Interim Conduct of Business (a) Except (i) as contemplated by this Agreement or (ii) as set forth in Section 6.1(a) of the Company Disclosure Letter, at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article X and the Effective Time, unless Parent otherwise provides its prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall and shall cause its Subsidiaries to (A) carry on its business and conduct its operations in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, and (B) use its commercially reasonable efforts, consistent with past practices and policies, to (I) keep available the services of the current officers, key employees and consultants of the Company and each of its Subsidiaries, (II) preserve the current relationships of the Company and each of its Subsidiaries with customers, suppliers and other Persons whom the Company or any of its Subsidiaries has significant business relations, (III) maintain all of its material operating assets in their current condition (normal wear and tear excepted) and (IV) maintain and preserve its business organization and its material rights and franchises.
(b) Except (i) as contemplated or permitted by this Agreement or (ii) as set forth in Section 6.1(b) of the Company Disclosure Letter, at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article X and the Effective Time, unless Parent otherwise provides its prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall not do any of the following and shall not permit any of its Subsidiaries to do any of the following:
(i) amend its certificate of incorporation or bylaws or comparable organizational documents or create any new Subsidiaries;
(ii) 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 Company Securities or any Subsidiary Securities, except for (A) the issuance, delivery and sale of shares of Company Common Stock pursuant to Company Options, Company RSUs or Company Restricted Stock Awards which are outstanding as of the date hereof upon the exercise or vesting thereof, as applicable, or pursuant to the Company ESPP in compliance with this Agreement or (B) grants to newly hired employees or directors of (x) Company RSUs and (y) Company Options, in each case, issued in the ordinary course of business consistent with past practice, in accordance with the limitations specified on Section 6.1(b) of the Company Disclosure Letter and with respect to Company Options, with a per share exercise price that is no less than the then-current market price of a share of Company Common Stock;
(iii) directly or indirectly acquire, repurchase or redeem any Company Securities or Subsidiary Securities, except in connection with (A) Company RSUs in the ordinary course of business, (B) dissolution or reorganization of a wholly owned Subsidiary of the Company in the ordinary course of business consistent with past practice, (C) Tax withholdings and exercise price settlements upon the exercise of Company Options or vesting of Company RSUs or Company Restricted Stock Awards or (D) the forfeiture to or repurchase by the Company of Company Common Stock in connection with the termination of service of a holder of a Company Restricted Stock Award;
(iv) (A) split, combine, subdivide or reclassify any shares of capital stock, or (B) declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock, except for cash dividends made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its wholly-owned Subsidiaries;
(v) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, except for the transactions contemplated by this Agreement;
(vi) (A) redeem, repurchase, prepay, defease, cancel, incur, create, assume or otherwise acquire or modify in any material respect any long-term or short-term debt for borrowed monies or issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries or enter into any agreement having the economic effect of any of the foregoing, except for (1) debt incurred in the ordinary course of business under letters of credit, lines of credit or other credit facilities or arrangements in effect on the date hereof, and (2) loans or advances between the Company and any direct or indirect Subsidiaries, or between any direct or indirect Subsidiaries of the Company, (B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company, (C) make any loans, advances or capital contributions to or investments in any other Person (other than the Company or any direct or indirect wholly-owned Subsidiaries), except for travel advances and business expenses in the ordinary course of business consistent with past practice to employees of the Company or any of its Subsidiaries, or (D) mortgage or pledge any of the Assets, or create or suffer to exist any Lien thereupon (other than Permitted Liens), except pursuant to the terms of any letters of credit, lines of credit or other credit facilities or arrangements in effect on the date hereof;
(vii) except as may be required by applicable Law or the terms of any Employee Plan as in effect on the date hereof or as contemplated by this Agreement, (A) enter into, adopt, amend (including acceleration of vesting), modify or terminate any bonus, profit sharing, incentive, compensation, severance, retention, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance, change in control, pension, retirement, collective bargaining or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any director, officer or employee in any manner, (B) increase the compensation payable or to become payable of any director, officer or employee, pay or agree to pay any special bonus or special remuneration to any director, officer or employee, or pay or agree to pay any benefit not required by any plan or arrangement as in effect as of the date hereof, except in the ordinary course of business consistent with past practice with respect to any employee who is not a director or executive officer, except in any such case (1) in connection with the hiring of new employees who are not directors or executive officers in the ordinary course of business consistent with past practice, and (2) in connection with the promotion of employees who are not directors or executive officers (and who will not be directors or executive officers after such promotion) in the ordinary course of business consistent with past practice, (C) grant or pay any severance or termination pay to (or amend any such existing arrangement with) any current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to any independent contractor or employee who is not a director or executive officer or (D) increase benefits payable under any existing severance or termination pay policies or employment agreements.
