting terms related to any Target Equity Award, or (viii) establish, adopt, enter into, amend, terminate terminate, exercise any discretion under, or take any action to accelerate rights under any Target Employee Plans or any plan, agreement, program, policy, trust, fund fund, or other arrangement that would be a Target Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Target Employee Plan, other than contributions required by Law, the terms of such Target Employee Plans as in effect on the date hereof hereof, or that are made in the ordinary course of business consistent with past practice;
(e) 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;
(f) (i) other than in the ordinary course of business consistent with past practices, 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 Target; provided, that the foregoing shall not prohibit the Target and its Subsidiaries from transferring, selling, leasing, or disposing of obsolete equipment or assets being replaced, or granting of non-exclusive licenses under the Target IP, in each case in the ordinary course of business consistent with past practice, or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, or other reorganization;
(g) repurchase, prepay 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 Target 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, other than in connection with the financing of ordinary course trade payables consistent with past 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 Target 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 Target Material Contract or Lease with respect to material Leased Real Estate hereunder;
(i) institute, settle, or compromise any Legal Action involving the payment of monetary damages by the Target or any of its Subsidiaries of any amount exceeding $100,000 in the aggregate, other than (i) any Legal Action brought against Aytu or Merger Sub arising out of a breach or alleged breach of this Agreement by Aytu or Merger Sub, and (ii) the settlement of claims, liabilities, or obligations reserved against on the Target Balance Sheet; provided, that neither the Target 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 restrictive impact on the Target's business;
(j) 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;
(k) (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 Target Balance Sheet (or most recent consolidated balance sheet included in the Target 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 Target 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) except in connection with actions permitted by Section 7.045.05 hereof, take any action to exempt any Person from, or make any acquisition of securities of the Target by any Person not subject to, any state takeover statute or similar statute or regulation that applies to the Target with respect to a Takeover Proposal Target Alternative Transaction or otherwise, including the restrictions on “"business combinations” " set forth in Section 203 of the DGCL, except for ParentAytu, Merger Sub Sub, or any of their respective Subsidiaries or Affiliates, or the transactions contemplated by this Agreement;
(jn) abandon, encumberallow to lapse, convey title (sell, assign, transfer, grant any security interest in whole otherwise encumber or in part) or license dispose of any Target IP, or grant any right or license to any Target IP other than non-exclusive licenses granted in the ordinary course of business consistent with past practice;
(Ao) terminate or modify in any material respect, or fail to exercise renewal rights with respect to, any material insurance policy;
(p) except to the extent expressly permitted by Section 5.05 or ARTICLE VII, take any action that is intended or that would reasonably be expected to, individually or in the ordinary course of business consistent with past practiceaggregate, (i) enter intoprevent, terminate materially delay, or materially amend or modify any Target Material Contract or Contract that, if in effect on impede the date hereof, would have been a Target Material Contract, (ii) waive any term of, or waive any default under, or release, settle or compromise any claim against the Target or Liability or obligation owing to the Target under, any Target Material Contract, or (B) enter into any Contract which contains a change consummation of control or similar provision that would require a payment to the other party or parties thereto in connection with the Offer, the Merger, the Support Agreement or the other transactions contemplated herein (including in combination with any other event or circumstance);
(l) institute, settle or compromise any Legal Actions pending before any arbitrator, court or other Governmental Entity involving the payment of monetary damages by the Target of any amount exceeding $100,000 in the aggregate, other than (i) any Legal Action brought against Parent, Merger Sub or any of their respective Affiliates or Representatives, and (ii) the settlement of claims, liabilities or obligations reserved against on the most recent balance sheet of the Target included in the Target SEC Documents; provided that, with respect to subsection (ii), the Target shall not settle or agree to settle any Legal Action which settlement involves injunctive or similar relief or has a restrictive impact on the Target’s business;
(m) prepare or file any Tax Return inconsistent with past practices, or take any position, make any election or adopt any method inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods, change or revoke any election related to Taxes, change an annual accounting period, change any method of Tax accounting or file any amended Tax Return, settle or compromise any litigation, audit or other proceedings with respect to Taxes, except any waiver of a statutory period of limitations with respect to the assertion or collection of Taxes or execute a closing agreement with respect to Taxes, if such position, election, adoption, change, revocation, amendment, settlement, compromise, agreement, consent or other action would have the effect of increasing the Tax Liability of the Target for any period after the Closing Date by an amount in excess of $100,000 in the aggregate or decreasing any Tax attribute of the Target existing on the Closing Date by an amount in excess of $100,000 in the aggregatethis Agreement; or
(nq) agree or commit to do any of the foregoing.
Appears in 1 contract