(viii) settle any pending or threatened Legal Proceeding, except for the settlement of any Legal Proceeding (A) for solely money damages not in excess of $250,000.00 individually or $500,000.00 in the aggregate and (B) as would not be reasonably likely to have any adverse impact on any other Legal Proceedings;
(ix) except as may be required as a result of a change in applicable Law or in GAAP, make any material change in any of the accounting methods, principles or practices used by it or change an annual accounting period;
(x) (A) make or change any material Tax election, (B) settle or compromise any material federal, state, local or foreign income Tax liability, (C) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes, (D) change any annual Tax accounting period or method of Tax accounting, (E) file any materially amended Tax Return, (F) enter into any closing agreement with respect to any Tax or (G) surrender any right to claim a material Tax refund;
(xi) other than in the ordinary course of business consistent with past practice, (A) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material equity interest therein or (B) dispose of any properties or assets of the Company or its Subsidiaries, which are material to the Company and its Subsidiaries, taken as a whole; or
(xii) make any capital expenditures other than capital expenditures provided for in the capital budget provided to Parent prior to the date of this Agreement and set forth on Section 6.1(b)(xii) of the Company Disclosure Letter;
(xiii) make any changes or modifications to any investment or risk management policy or other similar policies (including with respect to hedging) or any cash management policy;
(xiv) permit any insurance policy naming the Company or any of its Subsidiaries as a beneficiary or a loss payable payee to lapse, be canceled or expire unless a new policy with substantially identical coverage is in effect as of the date of lapse, cancellation or expiration;
(xv) other than in the ordinary course of business, enter into, amend in any material respect, terminate or fail to renew any Material Contract, or any other Contract that would have been a Material Contract had it not been amended, terminated or non-renewed prior to the date of this Agreement; or
(xvi) enter into a Contract to or otherwise authorize, commit, resolve, propose or agree to take any of the actions prohibited by this Section 6.1(b). Notwithstanding the foregoing, nothing in this Agreement is intended to give Parent, directly or indirectly, the right to control or direct the business or operations of the Company or its Subsidiaries at any time prior to the Appointment Time.
Conduct of Business The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance or regulation of any Governmental Entity, except where such violations would not reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect.
Conduct of Business; Regulatory Permits Neither the Company nor any of its Subsidiaries is in violation of any term of or in default under its Certificate of Incorporation, any certificate of designation, preferences or rights of any other outstanding series of preferred stock of the Company or any of its Subsidiaries or Bylaws or their organizational charter, certificate of formation, memorandum of association, articles of association, Certificate of Incorporation or certificate of incorporation or bylaws, respectively. Neither the Company nor any of its Subsidiaries is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to the Company or any of its Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct its business in violation of any of the foregoing, except in all cases for possible violations which could not, individually or in the aggregate, have a Material Adverse Effect. Without limiting the generality of the foregoing, the Company is not in violation of any of the rules, regulations or requirements of the Principal Market and has no knowledge of any facts or circumstances that could reasonably lead to delisting or suspension of the Common Stock by the Principal Market in the foreseeable future. During the two years prior to the date hereof, (i) the Common Stock has been listed or designated for quotation on the Principal Market, (ii) trading in the Common Stock has not been suspended by the SEC or the Principal Market and (iii) the Company has received no communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting of the Common Stock from the Principal Market. The Company and each of its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a Material Adverse Effect, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit. There is no agreement, commitment, judgment, injunction, order or decree binding upon the Company or any of its Subsidiaries or to which the Company or any of its Subsidiaries is a party which has or would reasonably be expected to have the effect of prohibiting or materially impairing any business practice of the Company or any of its Subsidiaries, any acquisition of property by the Company or any of its Subsidiaries or the conduct of business by the Company or any of its Subsidiaries as currently conducted other than such effects, individually or in the aggregate, which have not had and would not reasonably be expected to have a Material Adverse Effect on the Company or any of its Subsidiaries.
Conduct of Business of Parent Except as set forth in Section 6.2 of the Parent Disclosure Schedule, during the period from the date of this Agreement to the Effective Time (unless the Company shall otherwise agree in writing and except as otherwise contemplated by this Agreement), Parent will conduct its operations according to its ordinary and usual course of business consistent with past practice and shall use all reasonable efforts to preserve intact its current business organizations, keep available the service of its current officers and employees, maintain its material Permits and Contracts and preserve its relationships with customers, suppliers and others having business dealings with it. Without limiting the generality of the foregoing, and except as otherwise contemplated by this Agreement or as set forth in Section 6.2 of the Parent Disclosure Schedule, Parent will not, without the prior written consent of the Company (which consent shall not be unreasonably withheld):
(i) issue, sell, grant, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, sale, disposition or pledge or other encumbrance of (A) any additional shares of capital stock of any class (including the shares of Parent Common Stock), or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of capital stock, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of capital stock or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of capital stock or (B) any other securities in respect of, in lieu of, or in substitution for, shares of Parent Common Stock outstanding on the date hereof;
(ii) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any of its outstanding shares of Parent Common Stock;
(iii) split, combine, subdivide or reclassify any shares of Parent Common Stock or declare, set aside for payment or pay any dividend, or make any other actual, constructive or deemed distribution in respect of any capital stock of Parent or otherwise make any payments to stockholders in their capacity as such, other than the declaration and payment of regular quarterly cash dividends on the Parent Common Stock in an amount no greater than $.72 per share per annum and in accordance with past dividend policy and other than the declaration and payment of dividends on Parent Preferred Stock pursuant to Parent's Certificate of Incorporation as in effect on the date hereof and except for dividends by a direct or indirect wholly owned subsidiary of Parent;
(iv) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of the Parent Subsidiaries (other than the Merger), except for Parent Subsidiaries which are not material to the assets, liabilities, financial condition or results of operations of Parent and the Parent Subsidiaries taken as a whole;
(v) adopt any amendments to its Certificate of Incorporation or By-Laws or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any direct or indirect subsidiary of Parent, except for Parent Subsidiaries which are not material to the assets, liabilities, financial condition or results of operations of Parent and the Parent Subsidiaries taken as a whole;
(vi) make, or permit any Parent Subsidiary to make, any material acquisition, by means of merger, consolidation or otherwise, or material disposition, of assets or securities;
(vii) other than in the ordinary course of business consistent with past practice, incur, or permit any Parent Subsidiary to incur, any material indebtedness for borrowed money or guarantee any such indebtedness or make any material loans, advances or capital contributions to, or material investments in, any other person other than Parent or any Parent Subsidiary;
(viii) change any method of accounting or accounting practice by Parent or any Parent Subsidiary, except for any such required change in GAAP or applicable statutory accounting principles;
(ix) permit any Parent Insurance Subsidiary to materially change its investment guidelines or policies and approved programs or transactions or conduct transactions in investments except in material compliance with the investment guidelines and policies of such Parent Insurance Subsidiary and all applicable insurance Laws;
(x) enter, or permit any Parent Insurance Subsidiary to enter, into any material reinsurance, coinsurance or similar Contract, whether as reinsurer or reinsured, except in the ordinary course of business consistent with past practice;
(xi) (x) take, or agree or commit to take, or permit any Parent Subsidiary to take, or agree or commit to take, any action that would make any representation and warranty of Parent hereunder inaccurate in any material respect at the Effective Time (except for representations and warranties which speak as of a particular date, which need be accurate only as of such date), (y) omit, or agree or commit to omit, or permit any Parent Subsidiary to omit, or agree or commit to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at the Effective Time (except for representations and warranties which speak as of a particular date, which need be accurate only as of such date), provided however that Parent shall be permitted to take or omit to take such action which can be cured, and in fact is cured, at or prior to the Effective Time or (z) take, or agree or commit to take, or permit any Parent Subsidiary to take, or agree or commit to take, any action that would result in, or is reasonably likely to result in, any of the conditions of the Merger set forth in Article VII not being satisfied; or
(xii) authorize, recommend, propose or announce an intention to do any of the foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
BUSINESS REVIEWS Supplier must perform a minimum of one business review with Sourcewell per contract year. The business review will cover sales to Participating Entities, pricing and contract terms, administrative fees, sales data reports, performance issues, supply issues, customer issues, and any other necessary information.
Conduct of Business by Parent (a) From and after the date hereof until the earlier of the Effective Time and the Termination Date, and except (i) as may be required by applicable Law or the regulations or requirements of any stock exchange or regulatory organization applicable to Parent or any of its Subsidiaries, (ii) as may be agreed in writing by the Company (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) as may be contemplated or required by this Agreement or (iv) as set forth in Section 5.2(a) of the Parent Disclosure Schedule, Parent covenants and agrees that the business of Parent and its Subsidiaries shall be conducted in the ordinary course of business, and Parent shall, and shall cause its Subsidiaries to, use their commercially reasonable efforts to preserve intact their present lines of business, maintain their rights, franchises and Parent Permits and preserve their relationships with customers and suppliers; provided, however, that no action by Parent or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.2(b) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision.
(b) Parent agrees with the Company, on behalf of itself and its Subsidiaries, that from the date hereof and prior to the earlier of the Effective Time and the Termination Date, except (i) as may be required by applicable Law or the regulations or requirements of any stock exchange or regulatory organization applicable to Parent or any of its Subsidiaries, (ii) as may be consented to by the Company (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) as may be contemplated or required by this Agreement or (iv) as set forth in Section 5.2(b) of the Parent Disclosure Schedule, Parent:
(A) shall not adopt any material amendments to the Parent Organizational Documents or the organizational documents and governance arrangement of Parent GP;
(B) shall not, and shall not permit any of their Subsidiaries to, split, combine or reclassify any of their equity interests or other ownership interests or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests, except for any such transaction by a wholly owned Subsidiary of Parent which remains a wholly owned Subsidiary after consummation of such transaction;
(C) except in the ordinary course of business, shall not, and shall not permit any of its Subsidiaries that is not wholly owned by Parent or wholly owned Subsidiaries of any such Subsidiaries to, authorize or pay any dividends on or make any distribution with respect to its outstanding equity securities (whether in cash, assets, partnership units, stock or other securities of Parent or its Subsidiaries), except (1) dividends or distributions by any Subsidiaries only to Parent or any Subsidiary of Parent in the ordinary course of business, (2) dividends or distributions required under the applicable organizational documents of such entity in effect on the date of this Agreement, and (3) regular quarterly cash distributions with respect to the Common Units and the Energy Transfer Operating Preferred Units as set forth in Section 5.2(b)(C) of the Parent Disclosure Schedule;
(D) shall not, and shall not permit any of its material Subsidiaries to, adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization, other than the Merger and other than any merger, consolidation, restructuring or reorganization solely among Parent and its Subsidiaries or among Parent’s Subsidiaries or in connection with an acquisition not prohibited by clause (E) of this Section 5.2(b);
(E) shall not, and shall not permit any of its Subsidiaries to, make any acquisition of any other person or business or make loans, advances or capital contributions to, or investments in, any other person that would reasonably be expected to prevent, materially impede or materially delay the consummation of the Merger;
(F) shall not issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any equity interest or other ownership interest in Parent or any securities convertible into or exchangeable for any such equity interest or other ownership interest, or any rights, warrants or options to acquire any such equity interest, ownership interest or convertible or exchangeable securities or take any action to cause to be exercisable any otherwise unexercisable option under any existing Parent Benefit Plans (except as otherwise provided by the terms of this Agreement or the express terms of any unexercisable or unexercised options or warrants outstanding on the date hereof), other than (1) as set forth in Section 5.2(b)(F) of the Parent Disclosure Schedule, (2) issuances of Common Units in respect of any exercise of Parent equity awards and settlement of any Parent equity awards outstanding on the date hereof or as may be granted after the date hereof as permitted under this Section 5.2(b), (3) the sale of Common Units pursuant to the exercise of options to purchase Common Units if necessary to effectuate an option direction upon exercise or for withholding of Taxes, (4) the grant of equity compensation awards under the Parent Equity Plans, or (5) for transactions among Parent and its Subsidiaries or among Parent’s Subsidiaries;
(G) shall not directly or indirectly, purchase, redeem or otherwise acquire any equity securities of Parent or any rights, warrants or options to acquire any such equity securities, except (1) as set forth on Section 5.2(b)(G) of the Parent Disclosure Schedule or (2) for transactions among Parent and its Subsidiaries or among Parent’s Subsidiaries;
(H) shall not take any action or fail to take any action that would reasonably be expected to cause Parent to be treated, for U.S. federal income tax purposes, as a corporation; and
(I) shall not, and shall not permit any of its Subsidiaries to, agree, in writing or otherwise, to take any of the foregoing actions that are prohibited pursuant to clauses (A) through (H) of this Section 5.2(b).
Conduct of the Business (a) Except as required by applicable Law, Judgment or a Governmental Authority, as expressly contemplated, required or permitted by this Agreement or the Merger Agreement or otherwise undertaken to implement this Agreement, any Ancillary Agreement or the Merger Agreement, or as set forth in Schedule 6.01, during the period from the date of this Agreement until the Closing (or such earlier date on which this Agreement is terminated pursuant to Section 9.01), unless Purchaser otherwise consents in writing (such consent not to be unreasonably withheld, delayed or conditioned), (i) Seller shall, and shall cause the other Asset Seller Entities to, use its and their commercially reasonable efforts to carry on the Business in all material respects in the ordinary course consistent with past practice, and (ii) to the extent consistent with the foregoing, Seller shall, and shall cause the other Asset Seller Entities to, use its and their commercially reasonable efforts to (A) preserve the business organizations of the Business substantially intact and (B) preserve existing relations with key customers and distributors of the Business and with other Persons with whom Seller and the other Asset Seller Entities have significant business relationships with respect to the Business, in each case, consistent with past practice.
(b) Without limiting the generality of the foregoing, except as required by applicable Law, Judgment or a Governmental Authority, as expressly contemplated, required or permitted by this Agreement or the Merger Agreement or as set forth in Schedule 6.01, during the period from the date of this Agreement until the Closing (or such earlier date on which this Agreement is terminated pursuant to Section 9.01), unless Purchaser otherwise consents in writing (such consent not to be unreasonably withheld, delayed or conditioned), Seller shall not, and shall not permit any other Asset Seller Entity to, in each case solely to the extent relating to the Business:
(i) incur any Indebtedness that creates or results in a Lien (other than a Permitted Lien) upon any of the Purchased Assets, except for Indebtedness incurred in the ordinary course of business consistent with past practice that (A) constitutes an Excluded Liability, (B) does not result in a Lien (other than a Permitted Lien) on the Purchased Assets that will survive the Closing, or (C) constitutes a letter of credit, bank guarantee, security or performance bond or similar credit support instrument, overdraft facility or cash management program;
(ii) sell, lease, license or otherwise transfer, directly or indirectly, to any Person, in a single transaction or series of related transactions, any of the Purchased Assets, except (A) ordinary course dispositions of inventory to customers and distributors consistent with past practice, (B) dispositions consistent with past practice of (1) obsolete, surplus or worn out assets or (2) assets that are no longer used or useful in the Business, or (C) transfers among the Asset Seller Entities;
(iii) make any acquisition of, or investment in, any properties, assets, Securities or business for the Business, except for the acquisitions of supplies, inventory, equipment, merchandise or products in the ordinary course of business consistent with past practice;
(iv) grant any Lien (other than a Permitted Lien) on any of the Purchased Assets other than (A) to secure Indebtedness and other obligations permitted under Section 6.01(b)(i), or (B) any such Lien that will not survive the Closing and will not (1) require any Consent to be obtained in connection with the Transactions or (2) delay in any material respect the consummation thereof;
(A) modify, amend or terminate, or waive, in each case in any material respect, any rights or claims under, any Material Contract or any Restricted Contract other than in the ordinary course of business consistent with past practice or (B) enter into any new Contract that (1) would, in the twelve (12)-month period immediately following the entry into such Contract, reasonably be expected to meet the threshold monetary requirement set forth for such type of a Contract in Section 4.11(a)(iii) for the fiscal year ended December 31, 2016, (2) is a Restricted Contract, or (3) contains a change in control or similar provision in favor of the other party or parties thereto that would require a material payment to or would give rise to any material rights of such other party or parties in connection with the consummation of the Transactions (including in combination with any other event or circumstance), other than pursuant to a tender offer process for Contracts with a Governmental Authority in the ordinary course consistent with past practice; or
(vi) authorize any of, or commit or agree, in writing or otherwise, to take any of, the foregoing actions.
(c) Nothing contained in this Agreement is intended to give Purchaser, directly or indirectly, the right to control or direct the operations of the Business prior to the Closing, and nothing contained in this Agreement is intended to give Purchaser at any time, directly or indirectly, the right to control or direct any Excluded Businesses. Prior to the Closing, each of Purchaser and Seller shall exercise, consistent with the terms and conditions of this Agreement and with applicable Competition Laws, complete control and supervision over its and its Subsidiaries’ respective operations.
Conduct of Business Prior to Closing Between the date of this Agreement and the Closing Date or the termination date if earlier terminated, unless the Buyer shall otherwise agree in writing, the Seller shall use commercially reasonable efforts to cause the Business to be conducted only in the Ordinary Course of Business, and shall preserve substantially intact the organization of the Business, keep available the services of the current Business Employees and preserve the current relationships of the Business with customers, suppliers and other persons with which the Business has significant business relations. Without limiting the generality of the foregoing, between the date of this Agreement and the Closing Date or the termination date if earlier terminated, the Seller shall not do or propose to do, directly or indirectly, and shall cause its Affiliates not to do, any of the following in connection with the Business or the Purchased Assets without the prior written consent of the Buyer:
(a) issue, sell, pledge, dispose of or otherwise subject to any Encumbrance any Purchased Assets, other than sales or transfers of Inventory for fair market value in the Ordinary Course of Business;
(b) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, or make any loans or advances, in each case affecting the Business or the Purchased Assets, except for any indebtedness that is an Excluded Liability;
(c) amend, waive, modify in any material respect or in a manner adverse to the Business or the Purchased Assets or consent to the termination of any Assumed Contract, or amend, waive, modify in any material respect or in a manner adverse to the Business or the Purchased Assets or consent to the termination of any of the Seller’s rights thereunder, or enter into any Contract in connection with the Business or the Purchased Assets other than in the Ordinary Course of Business that, together with any other Assumed Contracts entered into in accordance with this clause, would not be material to the Business or the Purchased Assets, taken as a whole;
(d) authorize, or make any commitment with respect to, any single capital expenditure for the Business that is in excess of $50,000 or capital expenditures which are, in the aggregate, in excess of $150,000 for the Business taken as a whole;
(e) acquire any corporation, partnership, limited liability company, other business organization or division thereof or any material amount of assets, or enter into any joint venture, strategic alliance, exclusive dealing, noncompetition or similar contract or arrangement in each case with respect to or affecting the Business;
(f) enter into any lease of personal property or any renewals thereof in connection with the Business involving a term of more than one year or rental obligation exceeding $10,000 per year in any single case;
(g) except as may be required by applicable Law or any Employee Plan or except in the Ordinary Course of Business, (A) enter into or increase the benefits provided under any employment agreement with any Business Employee, (B) make or grant, or permit any of their respective Affiliates to make or grant, any bonus or increase the rate or terms of compensation or benefits of any Business Employee, or (C) enter into, amend or terminate any Employee Plan;
(h) enter into any Contract with any Related Party of the Seller in connection with or affecting the Business or the Purchased Assets;
(i) make any change in any method of accounting or accounting practice or policy affecting the financial statements of the Business, except as required by GAAP;
(j) make, revoke or modify any Tax election with respect to the Business or the Purchased Assets, settle or compromise any Tax liability with respect to the Business or the Purchased Assets, or amend any Return relating to the Business or the Purchased Assets other than on a basis consistent with past practice;
(k) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise) relating to the Business or the Purchased Assets, other than the payment, discharge or satisfaction, in the Ordinary Course of Business, of liabilities reflected or reserved against on the Balance Sheet or subsequently incurred in the Ordinary Course of Business;
(l) cancel, compromise, waive or release any right or claim relating to the Business or the Purchased Assets, other than in the Ordinary Course of Business that, together with any other rights or claims cancelled, compromised, waived or released would not be material to the Business or the Purchased Assets, taken as a whole;
(m) permit the lapse of any existing policy of insurance relating to the Business or the Purchased Assets;
(n) permit the lapse of any right relating to Transferred Intellectual Property or any material right relating to any other intangible asset used or held for use in connection with the Business;
(o) accelerate the collection of or discount any Receivables, delay the payment of liabilities that would become Assumed Liabilities or defer expenses, reduce Inventories or otherwise increase cash on hand in connection with the Business, except in the Ordinary Course of Business;
(p) use any Purchased Assets to pay any Transaction Expenses;
(q) commence or settle any Action for an amount in excess of $25,000 individually or $100,000 in the aggregate relating to the Business, the Purchased Assets or the Assumed Liabilities; or
(r) announce an intention, enter into any formal or informal agreement, or otherwise make a commitment to do any of the foregoing.
Conduct of Business of the Company Except for matters permitted or contemplated by this Agreement, set forth on Section 5.01 of the Seller Disclosure Schedule or as required by applicable Law, unless Buyer otherwise agrees in writing, from the date of this Agreement to the Closing, Xx. Xxxxxx and Seller shall cause each Company to conduct its business in the ordinary course of business consistent with past practices. In addition, and without limiting the generality of the foregoing, except for matters permitted or contemplated by this Agreement, set forth on Section 5.01 of the Seller Disclosure Schedule or required by applicable Law, from the date of this Agreement to the Closing, the Xx. Xxxxxx and the Seller shall not permit either Company to do take any of the following without the prior written consent of Buyer, such consent not to be unreasonably withheld or delayed or conditioned:
(a) (i) declare, set aside or make any distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any membership interests in such Company; (ii) split, combine or reclassify any of the membership interests in such Company; (iii) issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, membership interests in such Company; or (iv) purchase, redeem or otherwise acquire any membership interests in such Company or any other securities thereof or any rights, options, warrants or calls to acquire any such securities;
(b) issue, deliver, sell, grant, pledge, transfer or otherwise encumber or dispose of or subject to any Encumbrance (i) any of such Company’s membership interests, (ii) any of its other voting securities, (iii) any securities convertible into or exchangeable for, or any options, warrants or rights to acquire, any such membership interests or voting securities or convertible or exchangeable securities or (iv) any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units;
(c) amend its organizational documents;
(d) acquire any stock, other equity interest or assets (including real property) of any other Person (in connection with a purchase of such Person’s business whether in whole or in part), whether by purchase of stock, purchase of assets, merger, consolidation, or otherwise;
(e) pledge, transfer, sell, lease, license, otherwise dispose of or subject to any Lien, any of the Property;
(f) enter into any Contract or incur any Liability whatsoever or (ii) make any loans, advances or capital contributions to, or investments in, any other Person;
(g) adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of such Company;
(h) institute, settle, or agree to settle any Proceeding pending or threatened before any arbitrator, court or other Governmental Entity; or
(i) authorize, commit or agree to take any of the foregoing actions.
Conduct of Business by the Company The Company agrees that between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Section 8.1, except (1) as set forth in Section 5.1 of the Company Disclosure Letter, (2) as specifically permitted or required by this Agreement, (3) as required by Law or (4) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (a) the Company shall and shall cause each Company Subsidiary to conduct its business in all material respects in the ordinary course of business, including by using reasonable best efforts to preserve intact its and their present business organizations, insurance coverage, relationships with Governmental Entities and with customers, suppliers and other Persons with whom it and they have material business relations, and retain the services of its present officers and directors and key employees and (b) without limiting the generality of the foregoing, the Company shall not, and shall not permit any Company Subsidiary to:
(i) authorize or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock (whether in cash, assets, shares or other securities of the Company or any Company Subsidiary), except dividends and distributions paid or made by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary, distributions under the Company ESPP and distributions resulting from the vesting or exercise of Company Stock Options or the vesting and settlement of Company RSU Award;
(ii) split, combine, reduce or reclassify any of its capital stock, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock;
(iii) in each case except as required by the provisions of the Company Benefit Plans as in effect on the date hereof or the provisions of this Agreement: (A) establish, adopt, amend or terminate any Company Benefit Plan (other than offer letters that contemplate “at will” employment with severance, change in control or retention benefits consistent with current arrangements with similarly situated employees) or amend the terms of any outstanding equity-based awards, (B) grant or provide any severance or termination payments or benefits to any director, officer, employee or other service provider of the Company or any of the Company Subsidiaries, (C) increase the compensation, bonus or pension, welfare, severance or other benefits of or pay any bonus to any director, officer, employee or other service provider of the Company or any of the Company Subsidiaries, (D) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan (including any equity-based awards), (E) forgive any loans to directors, officers or employees of the Company or any of the Company Subsidiaries, or (F) hire or terminate the employment or services of (other than for cause) any officer, employee, independent contractor, or consultant who has target annual compensation (i.e., base salary and target annual bonus opportunity) greater than $200,000; provided, that nothing contained herein shall prohibit the Company from (x) increasing or otherwise modifying or supplementing salaries, wages, benefits or other compensation in the ordinary course of business; (y) granting any rights to equity or equity-related compensation to those individuals or with respect to those positions, and up to the amounts, set forth in Section 5.1(a)(iii) of the Company Disclosure Letter or (z) hiring an employee or entering into a contract for services to be provided by a consultant to replace an employee or consultant of the Company or any of the Company Subsidiaries whose employment or consulting relationship is terminated for any reason on or after the date hereof, so long as the terms of the salary, target annual bonus opportunity and other benefits offered to such replacement employee or consultant are substantially similar, or not materially different than, those of the employee or consultant of the Company or the Company Subsidiary whose employment or consulting relationship has been terminated;
(iv) make any change in financial accounting policies, principles, practices or procedures or any of its methods of reporting income, deductions or other material items for financial accounting purposes, except as required by GAAP, applicable Law or SEC policy;
(v) acquire, including by merger, consolidation or acquisition of stock or assets or any other business combination or by any other manner, any corporation, partnership, other business organization or any business, division or equity interest thereof;
(vi) amend or propose to amend the Company Governing Documents or any of the equivalent organizational documents of any Company Subsidiary;
(vii) issue, deliver, grant, sell, pledge, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares in its capital stock, voting securities or other equity interest in the Company or any Company Subsidiary or any securities convertible into or exchangeable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares in its capital stock, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable any otherwise unexercisable Company Equity Award under any existing Company Equity Plan (except as otherwise required by the express terms of any Company Equity Award outstanding on the date hereof), other than issuances of shares of Company Common Stock in respect of the Company ESPP or any exercise of Company Stock Options or the vesting or settlement of Company Equity Awards outstanding on the date hereof and in accordance with their respective present terms;
(viii) directly or indirectly, purchase, redeem or otherwise acquire any shares in its capital or any rights, warrants or options to acquire any such shares in its capital, except for (A) acquisitions of shares of Company Common Stock tendered by holders of Company Equity Awards in order to satisfy obligations to pay the exercise price and/or Tax withholding obligations with respect thereto and (B) the acquisition by the Company of Company Equity Awards in connection with the forfeiture of such awards;
(ix) redeem, repurchase, prepay, defease, incur, assume, endorse, guarantee or otherwise become liable for or modify in any material respect the terms of any Indebtedness for borrowed money or issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt securities (directly, contingently or otherwise), except for transactions at the stated maturity of such Indebtedness and required amortization or mandatory prepayments;
(x) make any loans to any other Person, except for loans among the Company and its wholly owned Company Subsidiaries or among the Company’s wholly owned Company Subsidiaries;
(xi) (A) sell, lease, license, transfer, exchange, swap or otherwise dispose of, or subject to any Lien (other than Company Permitted Liens), any of its material properties or assets (including shares of capital stock or other equity interests of the Company or any of the Company Subsidiaries), except for sales of inventory, or dispositions of obsolete or worthless equipment, in each case, in the ordinary course of business or (B) waive or assign any claims or rights of material value;
(xii) (A) compromise or settle any claim, litigation, investigation or proceeding, in each case made or pending by or against the Company or any of the Company Subsidiaries (for the avoidance of doubt, including any compromise or settlement with respect to matters in which any of them is a plaintiff), or any of their employees, officers or directors in their capacities as such, other than the compromise or settlement of claims, litigation, investigations or proceedings that: (1) are for an amount not to exceed $500,000, individually or in the aggregate, (2) do not involve an admission of guilt or impose any injunctive relief or a material restriction on the Company and the Company Subsidiaries and (3) do not provide for the license of any material Intellectual Property Right or (B) commence any material claim, litigation, investigation or proceeding, other than in the ordinary course of business;
(xiii) make, revoke or change any material Tax election, change any Tax accounting period or method for purposes of a material Tax or material method of Tax accounting, file any material amended Tax Return, settle or compromise any audit or proceeding relating to a material amount of Taxes, except in the ordinary course of business agree to an extension or waiver of the statute of limitations with respect to a material amount of Taxes, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local, or non-U.S. Law) with respect to any material Tax, or surrender any right to claim a material Tax refund;
(xiv) except for $100,000 in capital expenditures incurred in the ordinary course of business, make any new capital expenditure or expenditures, or commit to do so;
(xv) 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 5.1(b), (A) enter into any Contract that would, if entered into prior to the date hereof, be a Material Contract, or (B) materially modify, materially amend or terminate any Material Contract or waive, release or assign any material rights or claims thereunder; or
(xvi) agree, in writing or otherwise, to take any of the foregoing actions.
